Management Effectiveness

Question 1

Management Effectiveness ratio

Answer 1

Is the measurement of how proficient managers have been in directing and maintaining set policies

Question 2

Rate of Turnover of Inventories definition and strategies

Answer 2

Measures how efficiently the inventory of the business is being measured.
Strategies:
Sell more inventories through targeting customers
Quit items which are not moving quickly while keeping a good supply of the most popular inventories

Question 3

Rate of turnover of accounts receivable

Answer 3

Measures the effeciency of the business in managing accounts receivable
Strategies:
Tighten credit policy
Follow up bills
Offer discount for early cash settlement
Use bright stickers to remind people of overdue accounts
If bad debts are a concern, then policies may need to be reviewed