Efficiency Ratios Flashcards
1
Q
Expenses in Relation to Revenue (%)
A
(Expenses / Revenue) x 100
2
Q
Average Inventory
A
(Opening Inventory + Closing Inventory) / 2
3
Q
Rate of Inventory Turnover (times)
A
Cost of Sales / Average Inventory
4
Q
Rate of Inventory Turnover (days)
A
(Average Inventory / Cost of Sales) x 365
5
Q
Receivable Days
A
(Trade Receivable / Credit Sales) x 365
6
Q
Payables Days
A
(Trade Payables / Credit Purchases) x 365
