Efficiency Ratios Calculator

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Efficiency ratios measure how effectively a company utilizes its assets and manages its operations to generate revenue and maximize productivity. More info →

Input

Enter financial information to calculate efficiency ratios.

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How This Calculator Works

Efficiency ratios show how hard a company's assets work. Turnover ratios count how many times a year something is used up or collected; "days" ratios turn that into how long it takes. Together they give the cash conversion cycle: the number of days between paying for stock and getting paid by customers.

The Formulas

Asset Turnover = Sales ÷ Total Assets
Receivable Turnover = Sales ÷ Receivables · Receivable Days = Receivables ÷ Sales × 365
Inventory Turnover = COGS ÷ Inventory · Inventory Days = Inventory ÷ COGS × 365
Payable Turnover = COGS ÷ Payables · Payable Days = Payables ÷ COGS × 365

Cash Conversion Cycle = Receivable Days + Inventory Days − Payable Days

What Each Input Does

Sales: Yearly revenue, used for asset and receivable ratios.
Cost of Goods Sold: Yearly cost of sales, used for inventory and payable ratios.
Total Assets: Everything the company owns.
Receivables / Payables / Inventory: Money owed by customers, money owed to suppliers, and stock on hand.

Step by Step

Turnover ratios are worked out and shown to 2 decimals.
Days ratios use a 365-day year and are shown in whole days.
The cash conversion cycle is receivable days + inventory days − payable days.

Reading the Result

Cycle below 60 days – efficient; negative means customers pay before suppliers are paid.

60 to below 120 days – moderate.

120 days or more – cash is tied up for a long time.

Quick Example

Sales 1,000,000, COGS 600,000, assets 800,000, receivables 125,000, payables 75,000, inventory 100,000. Asset turnover 1.25x, receivable and payable turnover 8.00x, inventory turnover 6.00x. Receivable days 46, inventory days 61, payable days 46, so the cash conversion cycle is 61 days (moderate).