Working Capital Turnover Ratio

 

 

Analysing Financial statements requires a great deal of time particularly when decisions to be made by investors shall be carried out together with an in depth financial analysis and due diligence. As usual, the financial statemnts can report itself the working capital turnover ratio. 

For the benefit of stackeholders, this indicator values in percentage terms how many times the working capital is turned due to sales objective reached by the management of the company.

As it is visible in the formula, the value is given by the ratio of turnover (sales) divided to current assets in order to indicate the capacity of the company to renew working capital for new production.

As it is known, well performing companies in their industry can generate growing phase on this ratio across several years which means that sales has grown faster than the current assets even though everybody knows that current assets are assets expected to be converted into cash liquidity (total liquity) due to the normal operating cycle of a business.

The normal operatinc cycle of a business is the time period between the purchase of inventory merchandise for resale and the transfer of inventory through sales listed as account receivable or receipt of cash. 

It is widly understandable that this ratio is highly related to mechanism of payments and therefore the tokenization of this indicator into our XBRL Data Analytics Engine is a solution for the ecosystem of creditors that can be adressed verticvally.

 

UNIGIRO is provider of Benchmark Key Performance Indicators 

MONITORING ENTERPRISE CREDIT RISK: we can provide a Smart XBRL Data Analytics Engine Toolkit for Financial Risk Analysis to let Creditors and Investors monitoring company's creditworthiness and financial sustainability

uniGiro Brochure

UNIGIRO DEK 2021

Indicators

General informations

Payment methods

Image
GENERAL INFORMATIONS
EUROPEAN PRIVACY POLICY