Professional Documents
Culture Documents
Harsh P Patel
ID No.14BBA027
Financial Accounting (BM322)
BBA + MBA Dual Degree Programme Sem 5
Indukaka Ipcowala Institute of Management (I2IM)
Charotar University of Science and Technology (CHARUSAT)
Avg . net
Net Sales
assets
This ratio is supposed to measure the efficiency with which fixed assets are employed. A high
ratio indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient
use of asset.
particulars
Ratio
Sep 30
2016
(billion)
3.30
Jun 30
2016
(billion)
3.34
3.35
3.3
3.3
3.23
3.25
3.18
3.2
3.15
3.11
3.1
3.05
3
2.95
jun 30 2016
march 31 2016
dec 31 2016
sep 30 2016
june 30 2015
Ratio
Interpretation: From this graph we can interpret that ratio of fixed assets of June 30 2015 is the
highest in comparison to others. A high ratio (3.34) indicates a high degree of efficiency in asset
utilization and a low ratio reflects inefficient use of asset that is (3.11) in June 30 2016
accounting year.
Due to detoriation in revenue of -8.24 % in the second quarter 2016 year on year.
Dean Foods Co's asset turnover ratio fell to 3.11 but remained above company
average.
For every Dollar on the Balance Sheet, Dean Foods Co relized $3.11 in annual
sales.
Within Consumer Non Cyclical sector 7 other companies have achieved higher
asset turnover ratio than Dean Foods Co.
While Asset turnover ratio total ranking has deteriorated compare to previous
quarter from to 107
Operating cycle refers the time between paying for goods supplied to you and the final
receipt of the cash to you from their sale. It is desirable to keep cycle short as possible as
it increase effectiveness of operating cycle.
Raw material
Cash
WIP
Sales Debtors/
Receivables
Finished
goods
If operating cycle is shorter it is good for the company it shows inventories are moving
though organization rapidly, trade receivables are being collected quickly, organization
taking maximum credit from supplier. It also indicates that company is less depend on
Helps in assessing and predicting the earning prospects and growth rates and to
the industry.
Extremely useful for the company in decision-making process
Helpful in identifying the weak and strength point of the company and also helpful in
forecasting, and planning for future.
References
http://csimarket.com/stocks/singleEfficiencyat.php?code=DF
http://amigobulls.com/stocks/DF