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Increasing payables turnover can be seen as good for a company, as it indicates that the company is paying its suppliers more quickly, which can strengthen relationships and potentially lead to better terms or discounts. However, if the turnover is increasing too rapidly, it may signal that the company is not managing its cash flow effectively, risking liquidity issues. Therefore, while a moderate increase is generally positive, it is essential to balance it with overall financial health.
What else can I help you with?
Is Increasing in turnover is good or bad?
An increase in inventory turnover is good. This means that over a certain period of time, the amount of times the inventory of a company was sold and replaced has increased.
What is trade and other payables?
Trade and other payables refer to the liabilities a company owes to its suppliers and creditors for goods and services received but not yet paid for. This category includes trade payables, which are amounts owed to suppliers for inventory purchases, as well as other short-term obligations such as accrued expenses and taxes payable. These payables are recorded on the balance sheet and are crucial for managing a company's cash flow and working capital. Proper management of trade and other payables is essential to maintain good supplier relationships and ensure financial stability.
What does higher Sales Turnover indicates?
its means company have good financial position and having the goodwill
How do you calculate optimum level of current assets?
It depends on many factors. The demand for the product. when the demand for the product is established. then you make projections for sales. The Return on investment should be high. its a results of net profit/(current assets + fixed assets). The ROI will be high when the denominator is low. So when you keep current asset level low at the year end. the ROI will be high. You can keep the current assets level low only when your cash conversion cycle(CCC) is shorter. you can have shorter CCC. only when the Inventory turnover, and Recievables turnover are high and payables turn over is low (or) Inventory turnover, and Recievables turnover are low and payables turn over is high (if you have good credit terms with suppliers). Over the years it was a bone of contention for many finance manager on how to manage an optimum level.still a lot of work is going on to find out the optimum levels for current assets.
What is the Receivables Turnover Ratio?
The Receivables turnover ratio is used to measure the number of times on an average; the receivables are collected during a particular timeframe. A good receivables turnover ratio implies that the company is able to efficiently collect its receivables.Formula:RTR = Net Credit Sales / Average Net Receivables
What is Receivables Turnover Ratio?
The Receivables turnover ratio is used to measure the number of times on an average; the receivables are collected during a particular timeframe. A good receivables turnover ratio implies that the company is able to efficiently collect its receivables.Formula:RTR = Net Credit Sales / Average Net Receivables
What is a good inventory turnover?
Good inventory turnover will depend on the industry. For instance, home sales is much slower than groceries and personal goods.
What is sales turnover from annual turnover?
Sales turnover is purely the revenue from selling a good or service. It excludes things like return on investment, interest earned and asset appreciation which are also included in the annual turnover.
How did the east india company come into power?
east India company had come into exitance by increasing tax,selling machine made good with rates,increasing general price levels,economic exploitation.EAST INDIA COMPANY captured power in 1757but established in1857 revolt.
What strategies can be implemented to maintain a good employee turnover rate within the company?
To maintain a good employee turnover rate, companies can implement strategies such as offering competitive salaries and benefits, providing opportunities for career growth and development, fostering a positive work culture, promoting work-life balance, and conducting regular feedback and recognition for employees.
What is considered a good cash flow per share for a company?
A good cash flow per share for a company is typically considered to be positive and increasing over time. This indicates that the company is generating enough cash to cover its expenses and potentially invest in growth opportunities.
Is it good if a company's annual sales go up while the gross profit margin goes down and the net profit figures go down also what does this mean for the company?
If company sales are increasing but gross profit as well as net profit is declining, it means that sales are not increasing as rapidly as company costs and expenses are increasing. A thorough review should be conducted to analysis the situation and selling price should be adjusted according to increase in cost prices.
