Modified Calculation of Turnover Ratios Coefficients

Maria Tissen


Financial analysis is broadly used at the enterprises to determine the financial results and business activity. The stability of financial position of an enterprise in the condition of market economy is determined by the level of its business activity that depends from the sales market width, its business reputation, and degree of implementation of the plan on the main indicators of economic activity, the level of resource efficiency and sustainability of economic growth.

The business activity of an enterprise from the financial aspect appears, first of all in the speed of turnover ratios. The analysis of business activity is to study the levels and dynamics of various turnover ratios.

Purpose. The purpose of the paper is to study and to analyse the calculation methods of financial turnover ratios and to modify the calculations of ratios coefficient.

Methodology. The authors of the paper are using the international scientific literature and articles that help to study the authors of different financial analysis schools. The author uses both quantitative and qualitative methods of the economy, such as mathematical and statistical methods, analysis of ratios, logically constructive methods. Comparative analysis of the data and scientifically indicative method for modifying the calculation of financial coefficients is also to find in the paper.

Results. As a result the authors of the paper are offering their indicators group of enterprises financial activity to the users of financial analysis, after the analysis of different variations of calculation. The authors will consider the use of the average and absolute values as a base for calculations of financial business activity ratios. Due to multiple modernizations of enterprises financial statements, the authors will offer their own calculation of enterprises financial and turnover ratios coefficients, for consideration and approbation.

The theoretical contribution. The theoretical contribution by the authors is in financial ratio analysis – turnover of an enterprise. The authors sorted and compared the ratios, where the absolute and average values of the coefficient were taken as a basis.

Practical implications. The modified calculations of the turnover ratios of enterprises business activity will help the group of financial analysis users to calculate the most accurate ratios and effectively carry out the analysis of financial statement.

Keywords: turnover ratios, absolute average values, modified calculations of coefficients.

Paper type: research paper.



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