Calculate Trade payables Turnover Ratio from the following information: Opening Creditors Rs. 1,25,000; Opening Bills Payable Rs. 10,000; Closing Creditors Rs. 90,000; Closing bills Payable Rs. 5,000; Purchases Rs. 9,50,000; Cash Purchases Rs. 1,00,000; Purchases Return Rs. 45,000.

SOLUTION

Net Credit Purchases = Purchases – Cash Purchases – Purchase Return
= 9,50,000 – 1,00,000 – 45,000
= Rs. 8,05,000

Average Trade Payables	= Opening Creditors & Bills payables + Closing Creditors & Bills payables / 2
	= 1,25,000 + 10,000 + 90,000 +5,000 / 2
	= Rs. 1,15,000

Trade Payables turnover ratio

= 8,05,000 / 115000
= 7 Times