In order to judge the performance of the business operations, an entity needs some type of measurement criteria and one of them is the Operating performance ratio. It is further classified into:
Operating cycle is the time required to purchase the goods, sell the goods & collect payments from customers. It is an efficiency ratio and can do wonders if corrective actions are taken to improve this ratio. Short operating cycle is…
The working capital turnover ratio is calculated to get an idea of how the company is using its working capital to generate sales or revenue. It is an important activity ratio that looks at the short-term performance of the company.…
Working capital is the backbone of any company. It should be kept in positive to allow the business to continue as a going concern. Actually, it can be calculated by subtracting the current liabilities from the current assets of the…