Turnover Ratios

Definition: The Turnover Ratios measure the efficiency of investments made by the firm in the form of revenues and the cost of sale generated during a period of time. These ratios show the relationship between the revenues or cost of sales generated due to the investment activities undertaken.

Some important Turnover Ratios are:

turnover ratios-final

  1. Inventory Turnover Ratio
  2. Debtors Turnover Ratio
  3. Average Collection period
  4. Fixed Asset Turnover Ratio
  5. Total Assets Turnover Ratio
  6. Capital Employed Turnover Ratio

The turnover ratios are also called as activity ratios or asset management ratios; that shows a relationship between sales and assets. These ratios are expressed in terms of integers or times.

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