By David Gorton Updated Aug 26, The financial ratios of companies in the retail industry assist management with their selling operations. IBISWorld industry market research reports enable you to: Find out about key industry trends Identify threats and opportunities Inform your decisions for marketing, strategy and planning Quickly build competitive intelligence Provides Market Size information to assist with planning and strategic decisions.
If a company is forced to liquidate its assets to pay its bills, companies with a higher quick ratio are forced to sell fewer assets. Here are the key ratios for the retail sector.
Inventory Turnover Calculated by dividing net sales for a period by the average inventory balance for the same period, inventory turnover is a measurement of the efficiency of inventory management. A retail company may be charged an interest expense for the rent or lease of goods, equipment, buildings, or other items necessary for operations.
With this IBISWorld Industry Research Report onyou can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions. Because all items in a retail company are inventory items, the gross profit margin relates to every item in a retail store.
Current Ratio The current ratio is measured by dividing a company's current assets by its current liabilities.
Financial ratios are based on accounting information disclosed by public companies. A current ratio greater than one indicates that a company can cover its short-term debt with its most liquid assets.
ROA is particularly important for retail companies because they rely on inventory to generate sales. The market research report includes: Historical data and analysis for the key drivers of this industry A five-year forecast of the market and noted trends Detailed research and segmentation for the main products and markets An assessment of the competitive landscape and market shares for major companies And of course, much more IBISWorld reports on thousands of industries around the world.
This ratio is similar to the current ratio, but the quick ratio limits the type of assets that cover the liabilities.