It means net sales is $ 820 on the $ 100 invested current assets. So, its current asset turnover is = 443 /54 X 100 = 820%. For example Walmart company's 2012 sale is $ 443 Billion. It means, we have become successful for doing $ 20 sales when we have invested our money in the form of different current assets like inventory, short term investments, prepaid expenses, outstanding incomes, sundry debtors whose cost is $ 100.Ģ. For example current asset turnover ratio is 20%.
When we divide the net sales with current assets and multiply with 100, we find that value net sale which has been possible due to $ 100 investment of current assets.ġ.
Current assets turnover ratio shows the relationship between net sales and current assets.
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