Financial Efficiency
Asset turnover measures a business' sales in relation to the assets used to make sales. Formula; Revenue/Net assets (Total assets-Total liabilities). Difficult to give this ratio a standard figure as it differs depending on the type of product and company.
Inventory turnover measures the number of times that a business turns over its goods for sale. Formula; Cost of goods sold/Average Inventories. This figure will change depending on the type of business. A greengrocer for example will change stock everyday and therefore expect their turnover to be between 250-300.
Receivables is how long it takes the company to collect debts owed by customers. Standard credit terms are usually 30, 60, 90, and 120 days. The shorter the answer the better for the business. Formula; Receivables/Revenue x365
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