Set
Efficiency ratio
-Shows how well a firm's resources have been used, such as the amount
of time taken by firm to
the sell its stock/inventory or
average number
the
of days taken to money from
collect its debtors
sell their stock faster than
-
Ex:supermarkets luxury jewellers.
Stock turnover:
-Stock turnover ratio (inventory turnover ratio) number
measures the of times
a firm sells its stocks within a time period (usually 1 year).
Indicate the which firm sells all its stock.
-> speed at a
replenishes
->
The higher stock turnover, the
higher of
amount stock is sold
->
More efficient in
generate profit.
Stock turnover costs of goods sold
-
E
(number of times) average stock
in
* the
formula
sheet stock turnover
number ofdays) coteroid
=
165
-ways to
reduce stock level to improve stock turnover ratio:
·
Be replenished more regularly
-
to hold lower stock levels
·
Divestment (disposal) of stocks which are slow to sell
Getting firm's
rid of obsolete stock in the portfolio)
Reduce the range of products being stocked only keep best-
·
-
selling products.
Efficiency ratio
-Shows how well a firm's resources have been used, such as the amount
of time taken by firm to
the sell its stock/inventory or
average number
the
of days taken to money from
collect its debtors
sell their stock faster than
-
Ex:supermarkets luxury jewellers.
Stock turnover:
-Stock turnover ratio (inventory turnover ratio) number
measures the of times
a firm sells its stocks within a time period (usually 1 year).
Indicate the which firm sells all its stock.
-> speed at a
replenishes
->
The higher stock turnover, the
higher of
amount stock is sold
->
More efficient in
generate profit.
Stock turnover costs of goods sold
-
E
(number of times) average stock
in
* the
formula
sheet stock turnover
number ofdays) coteroid
=
165
-ways to
reduce stock level to improve stock turnover ratio:
·
Be replenished more regularly
-
to hold lower stock levels
·
Divestment (disposal) of stocks which are slow to sell
Getting firm's
rid of obsolete stock in the portfolio)
Reduce the range of products being stocked only keep best-
·
-
selling products.
