CA Kanchan Jha (Finance & Accounts Executive) (493 Points)
25 September 2010What is meant by Stock Velocity in Ratio Analysis? How can we apply Average Collection Period for finding Debtor balance?
* Krishna *
(CA Student)
(6149 Points)
Replied 25 September 2010
khushboo
(article)
(86 Points)
Replied 25 September 2010
velocity general meaning stock holding period but in context of ratio it is used as stock turnover ratio yeh answer given by krishna is correct
CA. Abhishek K. Pandey
(Manager (Advance))
(901 Points)
Replied 25 September 2010
sourabh
(student)
(34 Points)
Replied 26 September 2010
| Originally posted by : Abhishek K. Pandey | ||
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Stock velocity means movement of stock, but in your context , as above said it is stock turnover ratio. To find Debtors balance from average collection period. Use this formula. Average Debtors = Net Credit Sales During the Year*Average Collection Period/365 days or 12 months, as the case may be. Regards, Abhishek K. Pandey |
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apt answer..
CA Kanchan Jha
(Finance & Accounts Executive)
(493 Points)
Replied 26 September 2010
Thanks to all of u
Pardeep
(Audit Executive)
(51 Points)
Replied 01 October 2010
i agree with krishna. i would have given same answer
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