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EfficiencyRatios

Efficiencyratiosalsocalledactivityratiosmeasurehowwellcompaniesutilizetheirassetstogenerate
income.Efficiencyratiosoftenlookatthetimeittakescompaniestocollectcashfromcustomerorthetime
ittakescompaniestoconvertinventoryintocashinotherwords,makesales.Theseratiosareusedby
managementtohelpimprovethecompanyaswellasoutsideinvestorsandcreditorslookingatthe
operationsofprofitabilityofthecompany.

Efficiencyratiosgohandinhandwithprofitabilityratios.Mostoftenwhencompaniesareefficientwiththeir
resources,theybecomeprofitable.WalMartisagoodexample.WalMartisextremelygoodatsellinglow
marginproductsathighvolumes.Inotherwords,theyareefficientatturningtheirassets.Eventhoughthey
don'tmakemuchprofitpersale,theymakeatonofsales.Eachlittlesaleaddsup.

Herearethemostcommonefficiencyratiosinclude:

AccountsReceivableTurnover
WorkingCapitalRatio
AssetTurnoverRatio
TotalAssetTurnoverRatio
InventoryTurnover
Days'salesinInventory

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FinancialAccountingBasics
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AccountingPrinciples
AccountingCycle
FinancialStatements

FinancialRatios
ReceivablesTurnoverRatio
AssetTurnoverRatio
BreakEvenAnalysis
CashConversionCycle
CashRatio
CompoundAnnualGrowthRate
ContributionMargin
CostofGoodsSold
CurrentRatio
DaysSalesinInventory
DaysSalesOutstanding
DebtRatio
DebtServiceCoverageRatio
DebttoAsset
DebttoEquityRatio
DebttoIncome
DividendPayout
DividendYield
DuPontAnalysis
EarningsperShare
EBITDAMargin
EnterpriseValue
EquityMultiplier
EquityRatio
ExpenseRatio
FixedAssetTurnover
FixedChargeCoverageRatio
FreeCashFlow
GrossMarginRatio
GrossProfit
GrossvsNet
InterestCoverageRatio
InternalRateofReturn
InventoryTurnoverRatio
LoantoValue
MarginofSafety
MarginalRevenue
NetIncome
NetOperatingIncome
NetPresentValue
NetWorkingCapital
OperatingCashFlow
OperatingIncome
OperatingMarginRatio
PayablesTurnoverRatio
PaybackPeriod
PEGRatio
PresentValue
PriceEarningsP/ERatio
PricetoBook
ProfitMarginRatio
QuickRatioAcidTest
ResidualIncome
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RetentionRate
ReturnonAssets
ReturnonCapitalEmployed
ReturnonEquity
ReturnonInvestedCapital
ReturnonInvestment
ReturnonSales
Ruleof72
Sharpe
Sortino
TimesInterestEarnedRatio
TreynorRatio
WeightedAverageCostofCapital
WorkingCapitalRatio

Assets
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