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5 Cards in this Set
- Front
- Back
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Profit margin |
Profit market = (profit / sales) x100 Percentage profit on top of each sale |
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Gross profit margin |
Gross profit = (sales - cost of goods sold) / sales % Indication of pricing strategy (markups) |
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Inventory turnover |
Inventory turnover = Cost of goods sold / average inventory 365 / inventory turnover = holding days E.g. inventory turns over X times a year and is on hand for approximately X/365 days |
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Debtors turnover |
Debtors turnover = sales / average accounts receivable Number of times during the period that debtors turn over i.e. Pay Higher is better |
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Average collection period |
= 365 / debtor turnover |
