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What is the Asset turnover ratio? The total asset turnover ratio is yet another important activity ratio that measures the efficiency of the company in utilizing the assets as part of its operations. Asset turnover ratio meaning The asset turnover ratio tries to build a relationship between the company’s revenue and the company’s overall assets. …
What is Days Inventory outstanding? Days Inventory outstanding or Inventory Days is yet another important activity ratio. Earlier, we discussed Inventory turnover ratio which indicates the number of times the company turns its inventory during the year. Now, let us look at – Days Inventory outstanding. This ratio is also known as Inventory turnover days, …
What is Fixed asset turnover ratio? As part of Financial Ratio Analysis, activity ratios help in understanding the efficiency with which a company utilizes its resources. Similarly, an important activity ratio that measures the efficiency of the company in utilizing the assets as part of operations is – Fixed asset turnover ratio Fixed asset turnover …
What is days sales outstanding ratio? Days sales outstanding or simply Receivable days is an important activity ratio that helps in understanding the efficiency of the company’s operations. It shows how efficient is the company in managing its receivable balance. Days sales outstanding meaning When the company makes a sale of a product or service, …
What is the Receivable turnover ratio? Receivable turnover ratio or debtor turnover ratio is an activity ratio that indicates the efficiency of the company in managing its receivable balance. Receivable turnover ratio meaning When the company makes a sale of a product or service, it often provides a certain credit period for the buyer to …
What is interest coverage ratio? As part of financial ratios analysis, Solvency ratios play an important role. Interest Coverage Ratio (ICR) being an income statement ratio, indicates if the company has earned sufficient earnings so that it can make interest payments on the borrowings. Interest coverage ratio meaning An interest coverage ratio explains …
What is the Defensive Interval Ratio? As part of financial analysis, it is important to look at the liquidity position of any company. This helps in understanding if the company is ready to meet any sudden short term obligations. Defensive Interval Ratio or DIR, in short, is one of the most used liquidity ratio. It …
So, what are financial ratios ? As part of financial analysis, financial ratio plays a significant role. At the outset financial ratios appears to be simple calculation taking some value the numerator and some value in denominator, but the true power of financial ratios are amazing. Below we list 34 important financial ratios as part …