Working capital turnover estimates how viable a business is at producing deals for each dollar of working capital put to utilize.A company's ability to generate more sales is indicated by a higher working capital turnover ratio, which is better.
What distinguishes working capital ratio from working capital?
The difference between a company's current assets and liabilities is referred to as working capital. These numbers are compared as a percentage using the working capital ratio. When determining a company's financial health, both metrics can be helpful.
The ratio of assets to liabilities, or how many times a company can pay off its current liabilities with its current assets, is shown by the working capital ratio. The calculation for the working capital ratio is: Current assets divided by current liabilities is the working capital ratio.
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