Working Capital Turnover Calculator

Formulas

The formulas used in the calculations are:

$\text{average current assets} = \frac{\text{opening current assets} + \text{closing current assets}}{2}$

$\text{average current liabilities} = \frac{\text{opening current liabilities} + \text{closing current liabilities}}{2}$

$\text{average working capital} = \text{average current assets} - \text{average current liabilities}$

$\text{working capital turnover} = \frac{\text{revenue}}{\text{average working capital}}$

Description

This calculator computes the Working Capital Turnover based on the input values of revenue, opening and closing current assets, and opening and closing current liabilities. The Working Capital Turnover Ratio measures how efficiently a company is using its working capital to generate revenue.

Example Calculation

Let's assume the following:

Revenue: $8,000,000
Opening Current Assets: $3,000,000
Closing Current Assets: $2,000,000
Opening Current Liabilities: $1,000,000
Closing Current Liabilities: $800,000

Calculate the average current assets:

$\text{average current assets} = \frac{3,000,000 + 2,000,000}{2} = 2,500,000$

Calculate the average current liabilities:

$\text{average current liabilities} = \frac{1,000,000 + 800,000}{2} = 900,000$

Calculate the average working capital:

$\text{average working capital} = 2,500,000 - 900,000 = 1,600,000$

Calculate the working capital turnover:

$\text{working capital turnover} = \frac{8,000,000}{1,600,000} = 5$

Therefore, the Working Capital Turnover for Company Alpha is 5x.