Asked by: Williams Montehermoso
asked in category: General Last Updated: 11th January, 2020

What is a good sales revenue to capital employed ratio?

Definition: Sales to Capital Employed Ratio is used to measure the firm's ability to generate sales revenue by utilizing its assets. A higher ratio is preferable to lower one (retail companies such as supermarkets tend to have higher ratios). Formula: Sales to Capital Employed Ratio = (Sales / Capital Employed ) * 100%

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Also, what is a good working capital to sales ratio?

The calculation of its working capital turnover ratio is $12,000,000 / $2,000,000 = 6. In contrast, a low ratio may indicate that a business is investing in too many accounts receivable and inventory to support its sales, which could lead to an excessive amount of bad debts or obsolete inventory.

Likewise, what is a good return on capital employed ratio? Determine the benchmark ROCE of the industry. For example, a company with a ROCE of 20% may look good compared to a company with a ROCE of 10%. However, if the industry benchmark is 35%, both companies are considered to have a poor ROCE.

Simply so, how do you calculate sales to capital ratio?

Ratios that are higher than the industry average are desirable.

  1. Calculation. Sales to Working Capital = Net Sales / (Accounts Receivable + Inventory - Accounts Payable)
  2. Explanation. Asset utilization measures allow investors to understand how well a company uses its assets in operations.
  3. Example.
  4. Related Terms.

How do you calculate employee revenue ratio?

Revenue Per Employee. Revenue per employee (also called sales per employee) is a financial ratio that measures the revenue generated by each employee of the company on average. It equals the company's total revenue divided by the average number of employees for the period.

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