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Lindsay Emma Rudd BMA

Efficiency Ratios
This group of ratios measures the effectiveness with which management controls the
internal operation of the business. They consider the following aspects of an enterprise
The extent to which assets are used to generate profits
How well stock is managed
The efficiency of creditor…

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Lindsay Emma Rudd BMA

Improving the stock turnover ratio requires a business to hold lower levels of stock or to
achieve higher sales without increasing stock levels.

Debtors Collection Period / Debtor Days
This ratio calculates the time typically taken by a business to collect the money that it is…


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