What is meaning of working capital turnover

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Working capital turnover is a measure of a company’s efficiency in managing its short-term assets and liabilities. It is calculated by dividing the company’s total sales by its net working capital. Working capital turnover is a key metric for a company’s financial health, as it indicates how quickly a company can convert its current assets into cash.

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The higher the working capital turnover, the better the company is at managing its short-term assets and liabilities. A high working capital turnover ratio indicates that the company is using its resources efficiently, and is able to quickly convert its assets into cash. A low working capital turnover ratio, on the other hand, indicates that the company is inefficient in managing its resources, and is not able to quickly convert its assets into cash.

Working capital turnover is an important metric for investors and analysts to consider when evaluating a company’s financial health. It is also important for a company to monitor its working capital turnover, as it can provide insight into how efficiently the company is managing its resources.

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