Management efficiency ratio and Real income: Difference between pages

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imported>Doug Williamson
(Create page. Sources: linked pages.)
 
imported>Doug Williamson
(Create the page. Source: The Treasurer, March 2017, p17.)
 
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''Financial ratio analysis.''
Income which has been restated to exclude the effects of inflation.


A financial ratio designed to measure the efficiency of management in controlling the working capital or other resources used by the business.  
When the rate of inflation exceeds the rate of increase - if any - in incomes, real incomes fall.


For example, the inventory turnover ratio.


<span style="color:#4B0082">'''''Real incomes squeeze'''''</span>


Also known as an Activity ratio, or an Efficiency ratio.
:"Unless wages begin to accelerate in line with the inflation pick-up - unlikely, but not impossible - households will see real incomes squeezed this year. Households could turn to credit and begin to draw down on savings to maintain their preferred level of consumption."
 
:''The Treasurer magazine, March 2017, p17 - Kallum Pickering, senior UK economist, Berenberg Bank.''




== See also ==
== See also ==
* [[Asset turnover]]
* [[Inflation]]
* [[Inventory turnover ratio]]
* [[Real]]
* [[Non-current asset turnover]]
* [[Real rate]]
* [[Working capital]]
* [[Income]]
 
* [[Nominal]]
[[Category:Accounting,_tax_and_regulation]]
* [[Treasury inflation-indexed securities]]
[[Category:The_business_context]]

Revision as of 14:21, 13 March 2017

Income which has been restated to exclude the effects of inflation.

When the rate of inflation exceeds the rate of increase - if any - in incomes, real incomes fall.


Real incomes squeeze

"Unless wages begin to accelerate in line with the inflation pick-up - unlikely, but not impossible - households will see real incomes squeezed this year. Households could turn to credit and begin to draw down on savings to maintain their preferred level of consumption."
The Treasurer magazine, March 2017, p17 - Kallum Pickering, senior UK economist, Berenberg Bank.


See also