Key ratios - efficiency
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# Key ratios - efficiency

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• Discuss This Topic
 BabaJide Martins F. 0 0 Can someone explain more better what are the differences between profitability and efficiency?
 Morne V. 0 0 The table relating to efficiency ratio is informative. it helps a lot to find out efficiency of an organization in term of utilization of assets for generating income
 Sunday O. 0 0 making your ration efficiency in accounting
 Odongo M. 0 0 Accounting -> Key ratios - efficiency Key ratios - efficiency Ratio Formula Explanation Efficiency 1. Debtors turnover Credit sales/average debtors This ratio may be measured in 'times per annum' or in days. It shows how quickly the money is returned to the business when goods are sold on credit. To evaluate the effectiveness of this ratio it has to be compared to the credit terms offered to debtors. 2. Stock turnover Cost of sales/average inventory Measures how quickly stock (inventory) is sold on average. Like debtors turnover it may be measured in 'times per annum' or in days 3. Creditors turnover Credit purchases/average creditors This measures the average time taken to pay creditors. When compared to the credit terms offered by creditors it may indicate if the business is taking advantage of discounts.
 Manish K. 0 0 The table relating to efficiency ratio is informative. it helps a lot to find out efficiency of an organization in term of utilization of assets for generating income.
 Penelope M. 0 0 yeah, this could be a good thing or a bad thing for a business.
 Adil N. 0 0 What is the general effeciency of key ratios?
 Adil N. 0 0 What is the general effeciency of key ratios?
 Gloria N. 0 0 got it
 Epie E. 0 0 This ratio tells how good a company is good at raising cash from both cash and credit sales as well as how quick its for the company to settle her creditors from income regenerated from stocks sold which will depend too on how many times the company is able to sale these stock.
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