Efficiency Ratios Flashcards
1
Q
AR DAYS
A
Trade Receivables / Revenue x 365
2
Q
Trade Receivables / Revenue x 365
A
AR DAYS
3
Q
AP Days
A
Trade Payables / Cost of Sales (Purchases) x 365
4
Q
Trade Payables / Cost Of Sales x 365
A
AP Days
5
Q
Trade Payables / Purchases x 365
A
AP Days
6
Q
Inventory Days
A
Inventory / Purchases x 365
7
Q
Inventory/ Purchases x 365
A
Inventory Days
8
Q
Cash Conversion Cycle
A
Inventory Days + AR Days - AP Days
9
Q
Inventory Days + AR Days - AP Days
A
Cash Conversion Cycle
10
Q
What is Cash Conversion Cycle?
A
The time it takes to convert inventory into cash from sales. The efficiency of management in generating cash from short term assets and liabilities.
