Efficiency

Question 1

Receivables turnover

Answer 1

Sales1/Average Receivables

how many times can a business collect its average accounts receivables over the year
benchmark: industry specific

Question 2

Inventory turnover

Answer 2

COGS1/Average Inventory

how many times the company sold its total average inventory over the year
benchmark: industry specific

Question 3

Payables turnover

Answer 3

Purchases1/Average Payables

Purchases = Cl. Inv.-Op. Inv. + COGS

how many times can a company pay off its average accounts payables balance over the year
benchmark: industry-specific

Question 4

Asset Turnover (TOA)

Answer 4

Sales1/Average total assets

how many sales are generated from each dollar of company’s assets
benchmark: industry specific

Question 5

Working Capital Turnover

Answer 5

Sales1/Average Working Capital
WC=CA-CL

how many sales are generated from each dollar of company’s working capital
benchmark: industry specific