Efficiency Ratios Flashcards
1
Q
What is the formula for the Rate of Inventory Turnover (times)?
A
Cost of sales/ Average Inventory
2
Q
What is the formula for the Rate of Inventory Turnover in days?
A
(Average Inventory/ Cost of sales) x 365
3
Q
What is the formula for Trade Receivable Days?
A
(Trade Receivables/Credit Sales) x 365
4
Q
What is the formula for Trade Payable Days?
A
(Trade Payable/Credit Purchases) x 365
