Cash turnover ratio describes that how many time cash cycle has repeated in any fiscal year that means how many time inventory is purchased and converted to finished goods and cash is received from debtors.
turnover ratio +
Higher cash flows from financing Lower cash flows from operations Lower liabilities Lower assets Higher current ratio Lower debt to equity ratio Higher asset turnover ratio
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.
five
Debtor turn over ratio = Total sales / debtors By using this formula debtor turnover ratio can be found.
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.
The standard ratio for debtor turnover, also known as accounts receivable turnover, typically varies by industry, but a common benchmark is between 6 to 12 times per year. A higher ratio indicates more efficient collection of receivables, meaning the company is converting credit sales into cash more quickly. However, the ideal ratio can differ based on business model and credit policies, so it's essential to compare it with industry peers for a more accurate assessment.
What Does Receivables Turnover Ratio Mean?An accounting measure used to quantify a firm's effectiveness in extending credit as well as collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets.Some companies' reports will only show sales - this can affect the ratio depending on the size of cash sales.Investopedia explains Receivables Turnover RatioBy maintaining accounts receivable, firms are indirectly extending interest-free loans to their clients. A high ratio implies either that a company operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient.A low ratio implies the company should re-assess its credit policies in order to ensure the timely collection of imparted credit that is not earning interest for the firm.From Riem Samnang
Capital turnover = Sales/ Invested capital
Accounts payable turnover is a financial metric that measures how efficiently a company pays off its suppliers and vendors. It is calculated by dividing the total purchases from suppliers by the average accounts payable during a specific period. A higher turnover ratio indicates that a company is paying its suppliers quickly, while a lower ratio may suggest cash flow issues or delayed payments. This ratio helps assess a company's liquidity and operational efficiency.
The asset turnover ratio is used to calculate how effectively a company is using it's assets to encourage production. If the asset turnover ratio is high, the assets are being used effectively. If the ratio is low, the assets could be used more productively to facilitate production.
the formula of calculating account receivable turnover = Net Sales/ average gross receivable