Question

What is Working Capital Turnover Ratio?

Answer 1

The Working Capital Turnover Ratio determines how well a company uses its working capital (current assets minus current liabilities) to produce revenue. It represents how many times working capital is required to support sales over a given time period, which is often a year.

The formula for the Working Capital Turnover Ratio is:

Working Capital Turnover Ratio = `"Net revenue from Operations"/"Working Capital"`