Turnover Ratio

Annual income or expenditure particularized by tbe subscript Annual allowances against tax other than for depreciation of fixed assets Annual writing down (depreciation) of fixed assets, allowable against tax Asset-turnover ratio defined by Eq. (9-131)... 

Asset-turnover ratio (ATR) is a commonly used measure of company performance, defined as... 

Thus (ROA) can be improved by increasing either (ATR) or (PM). A variation of Eq. (9-131) is the fixed-asset turnover ratio (FATR), defined as... 

Other ratios can easily be deduced from those hsted. For example, the return on assets (ROA) and the asset-turnover ratio (ATR) are... 

Good management practice will hold inventories at the lowest possible levels consistent with customer satisfaction and efficient plant operation. Excessive inventories are unproductive and are an investment having httle or no rate of return. Excessive inventories should be maintained only when supphes are erratic or rising in price. Management should normally aim for a high inventoiy-turnover ratio, as given by ... 

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 percentage markup on cost is calculated for a known capital-turnover ratio and a desired rate of return on capital. As with absorption pricing, the percentage markup on manufac turing cost per unit of prodlic tion is calculated for a normal annual produc tion rate. If this produc tion rate is exceeded, the rate of return on capital will be higher than projected because of the decrease in unit cost. Conversely, if the... 

Activity ratios are a measure of how effectively a firm manages its assets. There are two inventory/turnover ratios in common use today. The inventory/sales ratio is found by dividing the inventory by the sales. Another method is to divide the cost of sales by inventory. The average collection period measures the number of days that customers invoices remain unpaid. Fixed assets and total assets turnover indicate how well the fixed and total assets of the firm are being used. 

It has long been known (93) that cobalt(II) complexes of phthalocyanines interact with molecular oxygen. The water-soluble tetrasulfonato derivative of the parent phthalocyanine selectively and catalytically oxidizes 2,6-di-tert-butylphenol to the benzoquinone and the dipheno-quinone in both homogeneous solution (94) and when polymer-supported (95). The active intermediate in the catalytic cycle is proposed to be the (as expected) mononuclear dioxygen complex of the cobalt-tetrasulfonatophthalocyanine system (92). It has been proposed that the formation of a peroxo-bridged dinuclear complex is responsible for the deactivation of the cobalt(II)-tetrasulfonatophthalocyanine system, since such a dinuclear system would be unable to further bind and activate dioxygen (96). Such deactivation results, ultimately, in loss of the catalyst and low turnover ratios. 

Industry profits are indeed high related to those found in other sectors, notably service (retail and wholesaler) industries. This is due in part to the fact that the pharmaceutical industry is asset-intensive rather than labor-intensive, which leads to a low asset-to-sales turnover ratio, which in turn leads to a high rate of return on equity. Conversely, sectors with low asset-to-sales turnover ratios will have low rates of return on equity. 

Financial ratios are classified according to the information they provide. Table 15-6 provides a fist of selected financial ratios used in various pharmacy settings. Different ratios give different pictures of the company s performance and serve different analytical needs. Profitability ratios, liquidity ratios, and turnover ratios are described below. For further discussion of other financial report ratios please refer to Stickney (1999). 

Turnover ratios measure the efficiency with which an organization uses its assets. They are also referred to as efficiency ratios or asset utilization ratios. The two most commonly used turnover ratios are inventory turnover and receivables turnover. 

Inventory turnover ratio = cost of goods sold average inventory (at cost)... 

Receivables turnover ratio = credit sales -f- average... 

Optical yields as high as 56% (but more typically 10-20%) have been recorded by Solodar (41) in the direct asymmetric hydrogenation of ketones with [Rh(COD)(ACMP)2] + BF4. 8 Catalyst turnover ratios of over 1000 were observed. It was found that the stereochemistry was quite dependent on the choice of solvent and its water content. For example, the hydrogenation of 2-octanone in ethanol gave the (+)-S-carbinol with 1.6% ee in N, Af-dimethyl-formamide (DMF) the i -carbinol was observed in 5.1% ee, and in acetic acid the R-carbinol was observed in 12.0% ee. In varying the water content of the isobutyric acid solvent in the hydrogenation of 2-octanone from 0.1 to 8%, the optical yield dropped from 13.9 to 5.3%. 

METHOD G TURNOVER RATIOS. A rapid evaluation method suitable for order-of-magnitude estimates is known as the turnover ratio method. Turnover ratio is defined as the ratio of gross annual sales to the fixed-capital investment,... 

Estimate by the turnover-ratio method the fixed-capital investment required for a proposed sulfuric acid plant (battery limit) which has a capacity of 140,000 tons of 100 percent sulfuric acid per year (contact-catalytic process) using the data from Table 19 for 1990 with sulfuric acid cost at 72 per ton. The plant may be considered as operating full time. Repeat using the cost-capacity-exponent method with data from Table 19. 

The total capital investment for a chemical plant is 1 million, and the working capital is 100,000. If the plant can produce an average of 8000 kg of final product per day during a 365-day year, what selling price in dollars per kilogram of product would be necessary to give a turnover ratio of 1.0 ... 

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