Also called the Inventory Turnover Ratio, this is a measure of the number of times inventory is sold or used in a time period corresponding to the average inventory held by the company. This ratio can help us determine how efficiently the company is using its inventory (raw materials) to generate revenue and income. i.e., how quickly is the company able to transform the inventory into finished goods that can be sold and generate an income.
A high turnover rate means that the company is utilizing its available inventory effectively but a very high value may cause risks of inadequate inventory levels. Whereas, a low turnover rate means that the company is overstocking or there are deficiencies in the production strategies.
Formula:
STR or ITR = Total cost of goods sold / Average Inventory
stock turnover ratio= cost of goods sold divided by stock or you can say it like... net sales / average inventory
Cost of goods sold/Average Stock * 100
An unusually high Inventory Turnover Ratio compared to Industry could mean a Business is losing sales because of inadequate stock on hand.
Debtor turn over ratio = Total sales / debtors By using this formula debtor turnover ratio can be found.
yes it can
stock turnover ratio= cost of goods sold divided by stock or you can say it like... net sales / average inventory
Cost of goods sold/Average Stock * 100
An unusually high Inventory Turnover Ratio compared to Industry could mean a Business is losing sales because of inadequate stock on hand.
turnover ratio +
Stock holding ratio is the same as inventory turnover ratio. To find this ratio one must find the cost of goods sold to a business and its average inventory over a certain time period.
1. Ratios for management a. Operating ratio b. Debtors turnover ration c. Stock turnover ratio d. Solvency ratio e. Return on capital 2. Ratios for creditors a. Current ratio b. Solvency ratio c. Fixed asset ratio d. Creditors turnover ratio 3. Ratios for share holders a. Yield ratio b. Proprietary ratio c. Dividend rate d. Capital gearing e. Return on capital fund.
Stock turnover period = Closing stock x 365 / cost of sales
five
Debtor turn over ratio = Total sales / debtors By using this formula debtor turnover ratio can be found.
Capital turnover = Sales/ Invested capital
yes it can
the formula of calculating account receivable turnover = Net Sales/ average gross receivable