Asset / Inventory Management Ratios

Table of Contents

Accounts Payable (Creditors) Turnover Ratio

Accounts Payable Turnover Ratio = Credit Purchases / Average Accounts Payable

Where
Average Accounts Payable = (Beginning Accounts Payable + Ending Accounts Payable) / 2

Accounts Receivable Turnover Ratio = Credit Sales / Average Accounts Receivable

Where
Average Accounts Receivable = (Beginning Accounts Receivable + Ending Accounts Receivable) / 2

Asset Turnover Ratio = Sales / Average Total Assets

Where
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventories

Where
Average Inventories = (Beginning Inventories + Ending Inventories) / 2