Working capital ratio

(redirected from Working Capital to Sales Ratio)

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.
References in periodicals archive ?
The net working capital to sales ratio is also known as net working capital intensity and these intensities differ both within industries (which may reflect different managerial decisions and level of vertical of integration), and across industries (e.
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In a context of steady growth, the working capital to sales ratio decreased significantly, to 27%, compared with 41% a year earlier.
Due to a more rational competitive environment, Arrow has been able to maintain lower inventory levels, resulting in a working capital to sales ratio of approximately $0.
s (Avnet), Arrow's main competitor, working capital to sales ratio for the fiscal year ended July 2, 2005, was approximately $0.