Merchandise Turnover-the number of times a company's average inventory is sold during an accounting period. Cost of goods sold divided by average merchandise inventory. Day's Sales Uncollected-measures how frequently a company collects its accounts receivable. Days sales in Inventory-measures how many days it will take to convert the inventory on hand at the end of the period into accounts receivable or cash. Net sales divided by average total assets.
Capital structure is one of the most important components of solvency analysis.
Capital structure refers to a company's sources of financing. Debt Ratio-expresses total liabilities as a percent of total assets. Pledged Assets to Secured Liabilities-measures the protection provided the secured creditors by the pledge of assets. Book value of pledged assets divided by book value of secured liabilities. Times interest Earned-reflects the riskiness of repayments with interest to creditors.