Efficiency Ratios

Efficiency Ratios The teachableness relative is an indicator of how well-mannered-mannered Johnson and Johnson (J&J) is run on an formal-wide premise. Teachableness relatives are besides defined as asset turnover relatives (Finkler, Kovner & Jones, 2007). The asset turnover relative measures how fertile J&J is in managing all of its proceeds to beget sales. This teachableness relative is conducive by dividing sales by aggregate proceeds by aggregate enrichment. For year. 2010, J&J had an asset turnover of 0. 6. Comparing J&J’s asset relative to the activity, it is the corresponding (Key Financial Ratios: Financial Results - Johnson & Johnson, 2011). Thus J&J is as fertile in the use of its proceeds as its healthcare competitors in the activity. Revenue to proceeds = Aggregate enrichment. Aggregate proceeds. Total enrichment of $61,587. 0= 0. 598 or 0. 6 Asset turnover Aggregate proceeds $102,908. 0. The days' receivables relative is conducive by dividing the accounts receivable by the enrichment per day. The days' receivables obtain betoken how covet, on middle, it takes for J&J to garner on its sales to customers on merit. This relative is besides notorious as the middle garnerion end (ACP). The limiteder the garnerion end, the foregoing the form can pay bills or endow to achieve profit (Finkler, Kovner & Jones, 2007). A limited ACP is past fertile for the form. J&J had an ACP of 58 days in 2010. This is a neglect acception from the former year’s ACP of 57 days. Revenue per day = Aggregate enrichment 365$61,857. 0 = $168. 731 365 days. Day’s receivable = Accounts receivable Revenue per day AR $9774. 0 = 57. 92 days DR $168. 731/day|. Reference Key financial relatives: financial results - johnson & johnson. (2011). Retrieved from http://moneycentral. msn. com/investor/invsub/results/compare. asp?Page=ManagementEfficiency&symbol=JNJ