The equation for AR Turnover is:
AR Turnover = Net Credit Sales / Average AR
(/=divided by)
Some companies' will report only sales, however this can affect the ratio depending on the amount of cash sales.
Acceleration in the collection of receivables will tend to cause the accounts receivable turnover to increase. Many companies use collection agencies to help them with this process.
Gross.
Allowance for doubtful account is set up based on past experiance of uncollectibility of account receivable. There are two approach in calculating it. firstly based on net credit sales which calculate how much % of net credit sales in the past became uncollectible. secondly based on Account receivable balance which calculate how much % of AR balnce became uncollectible. the asumption here is what happened in the past wil occure repeatly in the future. normally companies using aging schedule. But it is better to use credit rating of our customer to estimate the uncolletible account.
Monthly turnover refers to monthly change. It can be associated with employee turnover or inventory turnover. Managers may use the term to refer to other things as well.
Most auditors prefer to use before-tax net earnings instead of after-tax net earnings when calculating materiality based on income statement chiefly because it eliminates the impact of external influences (ie. Changes in tax laws, changes in the tax rates etc.) that could have a significant impact on a company`s net earnings and subsequently the net income materiality base.
Acceleration in the collection of receivables will tend to cause the accounts receivable turnover to increase. Many companies use collection agencies to help them with this process.
The net caught the ball. The business recorded a net profit after calculating losses and assets.
Gross.
The use of biochemical markers of bone turnover in osteoporosis.
Allowance for doubtful account is set up based on past experiance of uncollectibility of account receivable. There are two approach in calculating it. firstly based on net credit sales which calculate how much % of net credit sales in the past became uncollectible. secondly based on Account receivable balance which calculate how much % of AR balnce became uncollectible. the asumption here is what happened in the past wil occure repeatly in the future. normally companies using aging schedule. But it is better to use credit rating of our customer to estimate the uncolletible account.
Margin and turnover in ROI calculations: Margin: In ROI calculation margin is the ratio of net operating income to total sales. Turnover: In ROI calculation turnover means the ratio of total sales to average operating assets. Operating assets include cash, A/R, inventory, PP&E, and so on. Land held for future use, leases, and investments do not count.
Monthly turnover refers to monthly change. It can be associated with employee turnover or inventory turnover. Managers may use the term to refer to other things as well.
I would prefer an apple turnover, please. On second thought, make that a cherry turnover. Ooh, is that the LAST turnover?
{Revenues-(Cost of Goods Sold+Operating Expenses+Other Expenses+Interest+Tax and Non Tax Expenses-Tax and Non Tax Income)/Revenues}*100 Or to put it simpler, you could use the equation; (net profit/turnover)*100
Most auditors prefer to use before-tax net earnings instead of after-tax net earnings when calculating materiality based on income statement chiefly because it eliminates the impact of external influences (ie. Changes in tax laws, changes in the tax rates etc.) that could have a significant impact on a company`s net earnings and subsequently the net income materiality base.
Any, preferably Cheddar.
Brakes