How to calculate turnover

To calculate the turnover of assets, divide net profit for the period at the end of the asset balance. The meaning of this factor is simple: the value obtained will show how many times a period is a full cycle of the turnover of all assets. Also it is calculated to see how much money is brought in each unit of assets.

The turnover ratio of inventories – inventory (goods, products) - reflects the speed of implementation of these resources. To calculate the turnover of inventory is possible by dividing the cost of goods sold on the average annual value of inventories. For the transfer coefficient in days divide the number of days in the period on the indicator. Than this ratio the higher the better, because it directly reflects the liquidity of the TMZ company.

Turnover ratio of accounts receivable the debt of the company indicates how many times receivables are turned into real money in the intervening period. To calculate turnover, divide net profit by the amount of receivables.

To calculate the turnover of accounts payable, divide cost of sales by the amount of the debt. Both the turnover rate of debt can be calculated in days. To do this, divide the number of days in the period on the indicator. Thereby you will see how many days it takes the company to pay the receivables or the repayment of debts.

Turnover ratio of fixed assets shows the level of investments in fixed assets and number of funds, which brings each unit of funds. To calculate the turnover of fixed assets, divide the net profit on average for the period value of fixed assets.