Question

What do turnover ratios focus on? What is an example of a turnover ratio and how is it computer

Answer 1

The turnover ratio is the lower of the total sales or total purchases over the period divided by the average of the net assets. The higher the turnover ratio, the greater the volume of trading carried out by the fund. If high turnover can generate high returns, then there should be no problems. A turnover ratio represents the number of assets or liabilities that a company replaces in relation to its sales. The concept is useful for determining the efficiency with which a business utilizes its assets.

Better turnover ratios imply extended fund prices, which can reduce the fund's ordinary performance. higher turnover charges also can have terrible tax consequences. funds with higher turnover charges are much more likely to incur capital gains taxes, that are then distributed to buyers.

A higher turnover ratio can reflect higher profitability, while a low turnover charge can replicate lower profitability. A turnover charge that equals 1 or less reflects the enterprise has greater stock than the current purchaser marketplace demands. A turnover rate it really is over 1 suggests an employer sells merchandise that matches marketplace needs.

The low turnover way an enterprise has a pretty small variety of personnel leave all through a given period relative to the personnel employed or hired at the start of that period.

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