1. Debtors Turnover Ratio:
Definition:
Debtors turnover ratio indicates the velocity of debt collection of a firm. In simple words it indicates the number of times average debtors (receivable) are turned over during a year.
Formula of Debtors Turnover Ratio:
Debtors Turnover Ratio = Credit Sales
Average Receivable

2. CALCULATION DEBTORS TURNOVER RATIO = 2,61,76,594 =2,31,72,131
= 2,61,76,594 =2,31,72,131
4,63,
=56.51 times =81 times

3. Significance of the Ratio:
This ratio indicates the number of times the debtors are turned over a year. The higher the value of debtors turnover the more efficient is the management of debtors or more liquid the debtors are and vice-versa. It is the reliable measure of the time of cash flow from credit sales.

4. Debt Collection Period
DCP = Accounts receivable * 365
Credit sales
For For 2007
= 4,63, X 100 = 2,86, X 100 2,61,76, ,31,72,131
DCP = 7 days DCP = 5 days