Efficiency ratios reveal how efficient a company is using liabilities/ assets to generate revenue for the business. For this part Sainsbury’s figures have been compared with its main rivals in the UK grocery market: Tesco and Morrison.
Ratios such Sales to Inventory could be used to determine the efficiency of the business compared with competitors.
It appears that Sainsbury’s and Morrison have a good control over its stock levels, as the companies are able to turn over its inventory at a faster pace, which will be important in the grocery industry to reduce waste.
Receivable collection period or days sales outstanding are used to evaluate how long customers are taking to pay a company. A low figure is considered best, since it means that
Ratios such Sales to Inventory could be used to determine the efficiency of the business compared with competitors.
It appears that Sainsbury’s and Morrison have a good control over its stock levels, as the companies are able to turn over its inventory at a faster pace, which will be important in the grocery industry to reduce waste.
Receivable collection period or days sales outstanding are used to evaluate how long customers are taking to pay a company. A low figure is considered best, since it means that