Working Capital Turnover Ratio = Net Sales / Working Capital.
TOTAL ASSET TURNOVER RATIO FORMULA PLUS
Average Inventory is the amount of inventory maintained during the year on average it is arrived at by dividing opening inventory plus closing inventory by two. The formula for Turnover Ratio can be calculated by using the following points:Ĭost of Goods Sold is the total cost of the goods sold during the period under consideration. Total assets turnover ratio of 1.28 times shows that net sales are above average total assets, which are always favorable to have, though it should be compared to previous year’s data as well as other players in the industry to have a complete analysis. Total Assets Turnover Ratio = 1.28 Times.Total Assets Turnover Ratio = 15,000 / 11,750.Total Assets Turnover Ratio = Net Sales / Average Total Assets Total Assets Turnover Ratio is calculated using the formula given below What is the Total Assets Turnover Ratio?Īverage Total Assets is calculated using the formula given below.Īverage Total Assets = (Opening Total Assets + Closing Total Assets) / 2 The given values are Net Sales for the year = $ 15,000, Total assets at the beginning of the year = $ 11,500 and Total assets at the end of the year = $ 12,000. Let us take an example to calculate the Total Assets Turnover Ratio. It shows that sales and, specifically, credit sales are 20 times the accounts receivable outstanding, which is a good turnover to have, but it should be compared to previous year’s data as well as other players in the industry to have a complete analysis. Accounts Receivable Turnover Ratio = 20 times.Accounts Receivable Turnover Ratio = 60,000/ 3,000.
Average Accounts Receivables = 2,500 + 3,500 / 2Īccounts Receivable Turnover Ratio is calculated using the formula given below.Īccounts Receivable Turnover Ratio = Credit Sales / Average Accounts Receivables.What are the Accounts receivable turnover ratio of the company?Īverage Accounts Receivables is calculated using the formula given below.Īverage Accounts Receivables = Opening + Closing / 2 At the beginning of the financial year, Accounts Receivables were $ 2,500, and at the end, accounts receivables were $ 3,500. Let us take another example of a company which is having net credit sales worth $ 60,000 during one financial year. Working Capital Turnover Ratio of six times shows that sales in 6 times that of employed assets of working capital should be compared to the previous year’s data as well as other players in the industry to get a better sense. Working Capital Turnover Ratio = 6 Times.Working Capital Turnover Ratio = 15,000 / 2,500.
Working Capital Turnover Ratio = Net Sales / Working Capital Working Capital Turnover Ratio is calculated using the formula given below. Working Capital = Current Assets – Current Liabilities Working Capital is calculated using the formula given below What is the Working Capital Turnover ratio of the company? Whose revenue from operations or net sales for a period is $ 15,000, and its current assets and current liabilities for the period are $ 10,000 and $ 7,500, respectively. Let us take another example of a company Mobility Inc. It shows that the inventory turnover ratio is 3 times, and it should be compared to the previous year’s data as well as other players in the industry to get a better sense. Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Inventory Turnover Ratio is calculated using the formula given below
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