Absolutely awesome.i have wasted 2-3 hrs just trying to understand the logic behing these ratios and formula and afted watching this i have finally got clear understanding on how these formulas are made and what they interpret.now i dont have to memorise the formula. Thanks a lot
Download the Colgate Accounts Receivable Turnover Ratio excel template used in this video from this link - www.wallstreetmojo.com/ratio-analysis-template/
If its collecting 1600 worth of receivables 5 times, it means, it has already collected the 8000 given as credit. Then why receivables seen as 1600, shouldnt it be zero. Pls clear my doubt
Hi! Credit Sales means product or service sold on credit basis wherein you are yet to receive the amount. Account receivables means amount not received but yet to be received. So in your example when you show 1200 as receivables, does it mean the amount has already been received?
very useful. I have a question regarding the construction industry: shall we include the retention amount which will be paid at the end of the contract in the receivable and deduct the advance paid by the client to get the net account receivable ? what about the unbilled revenue which is included in the revenue at the end of the Year based on the percentage of completion method?
Sir please explain me one thing related to the numerator of quick ratio: my doubt is you had previously said about current ratio that if a company has the ratio less than 1 it's a negative one. So in this ratio, numerator is basically getting reduced(means the inventory is now not getting considered), so why again during analysis we take 1 to compare whether the company is good or bad. Because the numerator is basically reduced and now to get a better comparison we should take less than 1, like instead of 1 take as 0.8 or something...
Hi Raghav, thanks for your question. In the quick ratio we were just evaluating whether your quick assets are sufficient enough to cover current liabilities. Strictly only going by this, I made a comment that less than 1 may not be good enough. I am very happy to read your comment as you are right !. In the overall scheme of things and depending on the industry, 0.8 or 0.7 may also be good enough.
Sir could you please also tell us in which industry we can expect a higher account receivables turnover ratio and in which industry we can expect the lower ratio? and similarly could you please connect these ratios which different industries?
1600 is not already collected, its pending collection thats why its receivable, 6400 collected leaving 1600 still pending…i m bit confused with your explanation because of this.
Absolutely awesome.i have wasted 2-3 hrs just trying to understand the logic behing these ratios and formula and afted watching this i have finally got clear understanding on how these formulas are made and what they interpret.now i dont have to memorise the formula.
Thanks a lot
Download the Colgate Accounts Receivable Turnover Ratio excel template used in this video from this link - www.wallstreetmojo.com/ratio-analysis-template/
Hi there, this link is not usable anymore
This video was very step by step to learn this ratio in detailed manner thank you for such an amazing video.
Best video and great step by step explanation. Excellent Work.
Excellent explanation. Best I’ve seen! Thank you!
If its collecting 1600 worth of receivables 5 times, it means, it has already collected the 8000 given as credit.
Then why receivables seen as 1600, shouldnt it be zero. Pls clear my doubt
beautifully explained the meaning of Accounts Receivables Turnover Ratio
Hello kesi, what r u learning means doing any college or what??
Hi! Credit Sales means product or service sold on credit basis wherein you are yet to receive the amount. Account receivables means amount not received but yet to be received. So in your example when you show 1200 as receivables, does it mean the amount has already been received?
Very Interesting! Thanks for the Video.
Simply Excellent !
Your comment made our day, thank you!
very useful.
I have a question regarding the construction industry:
shall we include the retention amount which will be paid at the end of the contract in the receivable and deduct the advance paid by the client to get the net account receivable ?
what about the unbilled revenue which is included in the revenue at the end of the Year based on the percentage of completion method?
thank you po!
Sir can you please make video for class 11 of accounts chapter cash book . Hope you will help me to understand cash book
good explanation
Hi, If opening balance and closing balance are 0 or missing any one of them then how to calculate average debtors. Please help.
If opening is not provided closing receivables will be considered as average receivables.
THANKS@@Startend1234
Sir please explain me one thing related to the numerator of quick ratio: my doubt is you had previously said about current ratio that if a company has the ratio less than 1 it's a negative one. So in this ratio, numerator is basically getting reduced(means the inventory is now not getting considered), so why again during analysis we take 1 to compare whether the company is good or bad. Because the numerator is basically reduced and now to get a better comparison we should take less than 1, like instead of 1 take as 0.8 or something...
Hi Raghav, thanks for your question. In the quick ratio we were just evaluating whether your quick assets are sufficient enough to cover current liabilities. Strictly only going by this, I made a comment that less than 1 may not be good enough. I am very happy to read your comment as you are right !. In the overall scheme of things and depending on the industry, 0.8 or 0.7 may also be good enough.
@@wallstreetmojo got it sir. What you wanted to say 👍😊
good example
thanks for the video.
Hi there, r u an accountant??
Sir could you please also tell us in which industry we can expect a higher account receivables turnover ratio and in which industry we can expect the lower ratio? and similarly could you please connect these ratios which different industries?
1mmpmmy
Llorpu
1bggypl
T
1
Hiii sir
1600 is not already collected, its pending collection thats why its receivable, 6400 collected leaving 1600 still pending…i m bit confused with your explanation because of this.