Financial Ratios (Efficiency)

Question 1

trade receivables collection period?

Answer 1

(TR / revenue) *365

assesses time taken to receive cash from customers

Question 2

inventory holding period?

Answer 2

(inventory / COGS) * 365

assess length of time inventory is held for

Question 3

trade payables period?

Answer 3

(trade payable / purchases) *365

assesses average time taken to settle debts