Receivable Turnover Case Study

Receivables Turnover
According to the table that shows Gamma turnover is 5.8 times and it's mean Gamma collect his receivables about 5.8 times each year but alpha turnover is 1.4 times and it's mean that alpha collect his receivables about 1.4 times each year. So, Gamma Corporation has higher proportion than Alpha Corporation and it shows that gamma corporation operates more efficiently with smoother cash flow and collects the money from the creditor easily and on the time. Also, that probably gathered the credit deals than alpha company that have lower proportion.
There are different reasons for lower proportion. For instance, Customers have a trouble with money, bad credit policy or excessive amount of bad debt. So, the firm can improve
As a table shows Gamma Corporation for inventory turnover is 6.4 times and it's more than inventory turnover for Alpha Corporation around 4 times. So, Gamma Corporation has ineffective buying or strong sales. As for Alpha Corporation it infers poor sales, poor deals because low turnover and that lead to excess inventory so the company need to put strong strategy by increase the sales or decrease the investment to sold all the inventory and get high inventory turnover
Fixed Assets
As indicated on the table, that Gamma Corporation is 0.9 times in total asset turnover and it's higher than Alpha Corporation is around 0.6 times and it's lower. So, Gamma corporation have higher ratio and that mean is generating more revenue per dollar of assets so they are more efficiently in using their assets and favorable while Alpha corporation have lower ratio because different reasons such as they not use the assets efficiently, bad strategy or production issue, wherefore they need to manage the Inventory in better way, sell Assets, increase Revenue (sales), liquidate Assets and Improve efficiency to get high total assets