working capital turnover ratio meaning

A simple comparison of the service industry and manufacturing industry can clarify the point. But for the rest of the investors and companies other ratios are more useful than equity turnover ratio eg return on equity return on investment debt-equity ratio inventory turnover ratio etc.

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The management of working capital is completely different from industry to industry.

. In the service industry there is no inventory and therefore one big component of working capital is already avoided. It should be optimum because higher working capital means higher interest cost and lower working capital means. Lowest Working Capital.

What makes an asset current is that it can be converted into cash within a year. The definition of working capital shown below is simple. Working capital tells you if a company can pay its short-term debts and have money left over for operations and growth.

Intellectual Capital is the capital that adds to the wealth of the organization. Working capital Current assets current liabilities. What makes a liability current is that it is due within a year.

It includes relational capital human capital and structural capital. Working capital refers to a specific subset of balance sheet items. Working capital is the amount of money a company has left over after subtracting current liabilities from current assets.

All the things or procedures which add to the competitive advantage and can be used for creating money can be added to the intellectual capital of the company. Working capital here refers to the current assets less current liabilities net working capital. The equity turnover ratio may seem useful to the equity investors and even for the company which is more equity capital intensive.

Working Capital Turnover Definition. The more debt a company has on its books meaning the likelihood of default is.

Asset Turnover Ratio How To Calculate The Asset Turnover Ratio