Entrepreneur especially pay attention on RATIOS following in order to have comprehensive observation
1/ Inventory Turnover Ratio
Whenever Entrepreneur calculates this ratio, entrepreneur should have a look at average revenue compares with other companies in the same industry, if your revenue is higher than the rest, it proves that you had gained good performance.
2/ Receivable Turnover Ratio
This ratio compares with other companies in the same industry, especially compares with competitors, if your revenue is higher than, it proves to gain good performance, in fact if it is too higher, means that you are too tight to lose selling to big potential big customers.
3/ Account Payable Turnover Ratio
This ratio needs to be compared with competitors, if it is higher than the overage industry, it shows good, in case it is higher than three times or more, it maybe you use financial leverage ratios ineffective.
4/ Cash Ratio or Asset can exchange cash to give payment
This ratio reflects ability of Entrepreneur gives payment on quick manner.
5/ Payment Ability Ratio
Measuring the capable of Entrepreneur pay debts and interests, in almost Investors have always look at this ratio to find out how long Entrepreneur stand to pay.
6/ Debt Devide Total Assets
It measures percentage of kind assets of is created by debt.
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