Another term for this metric is net sales to working capital. In this ratio, working capital refers to the operating funds a company uses in day-to-day operations.
#Operational working capital turnover plus#
number of days of payables outstanding decreased from 2020 to 2021 but then slightly increased from 2021 to 2022.Ī financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations equal to average inventory processing period plus average receivables collection period minus average payables payment period.īoeing Co. A working capital turnover ratio is a metric that calculates how efficiently a company uses working capital to generate sales. operating cycle deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.Īn estimate of the average number of days it takes a company to pay its suppliers equal to the number of days in the period divided by payables turnover ratio for the period.īoeing Co. number of days of receivables outstanding deteriorated from 2020 to 2021 but then slightly improved from 2021 to 2022.Įqual to average inventory processing period plus average receivables collection period.īoeing Co. Operating Working Capital (OWC) Operating Current Assets Operating Current Liabilities Key Learning Points Working capital is a measure of liquidity and is calculated as current assets less current liabilities. number of days of inventory outstanding deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level.Īn activity ratio equal to the number of days in the period divided by receivables turnover.īoeing Co. An activity ratio equal to the number of days in the period divided by inventory turnover over the period.īoeing Co.
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