Is Receivables Turnover = Revenue/Avg.Receivable the same thing as Net Income/Avg. Receivables?
i notice that Revenue, Net Income and Sales are sometimes use interchangeably
Sales and Revenues can be used interchangeably, but not the Net Income. Sales/Revenue is the top line figure in P&L, whereas Net Income is the bottom line figure.
Net Income and Revenues cannot be used interchangebly.
Net Income is the bottom line
Revenue is the top line
The way i think of turnover ratios is that the last three letters of turnover, read backwards are R,E and V which reminds me that this refers to Revenue. and of course, revenue is turning whatever it is over, which reminds me that revenue must be on top.
Of course, the only difference are in payables turnover and Inventory turnover…but i hope you get the logic.
Also, i think of margin as an opposite of turnover where Revenue is in the bottom.
hopefully this doesn’t confuse anyone, i just have different ways of thinking about things that makes me remember them better.
haha hey bloodline R-E-V ! Great concept