Question

State the meaning of working capital turnover ratio. Give the formula of calculating working capital turnover ratio.

Answer 1

BREAKING DOWN Working Capital Turnover. The working capital turnover ratio is calculated by dividing net annual sales by the average amount of working capital – current assets minus current liabilities — during the same 12-month period. For example, Company A has $12 million of net sales over the past 12 months

Answer 2

BREAKING DOWN Working Capital Turnover. The working capital turnover ratio is calculated by dividing net annual sales by the average amount of working capital – current assets minus current liabilities — during the same 12-month period. For example, Company A has $12 million of net sales over the past 12 months