Ask a question from expert

Ask now

Asset Turnover Ratio - Doc

3 Pages943 Words169 Views
   

Added on  2021-06-17

Asset Turnover Ratio - Doc

   Added on 2021-06-17

BookmarkShareRelated Documents
The standards set for the salary and wages was 13.04%. In the year 2016-17, salary and wages was amounting to 12.7% whereas in the year 2017-18, the same was 10%. There was a declination in salary and wages by 2.7% due to increment in the total turnover. Due to the increment in the total revenue of pharmacy’s, the gross margin has decreased. The reason for the boost in the sales was mainly due to pharmacy swelling its team fellows (i.e. 2016-17 = $ 460, 769 and 2017-18 = $ 506, 846). The standards set for staff training was 0.9% and for the marketing expense it was 0.55%. In the year 2016-17, the ratio for staff training was 0.5% and for marketing expenses the ratio was 1.47% and in the year 2017-18, the ratio for staff training was 0.42% and for marketing expenses the ratio was 1.17%. Both the ratios have decreased in 2017-18. These ratios should be at least kept at the same level with that of the previous year (2016-17) because these are most significant constituents for the boost in the profit margins. The marketing expenses and the training of staff are the most important to the pharmacy business.Monetary PresentationAsset Turnover RatioThe asset turnover ratio was 2.78 which simply indicates that the turnover rise by $2.78, with the expenditure of $1 on asset. This means that the company is producing gains with the amount that has been invested in the asset. Gross margin returns on inventory investments The standards set for GMROII was 4.49. In 2016-17, the GMROII was 3.91% whereas in 2017-18, it was 3.65%. The method for the increment in GMROII is to reduce stock or to increase the profit. Operational EffectivenessInventory Turnover RatioThe standards set for Stock turnover ratio was 7.35 days. In 2016-17, the stock turnover ratio was 9.12 days whereas in 2017-18 the ratio was 14.59 days. This simply directs that stock management is very pitiable from the pharmacy. The reason for the unfortunate stock management is wholesale buying of stuffs at an economy price.Account Receivable Turnover RatioIn 2017-18, the account receivable turnover ratio is 5.57 which means average days for a customer to pay their debts is 65.6 days (365/5.57). This simply directs that the customer takes 66 days to pay off their debts which is not a best condition and it needs the consideration because it slows down the cash flows. Also an interest rate of 5% is charged if the debts not paid within 28 days from the transaction date.Monetary Firmness
Asset Turnover Ratio - Doc_1

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
RUNNING HEAD: ACCOUNTING AND FINANCIAL REPORTING ACCOUNTING AND FINANCIAL REPORTING 19 accounting and financial reporting Contents
|21
|2627
|208

Ratio Analysis for Walmart: Liquidity, Profitability, Asset and Debt Management
|6
|1346
|310

Financial Analysis of Kmart Corporation - ACCT6010 - Desklib
|9
|2161
|238

Assignment Intermediate Accounting
|6
|948
|238

Topic Financial Analysis of Company
|13
|1246
|65

RUNNING HEAD: FINANCE FOR BUSINESS Finance for business 7 Introduction Financial Statements
|7
|1116
|136