Consider the factors that contribute to this ongoing success story. It is a gateway to a market that can be characterized as: Political And Economic Stability: Dubai is part of the UAE which is a low-crime and politically-stable country.
It is the role of the management to ensure such objectives are attained, and hence must gather sufficient data to inform them how the business is doing. Ratio analysis helps them detect strengths and weaknesses of various initiatives and strategies.
For example, a quick acid ratio, which measures whether the company has sufficient liquid assets to meet its immediate liabilities, can provide a warning before its debts spiral out of control. Classification of Financial Ratios Ratios can be grouped into profitability ratios, liquidity ratios, leverage gearing ratios and efficiency ratios, with the former being the focus of this article.
You can learn more about the efficiency ratios in this course, which may further expand your knowledge of them. The qualities of ratios are; They must be calculated regularly from time to time The must be based on accurate and reliable financial information They must be viewed both as an indicator of wide issues and trends in the long-run and also at a particular point in time.
Too low accounts receivable turnover may show that your company is either finding it hard to collect debts from customers or that it is granting credit too easily.
All factors being equal, a high accounts turnover is recommended. If the figure is too low, it means that you are overbuilding or overstocking the inventory, or that you are having problems pushing sales to consumers.
Hence, the higher the inventory turnover, the better your inventory management policy is. Accounts Payable Turnover This ratio measures whether the company has sufficient resources to pay its immediate bills.
Total Assets Turnover The total asset turnover shows how efficiently you are using both long-term and short-term assets. An ideal figure is a high total asset turnover. A total assets turnover ratio of 4 means that for each dollar of total assets, the business earns 4 dollars in revenue.
Fixed Asset Turnover This ratio is similar to the total asset turnover, though there are some differences. The higher the figure, the better as it indicates the amount of money held in the fixed assets is lower per dollar of sales revenue.
If the ratio is low, it indicates that the company has invested too much on fixed assets. Operating Expense Ratio This ratio measures the cost of operating a property against the income it brings. It helps compare expenses between analogous properties. If a property has a high operating expense ratio, it is a signal that corrective measures must be taken to rein the costs.
Expenses that can be used in computing this ratio vary, with the common ones being insurance, taxes, maintenance and utilities against the gross income. A sum of expenses can also be computed against the total income, something you will learn how to interpret by studying for this course on ratios.
Return on Investment The return on net profit calculates the efficiency with which the net worth generates net profit. It computes the number of dollars in net profit generated for each dollar invested in net worth.
It helps the company manage its cash flows so that it can meet its current obligations as they fall due. So an average collection period of 20 days means the business must wait for 30 days before the debtor can pay up.
Average Payment Period This ratio calculates the average number of days the business takes to pay its trade debts. Therefore, an accounts turnover ratio of 25 means the company on averages settles its accounts payable within 25 days. As such, the efficiency ratios may be lower, though this is not the case.
Different Accounting Practices-Different firms use varying accounting practices, meaning you should exercise discretion when using the efficiency ratios. Most giant companies, or conglomerates, operate in different business sectors.
This means it is hard to obtain solid data for cross-comparison.To advance evaluation methods in this area, a National Social Determinants of Health Commission 4 was created in Brazil to gather further scientific evidence on what types of integrated actions improve health equity in the country.
A country that utilizes both types of economic systems has a mixed market economy. In a socialist economy, people have some freedom of choice regarding how they use the factors of production. Economic performance is key to the health and competitiveness of the US food system. Such performance involves the productivity, efficiency, and costs of agricultural producers, food processors, and fishermen.
Appropriate measurement and analysis of these aspects of performance are therefore crucial for enhancing our understanding of performance patterns and determinants, and of the . business, and consumer loan portfolios. This paper complements this literature by Secondly, we focus on the U.S.
banking system as the economic crisis in study () was initially caused by factors in the U.S.
banking industry. Bank specific determinants The performance of loans cannot be solely determined by macroeconomic. Determinants of firm performance and growth during economic recession: The case of Central and Eastern European countries.
London School of Economics and Political Science, Centre for Economic Performance, London () Dall’Olio et al., Determinants of Business Model Performance in Software Firms A A interest among information system (IS) scholars and business practitioners alike.
understanding of the complex relationships among business model determinants, business model type, and firm performance. The results add to the resource-based.