_ trade receivable turnover _trade payable turn over _inventory turn over More t
ID: 2516542 • Letter: #
Question
_ trade receivable turnover _trade payable turn over _inventory turn overMore than 400 words thank you Ratio Efficiency Trade 2016 2015 (S) 3,900,007 Receivable's 38,352,56 x365 4,252,455 40,955.766 100% Turnover (days) -36 days - 36 days Trade Payable's Turnover 4,426,897 8,711,376x36 448 4,481,420 9,435,813 * 365 - 175 days - 164 days Inventory Turnover (days) 194,306.5 8,711,376x 365 4,481,420 9,435,813 x 365 - 8 days -7days Efficiency. Ratios may be used to measure the efficiency with which certain resources have been utilized within the business. These ratios are also referred to as activity ratios
Explanation / Answer
In the given case we can see that the Inventory turnover ratio has increased from 7 days in 2015 to 8 days in 2016 which means that on a average the time taken to sell the inventory in 2016 has increase by 1 day as compared to 2016 which means there are certain inefficiency has come into process or there may be a possible fall in the Demand for the product sold by the company.
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