What Is a Working Capital Turnover?

Fund turnover refers to the recurring capital cycle. The core problem of capital turnover is the time (or speed) of capital movement and its impact on the amount of capital occupation and product production and value creation. Funds start from a certain form, and the time it takes to return to this form after exercise is called capital turnover time. The capital turnover time is composed of production time and circulation time. The nature of products and technical production conditions produced by each enterprise are different, and the geographical location, production and sales distance, and transportation means are different. The production time and circulation time must be different. Different funding turnaround times. ^[1]

Cash flow

An index that reflects the speed of capital turnover.

Enterprise funds (including fixed funds and working capital) are continuously circulated in the production and operation process, so that the enterprise can obtain sales revenue. The enterprise uses as little capital as possible and obtains as much sales income as possible, which shows that the capital turnover is fast and the capital utilization effect is good.