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  •     QAD Glossary

  • Working Capital Turnover
    The Working Capital Turnover KPI is a measurement comparing the depletion of working capital to the generation of sales over a given period. The working capital turnover ratio provides useful information as to how effectively a company is using its working capital to generate sales. The ratio is calculated as:
    Working Capital Turnover = Sales / Working Capital
    Companies use working capital, calculated as the current assets minus current liabilities, to fund operations and purchase inventory. Operations and inventory are then converted into sales revenue for the company. The working capital turnover ratio helps you analyze the relationship between the money used to fund operations and the sales generated from these operations. In general, it is better if the ratio is higher because it means that the company is generating more money from sales compared to the money it uses to fund the sales.
    Example: If a company has current assets of $10 million and current liabilities of $9 million, its working capital is $1 million. When compared to sales of $15 million, the working capital turnover ratio for the period is 15 ($15M/$1M). When used in fundamental analysis, this ratio can be compared to that of similar companies or to the company’s own historical working capital turnover ratios.
    Navigation
    The Working Capital Turnover for the Last 12 Months chart is linked to a grid that shows the working capital turnover details.

    Navigation Overview for the Working Capital Turnover KPI
    Working Capital Turnover for the Last 12 Months Chart
    This chart shows the working capital turnover for the last 12 months for the entity and currency type that you select from the parameter bar.
    Note: The source for this chart is the GL Report Line Fact table.

    Working Capital Turnover for the Last 12 Months Chart
    Working Capital Turnover for the Last 12 Months Grid
    This grid, which shows the amounts used to calculate the working capital turnover ratio, contains the following columns:
    Fin Month
    Fin Month Name
    Formula
    Currency Type
    Entity Code
    Current Assets
    Working Capital Turnover ratio
    Current Liabilities
    Sales

    Working Capital Turnover for the Last 12 Months Grid