Accounts turnover ratio

Similarly good management practice is to hold accounts receivable at a low level and to have a high accounts-receivable-turnover ratio, as given by... 

An accounts-receivable-turnover ratio of 12 is considered fairly good for a manufacturing company This implies an average collection period of about 1 month. The price obtained for the goods should include an allowance for interest (otherwise obtainable) on the money tied up for such a period. 

The efficiency ratio, also called the activity ratio, measures the speed at which a company moves its assets through operations. The efficiency and solvency ratios can be used together to effectively assess fhe firm s solvency position. Two of the most common activity ratios are the accounts receivable turnover and inventory turnover ratios. 

The accounts payable turnover ratio is computed by taking the total purchases from suppliers made on credit and then dividing them by the average accounts payable during the same period. This number shows how many times per period the company pays its average payables amount. For example, if a company has 45,500 in credit purchases from suppliers in a year and has an average accounts... 

If the account payable turnover ratio is trending down from one period to another, this indicates that the company is taking longer to pay its suppliers than it was before. It may also indicate the financial condition of the company is worsening. If the ratio is trending up, the company is paying its suppliers at a faster rate. 

As with the accounts receivable turnover ratio, accounts payable turnover can be stated in the number of days it takes to pay suppliers as follows ... 

While the more common objectives used are maximum profit and minimum cost, the finance community has been making financial business decisions for years by taking into account other indicators such as market to book value, liquidity ratios, leverage, capital structure ratios, return on equity, sales margin, turnover ratios and stock security ratios, among others. 

The resynthesized triglycerides invariably contain saturated and unsaturated fatty acids in an approximate 2 1 ratio. Typically, nearly all of the fatty acid content of adipose tissue can be accounted for by just six different types of molecule with palmitate (06 0) and oleate (08 1) together contributing over 75% of the total. Turnover studies suggest that for most people, much of the fat is metabolically relatively inert acting as depot with a long half-life, and only a smaller component of the stored fat being readily accessible. 

Compare the enzyme turnover number with a typical hydrogen-ion turnover number. What does this tell you about the efficiency of enzymes Compare the activation energy for the enzyme-catalyzed reaction with that for the acid-catalyzed reaction. Does the difference in a values account completely for the ratio of turnover numbers for the enzyme and H+ ... 

The role of calcification in the cycling of carbon has been discussed in Chapter 2,1, and its importance can be gauged from calculations by Li (1972) that the ratios, by weight, of sedimentary rocks are 71 12 15 2 for shales, sandstones, carbonates and evaporites, respectively. This implies that the carbonate cycle accounts for 15% of the total sediment cycle which has been estimated to have a turnover time of 300 My. 

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