Hi.

Welcome back in the previous dusk but looked at liquidity

ratios in this DOS.
We'll be looking at activity.
Voracious.
So what?
The activity.
Voracious measure as an organization's ability to convert
balance sheet items into cash or sales.
So they measure the efficiency off the business in managing
its assets.
So we'll start with an asset.
Terranova.
That's a turnover shows the ability off organization to
generate sales from the capital that him to employs.
The high pass Eternal war means the low return on sales and
vice versa.
So retailers generally have high ASA turnovers, accompaniment
by below margins and vice versa.
So formula here is revenue divided by known current
liabilities.
Blast total equity.
So we have already we have ordered calculated actually
something very similar that wasn't return on capital employed
but said its operating profit here, we'll use revenue that
will not use a percentage sign.
So that's calculate her BMW first.
No, this is revenue.
And for non current assets, girls would not have them here as
separate Klein, but once again use for a number of
liabilities for years.
But Lego to spine.
It's current liabilities well, that at equity that's from the
formula.
And for Anita on which balls the future into the same for
folks like in, if you haven't done so that stood once again
take the revenue.
But by no current liabilities, which is a current liabilities
minus, which is a total liabilities minus current liabilities.
Aunt, we add iniquity on furniture.
Uh, now we can just extend the formula.
Chris Decimal places, Aunt, let's do this Always happens so
you can work for some reason, okay?
Yeah. My hold keys.
Not working for some reason.
So what do the Yeah.
No, you don't need that.
So let's just calculated manually.
Much time was spent on this one.
I just do it like this, and great.
Ever see that the asset turnover is actually bigger for full
X five in So it has more turns.
But last margin.
Uh, now let's look at a receivable days.
Well, the four boys receivables divide, but credit seals on
dhe multiply that by 365 days.
So what it means is it basically means at how many t's the
company required to collect all the receivables on go
calculated for BMW and would have receivables here under
current assets.
on Dhe.
Let's look for it.
That's our total receivables.
Now we divide that by credit seals.
Well, so for credit sales weaken, Just take the Donald seals
and then minus the cash sales.
And then we'll have the credit sales.
But we can see that the company actually just not record the
cash sales.
So for this for this Onley example, we can skip on that.
And then we multiplied to 365 to see harmony days It takes.
But we can see that it takes 136 days.
Please post the VJ do the same for folks like him with.
So we do it once again to revenue.
No, Waas.
Think the ExxonMobil's Bleiberg raving you, aunt Once again,
we see that they did not actually report that.
So we could actually look at this by building a separate
schedule for that supporting schedule.
Look at their chunkier boards, but they're 200 page and will
not do that.
Now For our purposes, this will be sufficient.
We see that talks back and actually collects collected the
receivables foster and 2016 then a BMW.
So would you creates the decimal places like this that's now.
I hope this yeah, no works on past this and we see that
generally Volkswagen.
It's better on getting there payments on Now we calculate the
Invent Torri Days, and this is very similar to receivables.
So it measures how long a company carries in venturing before
it's sold.
The for a liquidy purpose Again, The shorter period is the
better as less cash get a started in men tary.
So let's do that.
That's calculated Notice the former lays in Venturi, divided
by coast of seal on Multiply it by 365 days.
So, inventor, we have under a balance sheet in the crowd
Assets Well, we have a total inventor here divided by a
course of seal.
This is here on Dhe Waterboy, by who?
Kind of 65.
We see that it's beauty.
Seven days kill the inventor is released of the away houses
on calculate the same for folks like So here's how we do it.
Take the inventory which is under the balance sheet.
No, too much.
Yeah, divide by coast of steel.
We don't need that.
But boy, by 365 on this is still how we again see that?
No, no, Weiss very said.
We actually see that BMW perform better.
Now. We can see that they perform better and every time, so
they're more efficient and selling the inventor.
So they're BMW cars?
Uh, no.
We can get the average.
Yeah, so on.
Let's now do the tables tables.
That's the same as for receivables.
But for people's, we measure how long it takes to pay out.
They're adept their short term steps.
So that's Babel's, divided by purchases or coast of seal.
Here we will be using the cost of sale because we don't
actually have purchased available this information available.
So let's divide the Babel's by sit coast of sale on what's
Blood by 365 moment and Babel's or count people is a
liability is a current liability and a customs seal that's
here. What's buoyed by 365?
So that's here.
Police bowls the video and do the same for Volkswagen.
Okay, so here is how it's done.
Well done, people.
Is the current liability.
Aunt. Bye bye.
Coast of seal.
Well, good bye.
Bye. 365.
I'm here.
No, let's quickly do this Rhyme.
Medic perfect aren't Let's go play this year.
Yeah, so there really there more or less the same.
And then one more thing that you are able to do.
We will not do that here.
Issue in some author suitable ZX case inventor, decent Babel
D's. And then the some will be something that's no one has
any kind accounting cycle or in accounting here for the
company.
So that's how long it takes for the company to do a full
cycle. Both this Oh, uh, buying their invent tary selling
their invent, Cherie, uh, bank getting their payment for the
century on paying back what they owe for that in victory.
Aunt. Now, well, to the grabs.
So police supposed to be doing to the grouses I've showed I
showed in the previous videos.
So here we can see here we can see all the two durations that
we have discussed on.
Also, for your curiosity, I've included the counting here.
So, as you see, for BMW, it had brooked in 2018 aunt for
Volkswagen's felon.
Then it's slightly decreased.
1019. So great in this task with covert activity ratios and
the next dusk, we're going to over our final set of rations
and those are sold into ratios.
Thank you.
See, in the next video.