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TurnIn the equities market, a reversal; unwind.Turn Similar MatchesStockturnStockturnA financial ratio which shows how fast a company sells its goods, calculated as: sales divided by year-end stocks. If, for example, a company has sales of £60m and a year-end stock figure of £3.2m its stockturn multiple is 18.85.Stockturn is particularly relevant for manufacturing or retailing businesses. The higher the figure, the more efficient the company is in processing stock. The typical multiple for a manufacturer is 5 to 6. Retailers that are doing well and run efficiently will have a much higher multiple because they should be able to put the burden of carrying stock on their suppliers.Another way of looking at stock is to calculate the number of days on average that a company keeps its stock. This is expressed as the year-end stock figure divided by the sales, and multiplied by 365. Using the figures above, £3.2m divided by £60m, then multiplied by 365 = 19.46 days. Leveraged required returnLeveraged required returnThe required return on an investment when the investment is financed partially by debt. Risk adjusted returnRisk adjusted returnReturn earned on an asset normalized for the amount of risk associated with that asset. Rate of returnRate of returnCalculated as the (value now minus value at time of purchase) divided by value at time of purchase. For equities, we often include dividends with the value now. See also: Return, annual rate of return. Returns to scaleReturns to scaleSame as increasing returns to scale. Further Suggestionsreturn on investmentIncreasing And Diminishing Returns Multiple rates of return Diminishing returns Cumulative abnormal return (CAR) Return to capital Riskless rate of return Return on sales Return Law of Diminishing Returns Market return return on total assets Money rate of return "Static" Return Decreasing returns to scale Certainty Equivalent Return Cash on cash return Maximum return criterion (MRC) Turnaround time Return on assets (ROA) Horizon return Required return Incremental internal rate of return Return on investment (ROI) Downturn |
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