DEBTORS TURNOVER RATIO

This ratio exhibits the speed of the collection process of the firm in collecting the overdues amount from the debtors and against Bills receivables. The speediness is being computed through debtors velocity from the ratio of Debtors turnover ratio.
Debtors Velocity
This is an extension of the earlier ratio to denote the effectiveness of the collection
department in terms of duration.
Lesser the duration shows greater the effectiveness in collecting the dues which means
that the collection department takes only minimum period for collection and vice versa.
Creditors Turnover Ratio
It shows effectiveness of the firm in making use of credit period allowed by the creditors during the moment of credit purchase.

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