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	Calculation of Efficiency ratios -

		2008	2009	2010
M	Net Sales	8506616	11993699	16064038
N	Inventory	1388168	2030972	2651760
O	Total Assets	3103645	4049092	5131809
P	Accounts Receivables	57662	90380	95928
Q	Current Assets	1784275	2353271	2905145
R	Current Liabilities	992683	1340291	1743763
S	Working Capital	791592	1012980	1161382
T	Cost of Goods Sold	6361271	9053219	12281744

	Inventory Turnover (T / N)	4.58	4.46	4.63

	Asset Turnover (M / O)	2.74	2.96	3.13

	Receivables Turnover (M / P)	147.53	132.70	167.46

	Net Working Capital Turnover (M / S)	10.75	11.84	13.83

The turnover ratios as above are showing a mixed trend. i.e. Working Capital and Asset turnover has shown continuous improvement over the last two years but Receivables and inventory have not been properly managed in 2009.

The firm needs to focus on management of receivables and inventory, though there has been an improvement in the receivables turnover and inventory turnover in 2010, they are not stable and sufficient steps should be taken so as to ensure continuous efficiency in assets utilization.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M9505085

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