Efficiency Ratios Flashcards
1
Q
What is the formula for Expenses in Relation to Revenue (%)?
A
Expenses / Revenue x 100
2
Q
How do you calculate Average Inventory?
A
Opening Inventory + Closing Inventory / 2
3
Q
What is the formula for Inventory Rate of Turnover (times)?
A
Cost of Sales / Average Inventory
4
Q
How do you calculate Inventory Rate of Turnover (days)?
A
Average Inventory / Cost of Sales × 365
5
Q
What is the formula for Receivable Days?
A
Trade Receivables / Credit Sales x 365
6
Q
How do you calculate Payable Days?
A
Trade Payables / Credit Purchases x 365
