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Debtors Turnover Ratio

Mac71 · 2014-01-17 10:41:21

HI, Very simple question I know, but just managed to confuse myself! I was hoping someone could point me in the right direction. To calculate debtors turnover ratio/days is the sales figure net of vat and the trade debtors inclusive of vat? Also do you remove the bad debt provision from the debtors before calculating?…

17-01-2014 10:41am

#1

Mac71

Registered Users, Registered Users 2 Posts: 12 ✭

Join Date: April 2009

Posts: 5

HI,
Very simple question I know, but just managed to confuse myself!

I was hoping someone could point me in the right direction. To calculate debtors turnover ratio/days is the sales figure net of vat and the trade debtors inclusive of vat? Also do you remove the bad debt provision from the debtors before calculating?
Thanks in advance,
Mac.

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Comments

#2 18-01-2014 6:46pm

TiGeR KiNgS

Registered Users, Registered Users 2 Posts: 1,435 ✭✭✭

Join Date: April 2008

Posts: 1329

1. is the sales figure net of vat and the trade debtors inclusive of vat ?

This is incorrect as you would be comparing apples with oranges.
(net vat for both)

2. do you remove the bad debt provision from the debtors before calculating ?

Yes, as to not do so would defeat the purpose of calculating the provision.

0