Practice Creditors Turnover Ratio (1.4.3.3) - Ratio Analysis - ICSE 12 Accounts

Practice: Creditors Turnover Ratio

Lesson 1.4.3.3Ratio Analysis

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8 questions

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3 cards from this section. Quick, good the night before a test.
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6 questions · about 4 min · pass mark 70%. Hints available.
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Quiz
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6 sample questions

Question 1.
What does the Creditors Turnover Ratio indicate?
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Think about what paying suppliers quickly might mean for a business.
Question 2.
How is the Creditors Turnover Ratio calculated?
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Recall the formula we discussed in class.
3Question 3.
What does a higher Creditors Turnover Ratio signify?
- Less financial management
- Higher efficiency in payments
- Lower liquidity
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Recall the implications of financial ratios discussed in class.
4Question 4.
True or False: A lower Creditors Turnover Ratio indicates a company is managing its cash flow well.
- True
- False
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Think about what it means for a company to delay payments.
Question 5.
Company Z has Current Assets of ₹800,000, Current Liabilities of ₹300,000, with Net Credit Purchases of ₹600,000 and Average Trade Creditors of ₹150,000. Analyze their Creditors Turnover Ratio in the context of liquidity.
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Understand how ratios inform you about cash flow and financial health.
Question 6.
If Company Y’s Creditors Turnover Ratio has increased from 2 to 5 over two years, what could be some underlying reasons for this change? Discuss with examples.
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Think about both internal and external factors influencing financial practices.

4 more questions in this section. Enroll free to practise them all.