Efficiency Flashcards
1
Q
Trade receivable days
A
The average number of days debtors take to pay their invoices
2
Q
Trade payable days
A
The average number of days for the business to pay its suppliers (creditors)
3
Q
Inventory turnover
A
The average number of days a business holds its stock (inventory) and helps it to determine when to reorder
- where a business uses perishable supplies inventory days will be low
- high number of days may mean that the business has money tied up in stock
