ACTIVITY RATIOS

Question 1

ACCOUNTS RECEIVABLE TURNOVER

Answer 1

NET CREDIT SALES / AVERAGE ACCOUNTS RECEIVABLE

Question 2

DAYS’ SALES OUTSTANDING IN RECEIVABLES

Answer 2

DAYS IN YEAR / ACCOUNTS RECEIVABLE TURNOVER

Question 3

INVENTORY TURNOVER

Answer 3

COST OF GOODS SOLD / AVERAGE INVENTORY

Question 4

DAYS’ SALES IN INVENTORY

Answer 4

DAYS IN YEAR / INVENTORY TURNOVER

Question 5

ACCOUNTS PAYABLE TURNOVER

Answer 5

PURCHASES / AVERAGE ACCOUNTS PAYABLE

Question 6

DAYS’ PURCHASES IN ACCOUNTS PAYABLE

Answer 6

DAYS IN YEAR / ACCOUNTS PAYABLE TURNOVER

Question 7

OPERATING CYCLE

Answer 7

DAYS’ SALES OUTSTANDING IN RECEIVABLES + DAYS’ SALES IN INVENTORY

Question 8

CASH CYCLE

Answer 8

OPERATING CYCLE - DAYS’ PURCHASES IN ACCOUNTS PAYABLE

Question 9

WORKING CAPITAL TURNOVER RATIO

Answer 9

SALES / WORKING CAPITAL

Question 10

FIXED ASSETS TURNOVER RATIO

Answer 10

NET SALES / AVERAGE NET PROPERTY, PLANT, AND EQUIPMENT

Question 11

TOTAL ASSETS TURNOVER RATIO

Answer 11

NET SALES / AVERAGE TOTAL ASSETS