Explain what each of the following is intended to measure: a. Return on capital employed; b. Profit
Question:
a. Return on capital employed;
b. Profit margin;
c. Asset-turnover ratio;
d. Working capital and liquidity ratios;
e. Average period of credit taken by trade receivables;
f. Inventory turnover ratio.
Inventory Turnover Ratio
Inventory Turnover RatioThe inventory turnover ratio is a ratio of cost of goods sold to its average inventory. It is measured in times with respect to the cost of goods sold in a year normally. Inventory Turnover Ratio FormulaWhere,...
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a The return on capital employed is a measure of profitability that is used to indicate how efficiently and effectively a company has utilized its ass...View the full answer
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Related Book For 
Introduction To Financial Accounting
ISBN: 978-0077138448
7th edition
Authors: Anne Marie Ward, Andrew Thomas
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