Days sales outstanding, also known as average collection period, measures the number of days it takes for a company to collect its accounts receivable from its clients. The collection of receivables is commonly carried out by the billing department and this metric is a particularly important one to determine that department’s efficiency. On the other
The days sales in inventory is a measure that tracks how many days of sales the current inventory level can sustain. This metric provides a valuable insight for the management team to forecast many different variables related to the supply chain of the company including how much raw materials need to be purchased, how many
The cash flow coverage ratio measures the percentage of a business total liabilities, commonly long term, that are covered by its annual operating cash flow. This metric can also indicate how many years it will take the company to cover for its entire debt if it could sustain the current cash flow situation. What is
Cash Earnings Per Share (EPS) is a metric that reflects how much operating cash flow a company has generated in a given period of time per each outstanding share it has. It is essentially a similar calculation to the more popular Earnings Per Share, yet, the net income is adjusted for changes in working capital,
The accumulated depreciation ratio refers to the portion of the value of total gross fixed assets that have already been covered by depreciation charges. The accumulated depreciation is the aggregate amount of depreciation charges made to the income statement, which reduce the historical value of fixed assets in the balance sheet. What is the Accumulated
The account receivables turnover ratio is a metric employed to determine how effective a company is to collect the money owed by its clients. The timely collection of receivables is crucial to maintain a healthy cash flow. If a company is unable to collect the money it is owed, it will quickly face financial challenges