These trends show that the inventory turnover has been constant so no worries there but if there is an increase in inventory turnover it means the company is losing sales or they are stocking up for a big sale. Lets look at previous years Inventory Turnover This means that the company turns over its inventory every 43.56 days. This means that the company turns over its inventory 8.38 times a year.ĭays Inventory Held : 365/8.38 = 43.56 days This shows how soon the company’s inventory is sold. Inventory Turnover = COGS / Average Inventory These trends show that the receivables turnover has remained the same with minimal variations, this means that the people are paying continuously and are not delaying their payments a lot. This means that the company converts its revenues to cash every 21.89 days This means that the company converts its revenues to cash 16.67 times a year.ĭays Receivables Outstanding : 365/16.67 = 21.89 days This measures how quick the companies sales turns to cash. Receivables Turnover = Revenues/Average Receivable It tells us if the company has enough current operational assets to pay off its current operational liabilities. * Working Capital = Accounts Receivables + Turnover(cash) - Accounts Payable Working Capital Turnover : Revenues/Average Working Capital Looking at these trends show the fixed asset turnover has reduced in the last couple of years, this may be indicative of the investments amazon is making in fixed assets eyeing future growth. Now let’s look at the previous years Fixed Asset Turnovers.

This means that for every one dollar of fixed assets amazon makes 3.77 dollars as revenues. It shows how efficiently a company manages its fixed assets to generate revenues.įixed Asset Turnover : 232.887/74.88215 = 3.77 This could also mean that amazon is investing in assets while eying long term growth, this reduces the total asset turnover in the short term.įixed Asset Turnover: = Revenues / Average Fixed Assets These trends show that the total asset turnover has declined over the past 4 years, this could mean that the asset is not being converted in to revenues. Lets look at the previous years Total Assets Turnover This means that for every one dollar of assets amazon makes 1.59 dollars as revenues. It shows how efficiently a company uses its assets to generate revenues. Total Assets Turnover : Revenues / Average Total Assets These ratios measure the companies ability to convert assets and liabilities into cash or sales.

Ar turnover ratio amazon