inventory to working capital ratio
Definition
Percentage measure of a firm's capability to finance its inventories from its available cash. Numbers lower than 100 are preferable as they indicate high liquidity. Numbers higher than 100 suggest that the inventories are too large in relation to the firm's financial strength. Formula: (Average inventory ÷ Net working capital) x 100.
inventory to working capital ratio is in the Accounting & Auditing, Banking, Commerce & Finance and Inventory Control & Storage subjects.
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