acceptable ratios

Feb 26, 2008 2 Replies

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omarfdawood 18 years ago

Dear Experts, What are the acceptable ratios of the following?

1.Accounts Receivable to Sales
2.Inventoreis to Sales Thanks

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Rocinante 18 years ago

1). Ratios larger than 1.0 indicate that receivables are growing faster than sales. It could indicate collection problems. 2). It could depend on the industry sector, but you don't want to see it growing either.

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QBConsultant 18 years ago

You should look at the industry averages. For small businesses, you can get some good info at

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For large companies try moneycentral.msn.com. Once you calculate the inventory or accounts receivable turnover, calculate the day in invty/AR. (365/turnover ratio). You don't want too many days in AR (

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