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D076 – Ratios unit test passed £7.49
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D076 – Ratios unit test passed

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AR Turnover - Is an activity/asset management ratio. Helps to identify how quickly these accounts receivables turn over during a given year. A rate of 12 indicated that the company is collecting once a month. If less or decreasing then it may indicate that the company is taking longer to collect....

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  • February 3, 2024
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  • 2023/2024
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D076 – Ratios unit test passed
AR Turnover - ✔✔Is an activity/asset management ratio. Helps to identify how quickly these accounts
receivables turn over during a given year. A rate of 12 indicated that the company is collecting once a
month. If less or decreasing then it may indicate that the company is taking longer to collect.



Credit Sales/Accounts Receivable



Average Collection Period (ACP) - ✔✔Is an activity ratio. Convert AR turnover into a day count measure.



365/AR Turnover



Current Ratio - ✔✔Is a liquidity ratio. Short-term debt paying ability.



Current Assets/Current Liabilities



Debt Ratio - ✔✔Is a leverage ratio. Measures the proportion of the firm's assets financed with debt.



Total Liabilities/Total Assets



Debt-to-Equity Ratio - ✔✔Is a leverage ratio. Indicates how many dollars of debt the firm has for every
dollar of equity.



Total Liabilities/Total Owners' Equity



Fixed Asset Turnover (FAT) - ✔✔Is an activity ratio. Is similar to TAT, but indicates how many dollars in
sales the company generates per dollar of fixed assets (property, plant, equipment).

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