For Immediate Release
Chicago, IL – November 10, 2021 – Stocks in this week’s article are Tesla, Inc. (
TSLA Quick Quote TSLA - Free Report) , Huntsman Corporation ( HUN Quick Quote HUN - Free Report) , Alphabet Inc. ( GOOGL Quick Quote GOOGL - Free Report) and Tyson Foods, Inc. ( TSN Quick Quote TSN - Free Report) . 4 Top-Ranked Efficient Stocks to Enrich Your Portfolio
Efficiency level measures a company’s capability to transform available input into output and is often considered an important parameter for gauging a company’s potential to make profits. But at times, it becomes difficult to measure the efficiency level of a company. This is the reason why one must consider popular efficiency ratios while selecting stocks. The following are the efficiency ratios:
Asset Utilization: This ratio indicates a company’s capability to convert assets into output and is thus a widely known measure of efficiency level. It is calculated by dividing total sales over the past 12 months by the last four-quarter average of total assets. Like the above ratios, high asset utilization may indicate that a company is efficient. Operating Margin: This efficiency measure is the ratio of operating income over the past 12 months to sales over the same period. It measures a company’s ability to control operating expenses. Hence, a high value of the ratio may indicate that the company manages its operating expenses more efficiently than its peers. Receivables Turnover: This is the ratio of 12-month sales to four-quarter average receivables. It shows a company’s potential to extend its credit and collect debt in terms of that credit. A high receivables turnover ratio or the “accounts receivable turnover ratio” or “debtor’s turnover ratio” is desirable as it shows that the company is capable of collecting its accounts receivables or that it has quality customers. Inventory Turnover: The ratio of 12-month cost of goods sold (COGS) to a four-quarter average inventory is considered one of the most popular efficiency ratios. It indicates a company’s ability to maintain a suitable inventory position. While a high value indicates that the company has a relatively low level of inventory compared to COGS, a low value indicates that the company is facing declining sales, which resulted in excess inventory. For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1825647/4-top-ranked-efficient-stocks-to-enrich-your-portfolio Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. About Screen of the Week
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Strong Stocks that Should Be in the News
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