Show the calculation of the following activity ratios: (1) The receivables turnover ratio, (2) The inventory turnover
Question:
(1) The receivables turnover ratio,
(2) The inventory turnover ratio, and
(3) The asset turnover ratio.
What information about a company do these ratios offer?
Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,... Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Receivables turnover ratio Net sales Average accounts r...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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