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Turnover ratios
Under Ratio Analysis
Turnover ratios like Fixed asset Turnover ratio, Working capital turnover ratio etc has to calculate with Net sale or Cost of good sold? Different- differnet books has been diifferent-different formauls. Is there any Statutory provision under any act define Formulas for ratio analysis please provide those.
Replies (4)
It shud be relating to Sales
As per my knowlege they should be calculated on net sales only!!!
Thnks for rply..
but mostly it is mention in book that is case of absence of cost of good sold net sale will consider for this ratio. if any accouning standard clear this please provide me.
Ther's no accounting standard as such for calculating the Turnover Ratios. However Sales means Sales less Excise duties & any other taxes that are recoverable from taxing authorities.
I dont know how COGS shud be considered for calculating the turnover ratios. As the turnover ratios are based on Sales as per P&L Account.
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