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Turnover Ratios
Eric Novinson
posted

This is similar to using the cash conversion cycle to set up a filter, except it doesn't use days in payment. Wanted to test some of the operation ratios to see if they had more predictive power than other financial metrics. This algorithm mostly selects restaurant stocks, since that sector has high turnover, and it seems to select some of the better-performing restaurants. Wondering if anyone else has seen promising results with algorithms based on operation ratios.

1 response
Eric Novinson

I think I may have figured it out. If the algorithm buys restaurant stocks with the highest inventory turnover, then it's picking the restaurants with the freshest food.

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