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Accounting Topic 20

TermDefinition
Age Analysis of Debtors A table that classifies debtors' accounts according to the age of their debt.
Cash Cycle The process of turning stock into sales, and then turning these sales into cash. It is calculated by adding together stock turnover and debtors turnover.
Creditors Turnover Ratio A financial indicator that determines the average time taken by a firm to pay its creditors' accounts.
Debtors Turnover Ratio A financial indicator that determines the average time taken by debtors to settle their accounts.
Just in Time Ordering A method of purchasing inventory whereby the new order of goods arrives just before the business runs out of stock.
Stock Turnover Ratio A financial indicator that determines the number of times stock has been turned into sales during a period. It also can be expressed as the number of days needed to turn stock over once.
Created by: Giant Kahuna