Practice - Efficiency or Activity Ratios
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Practice Questions
Test your understanding with targeted questions
What formula is used for the Inventory Turnover Ratio?
💡 Hint: Consider how quickly inventory moves through the business.
What does a high Debtors Turnover Ratio indicate?
💡 Hint: Think about how this affects cash flow.
4 more questions available
Interactive Quizzes
Quick quizzes to reinforce your learning
What is the Inventory Turnover Ratio?
💡 Hint: Remember how inventory relates to cost management.
True or False: A higher Debtors Turnover Ratio is generally seen as positive.
💡 Hint: Consider the impact on cash flow.
1 more question available
Challenge Problems
Push your limits with advanced challenges
A tech startup has net sales of $1,500,000, with total assets of $750,000, average accounts receivable of $100,000, and cost of goods sold of $900,000. Calculate the Inventory Turnover Ratio, Debtors Turnover Ratio, and Total Asset Turnover Ratio.
💡 Hint: Use the respective formulas for each ratio.
Discuss the impact on a company's operational strategy if its Total Asset Turnover Ratio drops significantly over two years.
💡 Hint: Consider what that means for sales and future profitability.
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