Liquidity Ratios – Current Ratio and Quick Ratio (Acid Test Ratio) | asset turnover ratio

Liquidity Ratios – Current Ratio and Quick Ratio (Acid Test Ratio)

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This finance video tutorial provides a basic introduction into two liquidity ratios the current ratio and the quick ratio also known as the acid test ratio. The current ratio is equal to the current assets divided by the current liabilities. A current ratio that is greater than 1 means that the current assets are greater in value than the current liabilities. The quick ratio is equal to a company’s liquid assets divided by its current liabilities.
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Liquidity Ratios - Current Ratio and Quick Ratio (Acid Test Ratio)

Asset Turnover Ratio- Meaning, Formula, Calculation \u0026 Interpretations

This tutorial will cover the concept of Asset Turnover Ratio from the ground up, including its formula and stepbystep calculations. Following that, we will use the Colgate Case Study to calculate the Asset Turnover Ratio in excel and interpret the results.
You can download the Colgate Asset Turnover Ratio template from this link
What is Asset Turnover Ratio?

The Asset Turnover Ratio measures how much revenue a company generates based on its total assets. This ratio helps determine whether the company is generating sufficient revenues to justify holding a large amount of assets on its balance sheet.

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Asset Turnover Ratio Formula = Net Sales / Average Total Assets
Interpretation of Asset Turnover Ratio

If the asset turnover ratio is less than one, the company is in trouble since its total assets are unable to generate enough revenue at the end of the year. However, this is based on a presumption. For example, the asset turnover of the industry in which the firm operates is less than 0.5, while this company’s ratio is 0.9, then despite its lower asset turnover, this company is performing well.
If the asset turnover ratio is greater than one, it is always a favorable sign. Because this indicates that the company is selfsufficient in terms of revenue. There is, however, an exception. A company in the retail industry, for example, will have fewer total assets. As a result, most organization’s average ratio is always more than 2 in this industry. In this situation, a 1.5 asset turnover indicates that the company isn’t doing well.
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Asset Turnover Ratio- Meaning, Formula, Calculation \u0026 Interpretations

Inventory Turnover Ratio Formula | Calculation | Excel

In this video on Inventory Turnover Ratio Formula, we are going to understand how this formula works and how it is calculated along with some examples.
𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨

This is an important efficiency ratio. It precepts how speedily a company changes a current batch of inventories and transforms the inventories into sales.

𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚

𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝑻𝒖𝒓𝒏𝒐𝒗𝒆𝒓 𝑹𝒂𝒕𝒊𝒐 = 𝑪𝒐𝒔𝒕 𝒐𝒇 𝒈𝒐𝒐𝒅𝒔 / 𝑨𝒗𝒆𝒓𝒂𝒈𝒆 𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒊𝒆𝒔

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𝐄𝐱𝐚𝐦𝐩𝐥𝐞 𝐨𝐟 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 𝐅𝐨𝐫𝐦𝐮𝐥𝐚

CNB Group Inc. has the following information –
Cost of Goods Sold – $800,000
The beginning inventory – $130,000
The ending inventory – $150,000
We need to find out the inventory ratios using the formula.
First, we will find out the average inventory of CNB Group
=(Beginning Inventory + the Ending Inventory)/2
= ($130,000 + $150,000)/2
= 140000
Now with the help of inventory ratio formula, we get
= Inventory ratio = Cost of Goods Sold / Average Inventories
= $800,000 / $140,000
Inventory ratio =6
To know more about the 𝗜𝗻𝘃𝗲𝗻𝘁𝗼𝗿𝘆 𝗧𝘂𝗿𝗻𝗼𝘃𝗲𝗿 𝗥𝗮𝘁𝗶𝗼 𝗙𝗼𝗿𝗺𝘂𝗹𝗮, you can go to this 𝐥𝐢𝐧𝐤 𝐡𝐞𝐫𝐞:
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Inventory Turnover Ratio Formula | Calculation | Excel

Most Important Financial Ratio | DuPont Analysis of Return on Equity (RoE) | With CASE STUDIES

In this video, we talk about Most Important Financial Ratio as per legendary investors like Warren Buffet, Charlie Munger, Terry Smith and Saurabh Mukherjea (@Marcellus Investment Managers). Not only we talk about how Return On Equity (RoE) is related to operations of a business, but I also share its derivation from scratch.
In this video I simplified DuPont Anlaysis, and how can we apply the learnings from DuPont Analysis of Return on Equity (RoE) to real life business and make money as investors. I take examples of Berger Paints, APL Apollo and Laurus Labs to show the impact of movement of different levers of RoE over time and corresponding stock market returns.
0:00 Intro
1:07 How is RoE linked to Business Operations?
5:10 Derivation of RoE Formula (DuPont Anlaysis)
6:35 Ideal Scenario for RoE (Demand Side Moat + Supply Side Moat)
8:15 3 Real Life Case Studies (Berger Paints, APL Apollo, Laurus Labs)
14:29 Key Takeaways
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Most Important Financial Ratio | DuPont Analysis of Return on Equity (RoE) | With CASE STUDIES

Financial Ratios Asset Management

Part three of a multipart example on how to calculate basic financial ratios. This part focuses on asset management ratios inventory turnover, days sales outstanding, fixed asset turnover, and total asset turnover.

Financial Ratios Asset Management

นอกจากการดูหัวข้อนี้แล้ว คุณยังสามารถเข้าถึงบทวิจารณ์ดีๆ อื่นๆ อีกมากมายได้ที่นี่: ดูวิธีอื่นๆMẸO HAY

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