Asset Management Ratios

Asset Management Ratios in which measures how effectively a firm is managing its assets. 

Asset Management Ratios in which measures how effectively a firm is managing its assets.

              Inventory turnover ratio   =       Sales     

                                                  Inventories

Days Sales Outstanding Ratio is computed by dividing average sales per day into accounts receivable; indicates the average length of time the firm must wait after making a sale before receiving payment.

         Day sales outstanding (DSO)   =           Receivables                      or

                                                          Average Sales Per Day

                                                              Receivables     

                                                          Annual Sales/360

Fixed Assets Turnover Ratio measures how effectively the firm uses its building and machines.

        Fixed assets turnover ratio   =          Sales          

                                                       Net Fixed Assets

        Total assets turnover ratio   =         Sales     

                                                      Total Assets