Turnover ratios, Finance Basics

Assignment Help:

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.


Related Discussions:- Turnover ratios

Finance Assignment, I have an assignment for my finance class. The company ...

I have an assignment for my finance class. The company that i have FOR industry analysis is COSTCO WHOLESALES CORP THAT ITS STOCK IS IN DISCOUNT AND VARIETY StORES INDUSTRY. I need

What do you mean listing of securities, What do you mean listing of securit...

What do you mean listing of securities? Explain. Listing of Securities: Listing means admission of the securities to dealings on a recognized stock exchange. Securities of an

Student, Intercontinental Baseball Manufacturers (IBM) has an outstanding b...

Intercontinental Baseball Manufacturers (IBM) has an outstanding bond with a $1,000 face value that matures in 10 years. The bond, which pays $25 interest every six months ($50 per

Calculate the percentage of equity of firm sells, Consider an economy with ...

Consider an economy with three dates {t=0, 1, 2}. A firm has assets in place that generate an output (profit) of either 40 in state L or 160 in state H at t=2. Bothe states equally

What is a treasury bill, What is a Treasury bill? How risky is it? Trea...

What is a Treasury bill? How risky is it? Treasury bills are short-term debt instruments granted by the U.S. Treasury which are sold at a discount and pay face value at maturit

Calculate the overhead absorption rates, A manufacturing organisation has t...

A manufacturing organisation has three production cost centres, the cutting department, the processing department and the finishing department, and two service cost centres, the st

Comparison between modern and traditional methods, Comparison between Moder...

Comparison between Modern and Traditional Methods Both modern and traditional methods will indicate or show strong weaknesses which like a company cannot use either to choose

Gross requirements of mrp system, Gross requirements of MRP System Acc...

Gross requirements of MRP System Accumulation of demand for this item from all sources independent and dependent. For instance, customer orders, spare part requirements, repla

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd