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Inventory Turnover The inventory turnover ratio measures the number of times on average the inventory was sold during the period. The purpose of this ratio is to measure the liquidity of the inventory. The inventory turnover for Home Depot is 4.889, which means that the inventory turnover is approximately 75 days. The ratio for Ace Hardware is 6.739, which indicates that the inventory turnover is approximately 54 days. Accounts Receivable Turnover The accounts receivable turnover ratio measures the number of times, on average, receivables are collected during the period. The purpose of this ratio is to measure the liquidity of the receivables. The accounts receivable turnover ratio for Home Depot is 54.776, which states that the receivables are approximately collected after a period of 6 days. This information shows that Home Depot is very successful in collecting its receivables. The turnover ratio for Ace Hardware is 7.86. This means that there receivables are collected after a period of 46 days, which isn't nearly as good as Home Depot. Price Earnings Ratio The price earnings ratio measures the ratio of the market price pershare to earnings per share. Home Depot has a current price earnings ratio of 36.5%. Ace Hardware does not have a current price earnings ratio because there was not enough informtion to compute one.
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