Friday, March 18, 2011

Working Capital turnover ratio

What is the difference between a Working Capital turnover ratio and inventory turnover ratio in accounting? Working capital turnover ratio indicates a company’s effectiveness in using its working capital (total amount of current assets) it is also referred to as net sales to working capital

The average working capital is drawn by adding the beginning amount to ending working capital then dividing by two. Working capital is equal to the difference between current assets and current liabilities:

Roster turnover quotient is a ratio that processes how operative a corporation is laying its inventory resources to work generating sales. A low revenue percentage may indicate that a firm is carrying obsolete goods in inventory or its speculation in account is extreme.