Activity 17 : Vodafone creditors' turnover ratio

Go to the database of businesses, find the relevant information and calculate the creditors' turnover ratios as far as you can. Beware, you may be surprised at your answers!

Now contrast your calculations with the following extract from Vodafone's annual report:

Creditor payment termsIt is the Group's policy to agree terms of transactions, including payment terms, with suppliers and, provided suppliers perform in accordance with the agreed terms, it is the Group's normal practice that payment is made accordingly. The number of days outstanding between receipt of invoices and date of payment, calculated by reference to the amount owed to trade creditors at the year end as a proportion of the amounts invoiced by suppliers during the year, was 36 days in aggregate for the Group.

Did you get this?

Don't say we didn't warn you: these are astonishing results, aren't they? A year to pay their creditors in 2002 and a year and eight months to pay in 2001? Can't be right can they? Well, arithmetically we have done nothing wrong ... what's the problem, then, as surely Vodafone can't be abusing its creditors' privileges so badly can they?

You can now attempt Additional question 16 or move on to the Next Section.

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