The resulting number is the current investment. The formula for the investment turnover ratio is to divide net sales by all stockholders equity and outstanding debt.
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Net sales stockholders equity debt outstanding investment turnover ratio.
Investment turnover formula accounting. The denominator includes average total assets. Sales text shareholders equity outstanding. Annual turnover formula total sales of the trading company or total production of a manufacturing company or total investments held by mutual funds exchange traded funds etc.
Average total assets are equal to total assets at the beginning of the period plus total assets at the ending of the period divided by two. The numerator includes net sales i e sales less sales returns and discount. For outstanding debt you can sum up all of the short and long term debt of the company.
Assets turnover ratio is computed by using the following formula. It is a straightforward term which includes the following. Debt net sales can be found on the income statement and shareholders equity on the balance sheet.
You can calculate the investment turnover ratio of a company by dividing the net sales value by the sum of shareholder equity and outstanding debt. Investment turnover ratio formula investment. Capital turnover is the measure that indicates organization s efficiency in relation to the utilization of capital employed in the business and it is calculated as a ratio of total annual turnover divided by the total amount of stockholder s equity also known as net worth and the higher the ratio the better is the utilization of capital employed.
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