Lecture 59: Debtor, Creditor & Stock Turnover Days l Activity Ratios l How Banks Use Turnover Ratios

In this video, CA Ankush Jain explains the real-life meaning, interpretation, and calculation of *Debtor Turnover Days, Creditor Turnover Days, and Stock Turnover Days* — also known as **Activity Ratios / Efficiency Ratios**.

📚 Covered in Detail:

1. What are Turnover Days Ratios?
2. Practical breakdown of the formulas:
Debtor Turnover Days = 365 / Net Sales × Closing Debtors
Creditor Turnover Days = 365 / Net Purchases × Closing Creditors
Stock Turnover Days = 365 / COGS × Closing Stock
3. Mathematical understanding behind these ratios
4. Real-life assumptions used in these ratios
5. Limitations of Activity Ratios in financial analysis
6. Impact of seasonal business models on turnover ratios
7. How to interpret and adjust ratios for credit decision-making

🔎 Also known as:
Debtor Turnover Days = Debt Collection Period / Debtor Cycle / Receivables Turnover
Creditor Turnover Days = Creditors Payment Period / Payables Cycle
Stock Turnover Days = Inventory Holding Period / Stock Days

🎯 Ideal for: Bankers | Credit Analysts | CA/MBA Students | Business Owners | Financial Advisors

#DebtorTurnover #CreditorTurnover #StockTurnover #EfficiencyRatios #ActivityRatios #FinancialRatios #LoanAssessment #CAAnkushJain #FinanceLearning #WorkingCapitalAnalysis

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