Efficiency/ Activity Ratios

Question 1

Inventory Turnover Ratio

Answer 1

Cost of Goods Sold / Avg Inventory

Question 2

Receivables Collection Period

Answer 2

Avg Acc Rec/ Credit Sales x 365

Question 3

Accounts Receivable Turnover

Answer 3

Credit Sales / Avg Acc Receivables

Question 4

Payables Payment Period

Answer 4

Avg Acc Payable / Cost of goods sold x 365