Working capital 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 Nordex Group confirms its guidance for the current year 2019 and expects to generate consolidated sales of EUR 3.2 to EUR 3.5 billion, an EBITDA margin of between 3.0 and 5.0 percent and a working capital ratio of under 2 percent in relation to sales.
The Nordex Group confirms its 2019 guidance and expects to generate consolidated sales of EUR 3.2 to EUR 3.5 billion, an EBITDA margin of between 3.0 and 5.0 percent and a working capital ratio of under two percent in relation to sales.
The applicable financial targets are EBITA margin and net working capital ratio, calculated at three-year-averages.
The research has concluded that the net working capital ratio indicating the proportion of the assets falling on the funds earmarked for circulation correlates with the unemployment level (20.48%), the volume of import (15.66%) and the rate of inflation in the country (15.66%) (Fig.
The first analyzed indicator is the size of working capital ratio (see table 1).
Furthermore, the relationship between working capital ratio and operational performance and the marginal influence of working capital on performance are also examined by panel data analysis.
Further, the table reveals that the net working capital ratio remained fluctuating during the period of study.
The debt structure was different for real estate companies, with a much higher presence of long-term liabilities, resulting in a higher working capital ratio (27.75% instead of 17.05%).
Net working capital ratio: It measures the Cooperative Unions' potential for funds.
While revenue was increasing, the company's working capital ratio dropped by 7%, a big improvement over the previous year.
[X.sup.3] = WOR, Working Capital Ratio as a proxy for liquidity
It is a widely held view that an acceptable working capital ratio is two-to-one, or twice as much current assets as liabilities.