COMM 217 Lecture Notes - Lecture 7: Accounts Receivable, Inventory Turnover, Asset Turnover
4 Mar 2016
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The current ratio measures the ability of the company to pay its short-term obligations with current assets. Although a ratio between 1. 0 and 2. 0 indicates that sufficient current assets are available to meet obligations when they become due, many companies with sophisticated cash management systems have ratios below 1. 0. (cid:1829)(cid:1873)(cid:1870)(cid:1870)(cid:1857)(cid:1866)(cid:1872) (cid:1844)(cid:1853)(cid:1872)(cid:1867)= (cid:1829)(cid:1873)(cid:1870)(cid:1870)(cid:1857)(cid:1866)(cid:1872) (cid:1827)(cid:1871)(cid:1871)(cid:1857)(cid:1872)(cid:1871) (cid:1829)(cid:1873)(cid:1870)(cid:1870)(cid:1857)(cid:1866)(cid:1872) (cid:1838)(cid:1853)(cid:1854)(cid:1872)(cid:1857)(cid:1871) For every in current liabilities, the company maintains $[current ratio] in current assets. The total asset turnover ratio measures the sales generated from the use of assets. A high ratio suggests that the company is managing its assets (resources used to generate revenues) efficiently. (cid:1846)(cid:1867)(cid:1872)(cid:1853) (cid:1827)(cid:1871)(cid:1871)(cid:1857)(cid:1872) (cid:1846)(cid:1873)(cid:1870)(cid:1866)(cid:1867)(cid:1874)(cid:1857)(cid:1870) (cid:1844)(cid:1853)(cid:1872)(cid:1867)=(cid:1845)(cid:1853)(cid:1857)(cid:1871) (cid:4666)(cid:1867)(cid:1870) (cid:1841)(cid:1868)(cid:1857)(cid:1870)(cid:1853)(cid:1872)(cid:1866)(cid:1859)(cid:4667) (cid:1844)(cid:1857)(cid:1874)(cid:1857)(cid:1866)(cid:1873)(cid:1857)(cid:1871) (cid:1827)(cid:1874)(cid:1857)(cid:1870)(cid:1853)(cid:1859)(cid:1857) (cid:1846)(cid:1867)(cid:1872)(cid:1853) (cid:1827)(cid:1871)(cid:1871)(cid:1857)(cid:1872)(cid:1871) . For every of total assets, the company earns $[total asset turnover ratio] in revenue. The return on assets measures how much the company earned form the use of assets during the period. A high ratio suggest that a company is managing its assets efficiently.
