working capital turnover ??

i know it is sales/WCap, but in what would drive an analyst to use this ratio. I have never seen it used on the buy side, so was wondering what is the underlying motivation to use this ratio. I guess you want to turn your working capital over more frequently generally speaking and sales are in the numerator b/c investment is working cap drive future revs??? is that the “net net” here?

umm… i dont know what it means but if i have to guess on exam, i’d say it measures how much sale is being generated for each unit of working capital. (remember working capital is c. assets - c. liabilities) so i’d say this ratio measures how much sale occurs via active management of your working capital issues. A large ratio would be beneficial.

Definitions of Working Capital Turnover on the Web: * A measurement comparing the depletion of working capital with the generation of sales over a given period.

meazza Wrote: ------------------------------------------------------- > Definitions of Working Capital Turnover on the > Web: > > * A measurement comparing the depletion of > working capital with the generation of sales over > a given period. higher the better?