Dividing the company's net income of $80,000 by $120,000 ($100,000 fixed assets plus $20,000 net working capital) will result in a return-on-net-assets ratio of 0.67.

The working capital ratio is a very basic metric of liquidity. It's meant to indicate how capable a company is of meeting its current financial obligations and is a measure of a company's general ...

Using the previous example, assume you have the same net sales but instead have $50,000 in average working capital. Your turnover ratio would be 42 – far too high for your industry.

The working capital turnover is calculated by taking a company's net sales and dividing them by its working capital. Since net sales cannot be negative, the turnover ratio can turn negative when a ...

For example, if a company has $100,000 in current assets and $90,000 in liabilities, the company has a working capital of $10,000 but a working capital ratio of 110%. $100,000 / $90,000 = 110% ...

200,000 / 500,000 = .4, so your Working Capital Ratio is 40%. (Keep in mind lenders often check out your WCR to determine whether you can survive short and longer-term dips in sales and revenue.

Most analysts consider the ideal working capital ratio to be between 1.5 and 2. 1 2 As with other performance metrics, it is important to compare a company's ratio to those of similar companies ...

Working capital ratio = current assets / current liabilities As such, the earlier example of Business X would have a working capital ratio of £27,500 divided by £17,500, which equals 1.57.

7. Key Takeaways Textbooks and financial courses often point out that a sound balance sheet is characterized, among other things, by a healthy current ratio, i.e., positive net working capital.

There is no exact “perfect” ratio, but a ratio of about 2 : 1 (about £2 of current assets for every £1 of short-term debt) is considered desirable. If a business has a working capital ratio ...

Net Working Capital Ratio: Minus 0.3%, compared to minus 0.8% last year. Cash Conversion: 76.8%. Net Debt: DKK332 million, down from DKK347 million last year. Leverage Ratio: Decreased from 3.7 to ...