Debtors turnover ratio

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2011 HI
MEMBER

I WANT TO KNOW ABOUT DEBTORS TURNOVER RATIO?

FOR GOOD POSITION OF COMPANY WHETHER IT SHOULD BE HIGH OR LOW?

WHAT ARE CONSEQUENCES OF HIGH OR LOW RATIO?

PLEASE EXPLAIN

THANKING YOU IN ADVANCE

ACMA Obulirajan R

ACMA Obulirajan R (Expert)
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16 October 2011 Debtors turnover ratio should always be low.
However,DTR may vary company to company. Some company may operate on advance payment basis and some may operate on credit basis.

If your DTR is very high, then you should moitor the same very closely. ie. till the money get realised.