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Working Capital Ratio
(redirected from Working-Capital-to-Sales Ratio)

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Working capital ratio
Working capital expressed as a percentage of sales.

Working Capital Ratio
Cash and short-term assets expected to be converted to cash within a year as a percentage of the amount of annual sales. Because expansion requires capital on hand, the working capital ratio is considered a prime indicator of a company's ability to expand its operations without taking on additional debt. Perhaps more straightforwardly, it is often known as the working capital to sales ratio.


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If your working-capital-to-sales ratio stays at 20 percent, you will have $400 million in working capital by 2007.
The working-capital-to-sales ratio has reduced from more than 18% to less than 11%; we've seen a substantial increase in stock turns, whilst increasing OTIF out to the customer.
 
 
 
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