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If you are studying accounting, you will often come across several accounting ratios. These are important part of the subject and they are useful for determining the financial stability of a firm or an organization. Efficiency ratio is an example of accounting ratio which is very critical for proper understanding of the subject. At myhomeworkhelp.com, we provide you a clear idea of efficiency ratios with our efficiency ratio assignment help service.
What is Efficiency Ratio?
The very basic definition of efficiency ratio would be a ratio that is generally used for analyzing how well a company internally uses its assets and liabilities. In other words, efficiency ratio measures the ability of a business to utilize its assets and liabilities for generating sales.
Efficiency ratios compare a set of assets to sales or cost of the sold goods in case of assets. On the other hand, in case of liabilities, payables are compared by efficiency ratios to total purchases. Being a very interesting topic, proper efficiency ratio homework help can be very helpful if you want to have a deep knowledge regarding the topic. Also, when you choose us, all your queries regarding your assignments or homework can be solved at one place.
Importance of Efficiency ratios
When you hire our efficiency ratio homework help service, you will get to know the usefulness of different efficiency ratios. These ratios prove to be meaningful when compared to peers in same industry. It can be used for identifying businesses that are better managed when compared to others. The very importance of efficiency ratios lies in the fact that improvement in the efficiency ratios generally means improved profitability.
Efficiency ratios can be used for calculating:
- Turnover of receivables
- Quantity and usage of equity
- Repayment of liabilities
- General use of machinery and inventory
As you can see, the topic can get a bit complex when you get into the details. This is why it is recommended to get proper efficiency ratio assignment help from our experts.
Efficiency ratios are used for judging the management of a business. High asset related ratio implies that the management team is efficient in using a minimum amount of assets in relation to a particular amount of sales. Similarly, if a liability related ratio is low, it means that the payables are being stretched, which also implies the effectiveness of management team. For further knowledge about the uses and importance of efficiency ratios, consider hiring an efficiency ratio assignment help service.
Which financial ratios are considered to be efficiency ratios?
As there are several accounting or financial ratios, only a few of them can be considered as efficiency ratio. When you seek efficiency ratio homework help from an expert, you will be properly guided through each type of efficiency ratios. An expert will let you know why a particular financial ratio is an efficiency ratio.
The following ratios are considered to be efficiency ratios:
- Accounts Receivable Turnover
- Inventory turnover
- Fixed Asset Turnover
- Accounts Payable turnover.
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