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Some variation form the industry averages is evident, but this may simply reflect seasonal sales fluctuations. The efficiency of JB Hi Fi Ltd Company includes inventory turnover, debtors turnover and creditors turnover. Inventory turnover is the measure and evaluate corporate buy stock, production, selling back the status of the comprehensive management indicators. In 2009 and 2010, JB Company has inventory turnover 65days and 57days respectively. And Harvey Norman Company has 91 days and 98 days in the same two years. In general, the speed of inventory turnover faster, the lower the occupation and the stronger liquidity, the inventory or accounts receivable into cash will be faster. Increasing inventory turns to improve the liquidity of companies, and slower inventory turnovers is worse liquidity. So, the data shows JB Company decline the inventory turnover days, it means that this company improves its cash ability. On the contrary, Harvey Norman spends more days on inventory turnover, so its cash ability becomes worse. In the case of Debtors turnover, JB has 1.8 days and 1.34 days, but Harvey Norman has 261 days and 282 days. The company’s accounts receivable in current assets plays a decisive role. If the company’s accounts receivable to recover in time, the company will be able to substantially increase the efficiency of fund use. Generally, debtors turnover the higher the better, that the company billing speed and average collection period is short, less bad debts, liquidity fast, and strong solvency. By contrast, debtors turnover days are shorter the better. So, the debtors turnover of JB drop from 1.8 days to 1.34 days, it illustrates JB Company owns better abilities in many aspects. But the Harvey Norman is different from JB, because of its debtors turnover days increases. It also means that facilities due to the debtor a long time, credit is low, and increases the risk of occurrence of bad debts, it also shows that collection of company...
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