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DEAR JOHN A WARM GREETING FOR U.MY QUESTION ON RUBY PLC AT BACK OF THE NOTES
RECEIVABLS TAKES 40 DAYS CURRENTLY
SO CURRENT DECIEVABLE I CALCULATED 40/365 TIMES 40000000 THE ANSWER SHOWS DIFFERENTLY HELP PLZ.Please do not type in capital letters 🙂
The question does not say that receivables currently take 40 days to pay. It says that the payment terms are 40 days, which is not the same thing. Just because you ask customers to pay in 40 days does not mean that they will! 🙂
The current receivables are 550,000 from the Statement of financial position.
(This was an old exam question.)
Please do not type in capital letters 🙂
The question does not say that receivables currently take 40 days to pay. It says that the payment terms are 40 days, which is not the same thing. Just because you ask customers to pay in 40 days does not mean that they will! 🙂
The current receivables are 550,000 from the Statement of financial position.
(This was an old exam question.)
Dear John,
if you could please help me with the calculation of trade payables days in case of a shopping mall. I’m not sure what to use as a denominator (as the mall does not have COS; their business is lease of premises to tenants, and only purchases refer mostly to utilities and services (like facility management, insurance, marketing etc.).
If I’m not wrong, I should use a Cr turnover of the payables accounts?Thank you very much in advance!
Kind regards,
DanijelaThere are no fixed rules in practice – it is a question of deciding what is most suitable for the decisions being made.
I would suggest taking (payables / total expenses) multiplied by 365 days.
thank you very much! just to be sure, in case of taking total expenses, I should deduct interest expenses and other extraordinary expenses, i.e. I should only take opex…
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