Inventory to working capital ratio

Inventory to working capital ratio,

Definition of Inventory to working capital ratio:

  1. Percentage measure of a firms 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 firms financial strength. Formula: (Average inventory ÷ Net working capital) x 100.

Meaning of Inventory to working capital ratio & Inventory to working capital ratio Definition