Turnover ratios, Finance Basics

Turnover Ratios

Turnover Ratios/efficiency/asset management ratio

Turnover ratio shows the efficiency along with that the firm utilized the asset or resources at its disposal to create sales revenue or turnover.

This ratio including like:

a) Stock/inventory turnover = Cost of Sales/Average stock

The ratio signifies number of times the stock was turned in sales in a year that is how many times the 'buy-sell' process occurred during the year. Such the higher the stock turnover, just for the better the firm and moreover the higher the sales.

b) Stock holding period   = 365 days/ Stock turnover

(365 x Average stock)  / Cost of sales             

that is  

365 / Stock turnover

The ratio signifies number of days the stock such was held in the warehouse before being sold.

The lower the stock holding period the higher the stock turnover, and vice versa.

Posted Date: 1/30/2013 1:42:30 AM | Location : United States







Related Discussions:- Turnover ratios, Assignment Help, Ask Question on Turnover ratios, Get Answer, Expert's Help, Turnover ratios Discussions

Write discussion on Turnover ratios
Your posts are moderated
Related Questions

Ask questioSay that a buyer of bonds values good bonds at $500 and values bad bonds at $250. Sellers of both good and bad bonds value them at $350. If the fraction of good sellers

Eye Field - Vertebrate Eye The development of eyes starts with evagination of the lateral wall of the forebrain. one on each side, which make the optic vesicles. By vital dye

Timing of Investment a Stock Exchange The ideal way of creation profits on the stock exchange is to buy on the bottom of the market or lowest M.P.S and sell at the top of the

SCENARIO You have just moved out of home and have a part-time job that pays you $18 per hour after tax (you work 20 hours a week). You also have $5000 in a savings account. You

1 st bank offers you a car loan at an annual interest rate of 10% compounded monthly. What effective annual interest rate is the bank charging you?  Solution - Calculate

Example of Capital Asset Pricing Model KK Ltd is an all equity firm whose Beta factor is 1.2, the interest rate on T. bills is currently at 8.5% and the market rate of return

I am struggling with a PowerPoint Presentation 8-10 slide the calculations and understanding Traditional IRAs and Roth IRAs, I guess that I need to prepare this for an audience. Sh

Question 1: (a) (i) What are Asset shares? (ii) State the purpose of calculating Asset shares. (b) Outline the five uses of policy Asset shares? (c) Lif

Earning method - Bases of Valuation The business is valued according to the net stream of income it is expected to create over its lifetime. Determination of maintaina