Creditor Days measures the average number of days it takes a business to pay its suppliers who gave the business trade credit.
Posts tagged as “Efficiency Ratios”
Debtor Days measures the average number of days it takes a business to collect money from its customers who bought products on trade credit.
Stock Turnover shows the number of times a business sells its stock within one year, and the number of days it takes to sells all its stock.
Internal Users and External Users of Final Accounts will find Ratio Analysis of great help when making business decisions.
Different types of ratios are used to analyze information from Profit and Loss Account (P&L Account) and Balance Sheet to judge financial performance.
All business organizations need accounting systems. This makes finance one of four core business functions.