ocr: Creditors Turnover This ratio measures the average length of time that the ousiness takes to settle its debts with its suppliers. Management have a responsibility to ensure that the goodwill of: suppliers is not lost through a consistent failure to settle their debts when due. Creditors lurnover Period- - Average Creditors x 365 Credit Purchases Again, we have to assume that the closing value of creditors as given in the Balance Sheet IS an average and that the cost of goods sold figure taken from The Profit and Loss Account gives a reasonable approximation to the ousiness's credit purchases t ...
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