Sales to Net Working Capital Ratio Calculator

Formula

The formula to calculate the Sales to Net Working Capital Ratio (SNWCR) is:

\[ SNWCR = \frac{S}{NWC} \]

Where:

$ SNWCR $ is the Sales to Net Working Capital Ratio (dimensionless)
$ S $ is the Total Sales Revenue ($)
$ NWC $ is the Net Working Capital ($)

What is Sales to Net Working Capital Ratio?

The Sales to Net Working Capital Ratio is a financial metric that measures how efficiently a company is using its net working capital to generate sales. A higher ratio indicates that the company is effectively using its working capital to support sales activities, while a lower ratio may suggest inefficiencies.

Example Calculation

Let's assume the following values:

Total Sales Revenue (S) = $1,000,000
Net Working Capital (NWC) = $200,000

Using the formula to calculate the Sales to Net Working Capital Ratio:

\[ SNWCR = \frac{1,000,000}{200,000} = 5 \]

The Sales to Net Working Capital Ratio is 5.