Stock Turnover
What does Stock Turnover Ratio calculate?
Measures the number of times inventory is converted into sales in a period of time, usually one year.
What does Stock Turnover Ratio (number of days) calculate?
Measures the number of times, on average, how many days inventory is converted into sales.
What does Debtor Days Ratio calculate?
How long, on average, it takes the business to recover payment from customers who have bought goods on credit.
What does Creditor Days Ratio calculate?
How long, on average, it takes the business to repay suppliers that the business bought goods from on credit.
What does Gearing Ratio calculate?
Measures the extent to which the capital employed by a firm is financed from loan capital. (How much the company is using their long-term loan to reimburse into the company)
What is the equation for Stock Turnover Ratio? (Bonus for the Stock Turnover Ratio (in days) as well)
Cost of goods sold / Average inventory
(Average stock / Cost of sales) x 365
What is another name for Stock Turnover Ratio (number of days)?
Days Inventory Outstanding (DIO)
What is another name for Debtor Days Ratio?
Trade Receivables Turnover
What is another name for Creditor Days Ratio?
Trade Payables Turnover
What is the equation for Gearing Ratio?
(Non-current liabilities / Capital employed) x 365
Find the Stock Turnover Ratio
Revenue- 849
Cost of sales- 377
Stock - 58
Stock Turnover Ratio = Cost of sales / Stock
377 / 58 = 6.5 times
Find the Stock Turnover Ratio (days)
Revenue- 752
Cost of sales- 122
Stock - 35
*Up to 3 sig figs
Stock Turnover Ratio (days) = (Average stock / Cost of sales) x 356
(35 / 122) x 356 = 102
Find the Debtor Day Ratio
Revenue- 593
Cost of goods- 341
Stock- 45
Debtors- 31
*Up to 3 sig figs
Debtor Days Ratio = (Debtors / Total revenue) x 356
(31 / 593) x 356 = 18.6
Find the Stock Turnover Ratio
Revenue- 735
Cost of sales- 248.5
Opening Stock- 98
Closing Stock- 44
Average value of stock = (Opening stock + Closing stock) / 2
(98 + 44) / 2 =71
Stock Turnover Ratio = Cost of sales / Average value of stock
248.5 / 71 = 3.5 times
Find the Stock Turnover Ratio (days)
Revenue- 394
Cost of sales- 174
Opening Stock- 22
Closing Stock- 48
*Up to 3 sig figs
Average value of stock = (Opening stock + Closing stock) / 2
(22 + 48) / 2 = 35
Stock Turnover Ratio (days) = (Average stock / Cost of sales) x 356
(35 / 274) x 356 = 46.6 times
Find the Debtor Day Ratio
Revenue- 734
Cost of goods-267
Stock- 53
Debtors- 45
*Up to 3 sig figs
Debtor Days Ratio = (Debtors / Total revenue) x 356
(45 / 734) x 356 = 21.8
Find the Stock Turnover Ratio
Revenue- 625
Cost of sales- 135.2
Opening Stock- 30
Closing Stock- 22
Average value of stock = (Opening stock + Closing stock) / 2
(30 + 22) / 2 =26
Stock Turnover Ratio = Cost of sales / Average value of stock
135.2 / 26 = 5.2 times
Find the Stock Turnover Ratio (days)
Revenue- 327
Cost of sales- 251
Opening Stock- 52
Closing Stock- 27
*Up to 4 sig figs
Average value of stock = (Opening stock + Closing stock) / 2
(52 + 27) / 2 = 39.5
Stock Turnover Ratio (days) = (Average stock / Cost of sales) x 356
(39.5 / 251) x 356 = 56.02 times
Find the Debtor Day Ratio
Revenue- 629
Cost of goods-342
Stock- 65
Trade Payables- 28
Trade Receivables- 34
*Up to 3 sig figs
Debtor Days Ratio = (Debtors / Total revenue) x 356
(34 / 629) x 356 = 19.2