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Chapter 6 Activity Ratios - Coggle Diagram
Chapter 6 Activity Ratios
inventory turnover ratio
purpose
inventory mgt
efficient
control
inv in stock
high
obsolete inventory
low
business opportunity lost
no of times
COS / inventory
receivables day
TR / sales * 365 days
purpose
velocity of debt collection
payables days
high
paid promptly
low
credit facilities
purpose
enhance credit worthiness
TP / COS, purchases
