Advice 1: How to calculate receivables turnover

One of the indicators of analysis of the financial condition of the organization is the accounts receivable turnover. Accounts receivable turnover characterizes the average period of time during which the funds from the buyers come at the expense of the organization. To calculate this figure, do the following.
How to calculate receivables turnover
You will need
  • - The balance sheet and statement of profit and loss for the period;
  • formula to calculate accounts receivable turnover:
  • Accounts receivable turnover (times) = (Revenue from sales)/(Average accounts receivable);
  • - formula to calculate average accounts receivable:
  • Average accounts receivable = (accounts Receivable at beginning of the period + accounts Receivable period-end )/2;
  • formula to calculate accounts receivable turnover in days:
  • Accounts receivable turnover(days) = ((Average accounts receivable)/(sales for period))* number of days of the reporting period.
Instruction
1
Calculate the amount of receivables average of debt for the analyzed period. Take the data on the outstanding debt at the beginning and at the end of the period from the balance sheet during the reporting period. Add these two numbers and divide by 2. So you will calculate the average amount of receivables debt.
2
Divide the revenue over the period in the amount of the average receivables debt. Data on the amount of revenue you take in the statement of profit and loss during the reporting period. Dividing the amount of revenue in the amount of receivables average of debt, you will find the turnover of accounts receivable debt in rpm. Count the number of days in the analyzed period. Multiply the resulting ratio accounts payable turnover debt to turnover by the number of days in the analyzed period. So you calculate the turnover of receivables of debt in days.
3
Calculate the turnover of receivables and debts for the previous accounting period. Compare and analyze the obtained figures. If this indicator tends to decrease, it means that the faster customers pay their bills, and the solvency of the organization improves.
Note
There is no exact standard for the measure of receivables turnover. In every industry it's different. But in any case, the less the number of days of receivables turnover, the better (this means that the debtors actively return their debts of your organization).

Advice 2: How to calculate turnover

The turnover ratios are the efficiency ratios of the company. They expect economic services and credit institutions to assess the effectiveness of the use of the entity's existing assets. In this case, often counting five main factors of turnover.
How to calculate turnover
Instruction
1
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.
2
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.
3
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.
4
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.
5
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.

Advice 3: How to calculate turnover

The rate of turnover is one of the most important places among the economic indicators for assessing the success and effectiveness of any enterprise. They are calculated as an internal services organization to control and external evaluators, for example, banks, while analyzing the creditworthiness of the company.
How to calculate turnover
Instruction
1
To calculate turnover, you will need the data of the two main documents reflecting the financial activity of the company:
• The balance of the organization, from which you will take the value of specific assets;
• Statement of profit and loss (OPI), which shows the revenue and cost of sales.
2
When talking about the need to calculate the turnover, imply the importance of evaluating how efficiently a company uses its existing assets, commodities and other assets. Used every asset contributes to the ultimate revenue and to estimate this contribution using the turnover ratio. The most often counting five types of coefficients:
turnover assets of the enterprise;
turnover of inventory;
the turnover of payables and receivables;
turnover of fixed assets of the company.
3
To calculate turnover of a company's assets, divide the proceeds from OPI in the amount of the asset balance. You will see how much money in the final revenue brought by each unit of assets.
4
To calculate the turnover of inventory, divide the cost of goods sold from OPI on the value of inventories, taken from the balance.
5
To calculate the turnover of receivables, will split the proceeds from OPIE on the value of the receivables, taken from the company's balance sheet.
6
To calculate the turnover of accounts payable, divide the cost of goods sold (OPI) on the amount payable (balance).
7
To calculate the turnover of fixed assets of the company, will split the proceeds from OPIE on the value of fixed assets indicated in the balance sheet of the organization.

Advice 4: How to increase the turnover

Before each economic entity, be it a Bank, company or individual entrepreneur, the problem of turnover of working capital is quite acute. After all, how effectively and quickly carried out their cycle, depends on the profitability of production activities.
How to increase the turnover
Instruction
1
In order to increase turnover, you need to pay attention to two factors: the volume of trade and size of working capital. To increase the turnover should improve merchandising and to normalize the distribution of working capital. This requires shorter intervals between deliveries, to reduce the intensity of production, to establish progressive norms of material consumption, to buy them in smaller batches to avoid deposits, reduce the cost of transportation of goods, to improve the organization of storage facilities, to eliminate unnecessary stocks.
2
In order to avoid large stocks of finished goods in the warehouse, and often it is because of this slowed turnover, it is necessary to plan the production in accordance with the signed agreements, to comply with the terms of production, strengthen the promotion of products on the market, reduce the cost of production, ie, active use of marketing solutions.
3
Large balances on hand and in transit often occur as a result of irregular development of retail trade, violations of cash discipline: irregular delivery of revenue to the Bank, the storage of large balances unclaimed cash at the box office, etc.
4
Remains of other commodity-material values are the result of the purchase or production of unwanted materials, fuel, raw materials. Reduce their stocks is possible if to provide wholesale distribution, uniform and frequent delivery. To normalize the rest of the money in the cashier, you should develop the retail trade.
5
With regard to funds in Bank accounts, it is also necessary to monitor their residues. All available funds and better transfer to repay loans, invest deposits, securities, lending to legal entities and individuals. Accelerate the turnover would release significant amounts of production, and hence increase its volume without additional financial investments.
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