Activity Ratios (Efficiency Ratios) | Financial Statement Analysis
8.6 هزار بار بازدید -
3 سال پیش
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Activity ratios (aka efficiency ratios)
Activity ratios (aka efficiency ratios) tell you how well a company is performing in certain areas. For example:
1. asset turnover tells you how well the company is using its assets to generate sales (asset turnover is thus a measure of sales efficiency)
2. fixed asset turnover tells you how well the company is using its property, plant, and equipment to generate sales
3. inventory turnover tells you how many times the company sold its inventory during the period (dividing 365 by inventory turnover tells you how many days it took the company to sell its inventory)
4. receivables turnover tells you how many times the company collected its receivables during the period (dividing 365 by receivables turnover tells you how many days it took the company to collect its receivables; this is called days sales outstanding)
5. payables turnover tells you how many times the company paid the balance owed to its suppliers during the period (dividing 365 by payables turnover tells you how many days it took the company to pay its suppliers; this is called days payable outstanding)
The sum of (a) days to sell inventory and (b) days sales outstanding is the company's operating cycle. Subtracting days payable outstanding from the operating cycle tells you the company's cash conversion cycle.
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1. asset turnover tells you how well the company is using its assets to generate sales (asset turnover is thus a measure of sales efficiency)
2. fixed asset turnover tells you how well the company is using its property, plant, and equipment to generate sales
3. inventory turnover tells you how many times the company sold its inventory during the period (dividing 365 by inventory turnover tells you how many days it took the company to sell its inventory)
4. receivables turnover tells you how many times the company collected its receivables during the period (dividing 365 by receivables turnover tells you how many days it took the company to collect its receivables; this is called days sales outstanding)
5. payables turnover tells you how many times the company paid the balance owed to its suppliers during the period (dividing 365 by payables turnover tells you how many days it took the company to pay its suppliers; this is called days payable outstanding)
The sum of (a) days to sell inventory and (b) days sales outstanding is the company's operating cycle. Subtracting days payable outstanding from the operating cycle tells you the company's cash conversion cycle.
—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education freely available to the world.
—
SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS:
• A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING
• A 44-PAGE GUIDE TO U.S. TAXATION
• A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS
• MANY MORE FREE PDF GUIDES AND SPREADSHEETS
http://eepurl.com/dIaa5z
—
SUPPORT EDSPIRA ON PATREON
*Patreon: prof_mclaughlin
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
https://edspira.thinkific.com
—
LISTEN TO THE SCHEME PODCAST
Apple Podcasts: https://podcasts.apple.com/us/podcast...
Spotify: https://open.spotify.com/show/4WaNTqV...
Website: https://www.edspira.com/podcast-2/
—
GET TAX TIPS ON TIKTOK
TikTok: prof_mclaughlin
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ACCESS INDEX OF VIDEOS
https://www.edspira.com/index
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CONNECT WITH EDSPIRA
Facebook: Facebook: Edspira
Instagram: Instagram: edspiradotcom
LinkedIn: LinkedIn: edspira
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CONNECT WITH MICHAEL
Twitter: Twitter: Prof_McLaughlin
LinkedIn: LinkedIn: prof-michael-mclaughlin
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ABOUT EDSPIRA AND ITS CREATOR
https://www.edspira.com/about/
https://michaelmclaughlin.com
3 سال پیش
در تاریخ 1400/03/09 منتشر شده
است.
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