Working Capital Turnover

The working capital turnover is a means of comparing the depletion of working capital used in funding operations and purchasing inventory, which is then being converted into sales revenue for the company. The working capital turnover ratio is used to analyze the relationship between the money used for funds operations and the sales generated from these operations. The working capital turnover ratio measures how well a company is utilizing its working capital for supporting a given level of sales. As working capital is current assets minus current liabilities, a higher turnover ratio shows that the management is being very efficient in using a company’s short-term assets and liabilities for supporting sales. 

Calculated as: (Sales Revenue /Working Capital) x 100