Efficiency ratios Flashcards by CCMF Imperial

Q

Debt collection period

A

How long it takes customers to pay

Average trade receivables / Credit sales per day

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Q

Creditor payment period

A

How long it takes to pay suppliers

Average trade payables / Credit purchases per day

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Q

Inventory turnover ratio

A

How quickly inventory moves through the business

Cost of sales / Average inventory

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Q

Asset turnover ratio

A

Compares revenue to total assets employed

Revenue / Average total assets

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