Additional question 16 solution
| Sage | One Saturday | The Hilton Group | Paddy Power plc | Fox Kids Europe | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2001 | 2000 | 2001 | 2000 | 2001 | 2000 | 2000 | 1999 | 2001 | 2000 | |
| Total Asset Turnover | 0.47 | 0.56 | 12.03 | 3.62 | 0.82 | 0.84 | 0.05 | 0.47 | 0.44 | 0.37 |
| Stock Turnover | 16.61 | 21.10 | 0.00 | 1.46 | 2.40 | 2.61 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debtors' Turnover | 71.81 | 75.60 | 20.64 | 34.60 | 35.15 | 32.73 | 390.19 | 199.91 | 153.71 | 124.21 |
| Creditors' Turnover | 996.33 | 933.80 | 320.20 | 213.42 | 101.29 | 92.55 | 6198.90 | n/a | 829.56 | 497.32 |
As we would expect when we put together sets of ratios from a wide range of industries, we can see a wide range of ratio values.
With the exception of One Saturday, (a dating agency,) asset turnover is poor for all businesses. Stock turnover rates for three of the businesses are zero. Can you say why this should be the case? Debtors' turnover and creditors' turnover ratios are all very high ... what else should we do to find the true values for these two sets of ratios?
Well, we ought to know the answers to all of these questions now; and we have worked through this exercise to try to encourage you to realise that to get to the full truth, we need to look at accounting data very carefully and critically. Secondly, we really need to appreciate that different businesses and different industries all behave in different ways: the table above helps to prove that.
Back to Additional question 16.
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