Financial Ratios

Activity or Efficiency Ratios

Measure how effectively an organization is using its resources. They provide another way of evaluating liquidity and have the advantage of using averages over time instead of measures at a single given date (as occurs in Liquidity Ratios).

• Accounts Receivable Turnover
• Average Collection Period
• Inventory Turnover
• Working Capital Turnover
• Total Asset Turnover
• Net Cash Flow to Current Liabilities

A ratio is a relationship of one amount to another. Evaluate the financial strength or weakness of your Company and its operating trends utilizing ratios. Ratios on their own may not mean much; use them to compare one periods of activity, or to compare your organization's ratios to industry standards or its major competitor.