This ratio measures how effectively the company is collecting its receivables.
Asset turnover is calculated as sales divided by total assets and is a measure of the company's ability to generate earnings from all of its resources.
This ratio measures how quickly the company is able to sell its inventory.
Though this ratio does measure the effectiveness of the use of working capital, it does not measure the effectiveness of the use of all of the assets. This is because working capital includes only current assets.
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