Average Payment Period – The Specifics

| Category: Financial.

Also known as an important solvency ratio, the average payment period (APP) assesses how much time it takes for a business to pay its vendors, in the case of purchases made on credit. Many times, when a business makes an important purchase, credit arrangements are made beforehand. These arrangements might give the buyer a specific… Read more

Average Inventory Ratio

| Category: Financial.

The purpose of this article is to explain the characteristics of the average inventory ratio, how to calculate the ratio, and why it is utilized. For one thing, the average inventory ratio is known as a usage ratio that specifically calculates how much time it takes a firm to sell its inventory. Expressly, it points… Read more

Asset Turnover Ratio: The Basics

| Category: Financial.

The asset turnover ratio is a widely used efficiency ratio that analyzes a company’s capability of generating sales. It accomplishes this by comparing the average total assets to the net sales of a company. Expressly, this ratio displays how efficiently a company can utilize this in an attempt to generate sales. To be more precise,… Read more

Accumulated Depreciation Ratio Explained

| Category: Financial.

In today’s post, we will focus on explaining the specifics of the accumulated depreciation ratio. We’re talking about a fixed assets ratio that calculates the value, age, and usefulness of the fixed assets present on a firm’s balance sheet. In essence, these are compared in relation to the total amount of depreciation taken on by… Read more