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Cambridge Business Management for the IB diploma

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3.6 Efficiency ratio analysis

Efficiency ratios

  • Inventory (stock) turnover ratio:

  • Debtor days (days’ sales in trade receivables) ratio = Debtors (accounts receivable) x 365 / revenue

  • Creditor days (days in trade payables) ratio:

  • Gearing ratio:

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3.6 Efficiency ratio analysis

Efficiency ratios

  • Inventory (stock) turnover ratio:

  • Debtor days (days’ sales in trade receivables) ratio = Debtors (accounts receivable) x 365 / revenue

  • Creditor days (days in trade payables) ratio:

  • Gearing ratio: