₹39,860 crores
and the average total assets are (₹18,629 + ₹17,862)/2 = ₹18,245.5 crores
. The asset turnover ratio of Hindustan Unilever for the year 2019 is ₹39,860 / ₹18,245 = 2.18
. In contrast, the asset turnover ratio of Nestle India for the year 2019 is 1.66
. If we observe the past 5 year trend, Hindustan Unilever has had an asset turnover ratio of greater than 2 while Nestle India has had an asset turnover ratio of greater than 1 but less than 2. Using this information, we can infer that Hindustan Unilever is possibly more efficient at generating revenue from its assets than Nestle India.3.16
. However, due to issue of additional shares and the investment of the capital gained into non-current financial assets, the asset turnover ratio drops to 2.61
in the financial year 2020.₹39,860 / ((₹6,715 + ₹6,202) / 2) = 6.17
while that of Nestle India for the year 2019 is 3.82
.Net Sales
in the numerator instead of COGS
, it would’ve ended up artificially inflating the inventory turnover ratio. After all, the costs associated with the inventory in the balance sheet does not include the potential markup in prices due to profits earned.₹21,441.68 - ₹338.75 = ₹21,102.93 crores
and its average inventory is (₹1,947.40 + ₹1,608.65) / 2 = ₹1,778.02 crores
. This gives us an inventory turnover ratio of ₹21,102.93 / ₹1,778.02 = 11.8
.₹1,275.20 - ₹148.93 + ₹11.47 = ₹1,137.74 crores
and its average inventory is (₹477.92 + ₹328.98) / 2 = ₹403.45 crores
. This gives us an inventory turnover ratio of ₹1,137.74 / ₹403.45 = 2.82
.₹2.99 + ₹1,22,745.81 + ₹1,941.48 + ₹135.62 = ₹1,24,825.9 crores
and its average inventory is (₹9,583.11 + ₹11,493.53) / 2 = ₹10,538.32 crores
. This gives us an inventory turnover ratio of ₹1,24,825.9 / ₹10,538.32 = 11.8
.365 / 11.8 = 30 days
. For V-Mart Retail, DSI is 365 / 2.8 = 129 days
.