9.31 Whybird, a sole trader, has been advised by his accountant to keep an eye on the
Question:
9.31 Whybird, a sole trader, has been advised by his accountant to keep an eye on the number of days it takes for his trade receivables to be settled. The accountant has explained how to calculate the trade receivables turnover period but Whybird doesn’t really understand.
He asks you to do the calculation for him. Extracts from the last 2 years’ financial statements for Whybird’s business show the following figures:
2012 2011
£ £
Revenue 180 630 178 440 Less: returns (1 300) (1 060)
179 330 177 380 2012 2011
£000 £000 Trade receivables 20 982 21 117 Less: allowance for bad trade receivables (306) (297)
20 676 20 820 Calculate the trade receivables turnover period for Whybird for both years to one decimal place. Has the trade receivables turnover period improved or worsened in 2012?
Step by Step Answer:
