Microsoft Office Tutorials and References

In Depth Information

**Important Tools for Any Business**

Days Inventory

Days Inventor y shows a ratio indicating how many days a business could continue selling

using only its existing inventor y as of the report date.

Net Sales to Inventory

Net Sales to Inventor y shows the size of annual net sales relative to inventor y for the period,

on an annualized basis.

Days Purchases in AP

Days Purchases in AP indicates the size of the accounts payable relative to cost of sales for

the period.

Net Sales to Working Capital

Net Sales to Working Capital indicates the size of annual net sales relative to working capital

for the period on an annualized basis.

Total Assets to Net Sales

Total Assets to Net Sales shows how many dollars of assets are required to produce a dollar

of sales for the period on an annualized basis.

Net Sales to AR

Net Sales to AR indicates the size of annual net sales relative to accounts receivable for the

period on an annualized basis.

Net Sales to Net Fixed Assets

(Net Sales*Days in Year)/(Fixed Assets*Days in Period)

Net Sales to Net Fixed Assets shows the size of the annual net sales relative to the net fixed

assets for the period on an annualized basis.

Net Sales to Total Assets

Net Sales to Total Assets shows the size of the annual net sales relative to total assets for the

period on an annualized basis.

Net Sales to Net Worth

Net Sales to New Worth shows the size of the net sales relative to net worth (Total Assets

minus Total Liabilities) for the period on an annualized basis.

Amortization and Depreciation Expense to Net Sales

Amortization and Depreciation Expense to Net Sales indicates what percentage of each dollar

of sales pays noncash expenses, such as amortization expense of intangible assets such as

copyrights and patents and depreciation expense of fixed assets for the period.

Gross Profit Percentage

Gross Profit Percentage indicates what percentage of each dollar of sales is left over after

paying the cost of sales amount for the period.