Activity ratio: Activity ratios measure the amount of resources invested in a company's collection and inventory management. A/R turnover 60.04 60.67 Days sales in receivable 61 days 60 days Operating cycle days 6.08 days 6.02 days Sales to assets ratio 6.64 6.74 Sales to Net Fixed Assets 19.59 20.21 Net Fixed Assets/Equity 4.34 4.85 Accounts Receivable Turnover This ratio measures the number of times receivables turn over in a year and reveals how successful a company is in collecting its outstanding receivables. A higher number is preferred because it indicates a shorter time between sales and cash collection. The accounts receivable turnover for Siddhi poly clinic pvt ltd is 60.04, which compared to the base year of 60.67 suggests this …show more content…
A lower number of days is preferable. The days sales in receivables for Siddhi poly clinic pvt ltd is 6.08 days that indicates the company is effective in collecting outstanding receivables. Operating Cycle Days This ratio calculates the total conversion period for a company, or in other words, the average number of days it takes to convert inventory into cash from sales. It is calculated by adding together the days cost of sales in inventory to the days sales in receivables.The operating cycle days for Siddhi poly clinic Pvt ltd is 6.08 days, which compared to the base year of 6.02 days indicates the company may not be successfully minimizing the amount of time it takes to convert products and services into cash. Sales to assets ratio: This ratio measures a company's ability to produce sales in relation to total assets to determine the effectiveness of the company's asset base in producing sales. A higher number is preferred, indicating that a company is using its assets to successfully generate sales. Sales to assets for Siddhi poly clinic pvt ltd is 6.64, which compared to the base year of 6.74 indicates the company's performance in this area is lacking and management should consider taking measures to improve this