Working capital turnover (WC turns)
How many units of revenue are produced per unit of capital tied up in stock and unpaid invoices.
Businesses that grow without tying up more working capital fund their own expansion.
How it is computed here
Revenue / absolute value of working capital
Measured over the latest complete fiscal year, as filed. Filed under quality. Higher is the stronger reading, other things equal.
No published threshold exists for this figure, so this page prints none. Read it against the company's own history and its peers instead.
When it misleads
- Computed on the absolute value of working capital, so a company with NEGATIVE working capital (a good sign in retail) produces a high figure that means something different.
- Withheld when working capital is exactly zero.
Not meaningful for banks, insurers: the product prints n/m with the reason rather than a number for them.
Questions
How is working capital turnover calculated?
Revenue / absolute value of working capital. Measured over the latest complete fiscal year, as filed.
What does working capital turnover tell a value investor?
Businesses that grow without tying up more working capital fund their own expansion.
When does working capital turnover mislead?
Computed on the absolute value of working capital, so a company with NEGATIVE working capital (a good sign in retail) produces a high figure that means something different. Withheld when working capital is exactly zero.