You are on page 1of 1

Asset management ratio is ratios that measure how effectively a company in managing its assets.

Ratios that used to measure Company’s effectiveness in managing its assets are: a) Inventory turnover ratio Inventory turnover ratio can be deriving from company’s sales divide by its inventories. AZRB’s inventory turnover ratio has been decrease from .!" in !#$# to %&.'% in

!#$$ and further down to " .#" in !#$!. (his indicates that AZRB has held an increasing number of inventories as compared to its annual sales but it’s still better since AZRB manage to restoc) its inventories " .#" times a year. b) Days sales outstanding (DSO) *+, used to appraise company’s account receivable and indicates the length of time the company must wait after ma)ing a sale before receiving cash. It is found by dividing company’s receivables to its annual sales. AZRB manage to reduce its *+, from !'- days in !#$# to !#- days in !#$$ and only $' days in !#$!. (his indicates that AZRB manage to revise its credit policy and able to collect its receivable in a short period of time.