Which variable is compared to working capital when calculating the working capital turnover ratio?

Solution

The working capital turnover ratio is a financial ratio that measures how efficiently a company is using its working capital to generate sales. It is calculated by dividing net sales by the average working capital over a period of time.   Working capital is the difference between a company's current assets and current liabilities. Current assets include things like cash, accounts receivable, and inventory, while current liabilities include things like accounts payable and short-term debt.