by Ekrem Duman | Jun 1, 2026 | Efficiency & Operations, KPIs & Metrics
⚡ TL;DRReceivables turnover measures how efficiently a company collects from customers: net credit sales divided by average accounts receivable. Its day form, days sales outstanding (DSO), shows the average days to collect an invoice. Low DSO means fast collection and...
by Ekrem Duman | Jun 1, 2026 | Efficiency & Operations, KPIs & Metrics
⚡ TL;DRInventory turnover measures how many times a company sells and replaces its inventory in a period: cost of goods sold divided by average inventory. A turnover of 8 means stock is sold and replenished eight times a year. High turnover signals efficient inventory...
by Ekrem Duman | Jun 1, 2026 | Efficiency & Operations, KPIs & Metrics
⚡ TL;DRAsset turnover measures how efficiently a company uses its assets to generate sales: revenue divided by average total assets. A ratio of 1.5 means every $1 of assets produces $1.50 of revenue. It reveals whether a business is asset-light and efficient or...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRThe interest coverage ratio measures how easily a company can pay the interest on its debt: EBIT divided by interest expense. A ratio of 5.0 means operating profit covers interest five times over. It is the frontline test of debt sustainability — a low or...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRThe debt-to-equity ratio measures financial leverage: total debt divided by shareholder equity. A ratio of 1.0 means the company is funded equally by borrowing and owner capital. Higher ratios amplify returns but raise the risk of distress; lower ratios are...
by Ekrem Duman | Jun 1, 2026 | KPIs & Metrics, Liquidity & Solvency
⚡ TL;DRWorking capital is current assets minus current liabilities — the cash tied up in day-to-day operations. Managing it means optimizing the cash conversion cycle: collecting receivables faster, turning inventory quicker, and timing payables wisely. Strong...
