Calculate Trade Payables Turnover Ratio.

The correct option is 2.96 times.

Understanding the Trade Payables Turnover Ratio:
The Trade Payables Turnover Ratio (also known as the Creditors Turnover Ratio) is an efficiency ratio that measures how many times, on average, a business pays its suppliers and trade payables during an accounting period. It shows the relationship between net credit purchases and average trade payables.

The formula to calculate the Trade Payables Turnover Ratio is:

$$\text{Trade Payables Turnover Ratio}=\frac{\text{Net Credit Purchases}}{\text{Average Trade Payables}}$$

Components of the Formula:
1. Net Credit Purchases: This refers to total purchases made on credit minus purchase returns. If total credit purchases are not directly given, they are calculated from total purchases by subtracting cash purchases.
2. Average Trade Payables: This is the average of trade payables (creditors + bills payable) at the beginning and the end of the year:

$$\text{Average Trade Payables}=\frac{\text{Opening Trade Payables}+\text{Closing Trade Payables}}{2}$$

Calculation:
Using the company's financial records, dividing the net credit purchases by the average trade payables gives the final turnover rate:

$$\text{Trade Payables Turnover Ratio}=2.96\text{times}$$

This indicates that the business pays off its credit obligations approximately 2.96 times throughout the financial year.