Which of the following formulae is INCORRECT?
Average collection period = 365/Creditors turnover ratio
The correct answer is Operating expenses = Cost of goods sold + selling expenses + Administrative expenses. This formula is incorrect as operating expenses do not simply add up cost of goods sold and selling expenses; they involve other items as well.
Important Questions from Ratio analysis
Which ratios are calculated for measuring the efficiency of operation of business based on effective utilisation of resources?
Which of the following ratio is also termed as leverage ratio?
Interest Coverage Ratio and proprietary ratio comes under:
Which ratios are calculated for measuring the efficiency of operation of business based on effective utilisation of resources?
Which of the following ratio is also termed as leverage ratio?
