The following ratios were computed for TC Ltd based on the company’s 2013 and 2012 accounts:

REQUIRED:
Explain which of the following statements are true and which are false:

a) On average, TC Ltd's trade receivables are taking longer to pay in 2013 than in 2012.

b) On average, TC Ltd's inventories are being held for six days longer in 2013.

c) Give reasons why trade receivable days might decrease from one year to the next and why inventory days increase from one year to the next.

Transcribed Image Text:

2013 2012 Trade receivable days 39 days 43 days Inventory days 44 days 38 days