Five Measures of Financial Efficiency

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What does it mean to be financially efficient? Companies with a high degree of financial efficiency require fewer assets, reducing the use of cash and limiting borrowing needs. Being financially efficient also means releasing cash quickly from inventory and through collections of accounts receivable, creating repayment sources that enhance creditworthiness.

Download this paper to find out about the five measures of financial efficiency:

  1. Total assets turnover.
  2. Net fixed assets turnover.
  3. Accounts receivable days.
  4. Inventory days on hand.
  5. Accounts payable days.

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