Current Ratio - meaning and formula.

Current asset turnover ratio – meaning and formula

The current assets turnover ratio ascertains the efficiency with which current assets are used in a business. This ratio is strongly associated with the efficient utilization of cash, receivables, and inventory. A higher value of this ratio indicates greater circulation of current assets while a low ratio indicates a stagnation of the flow of current assets.

The formula for the computation of current assets turnover ratio is:

Current asset ratio = sales/current asset

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  1. Pingback: Inventory Turnover Ratio (meaning, analysis, and formula) - My Blog

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