Working capital turnover divides annual revenue by net working capital, the gap between current assets and current liabilities. This page shows the three steps, where each input sits on the books, and a labeled example for an Elko, NV business. The calculator on the page prices a working capital loan payment from an amount, a rate and a term.
Working Capital Turnover Ratio Calculator: What Elko, NV Owners Compare
The working capital turnover ratio shows how many dollars of revenue a business produces for each dollar of net working capital. A higher figure means working capital is being used heavily; a very high one can mean the business is running short of cushion. Owners compare it with their own past years more than with any other business.
| Step | Calculation | Where the number comes from |
|---|---|---|
| 1 | Current assets minus current liabilities | Balance sheet: net working capital |
| 2 | Annual revenue | Profit and loss statement or tax return |
| 3 | Revenue divided by net working capital | The turnover ratio |
The calculator widget on this page does the next step: it prices a working capital loan, showing the monthly payment, the total interest and the total repaid for an amount, a rate and a term you enter.
Inputs an Elko County, NV Owner Should Gather
- Cash in operating accounts at month end.
- Accounts receivable still owed by customers.
- Inventory at cost.
- Supplier balances owed (accounts payable).
- Wages and taxes owed but not yet paid.
- Loan payments due in the next 12 months.
- Revenue for the last 12 months.
Where the Turnover Inputs Sit on Elko County, NV Books
Current assets and current liabilities sit on the balance sheet your bookkeeping software produces for any month end. Revenue sits on the profit and loss statement. For a motel, leave lodging tax collected from guests out of both revenue and cash, because it is held for the taxing authority; the hotel and motel page explains why.
Use the same month end for every input, and if the business has a slow stretch in receipts, run the ratio at that month end as well as at a typical one.
A Labeled Example for Elko, NV: Local Notes
Illustration only, invented figures: an Elko, NV business with $1,380,000 of annual revenue has $210,000 of current assets and $125,000 of current liabilities. Net working capital is $85,000, and turnover is $1,380,000 divided by $85,000, or about 16.2 in this invented example. Each dollar of working capital supports about $16.24 of revenue in this invented example.
If the owner adds a $40,000 working capital loan paid over 18 months, current assets rise by the cash received and current liabilities rise by the part due within a year, so net working capital moves less than $40,000; in this invented example, with about $26,667 due within the year (a straight-line approximation that ignores interest), net working capital rises by about $13,333.
Pricing a Working Capital Loan With the Calculator
Enter the amount, the annual rate printed on an offer and the term in months. Illustration only, invented figures: $40,000 over 18 months at an invented 13% annual rate gives a payment of about $2,458 a month and total interest of about $4,242 in this invented example.
The calculator does not predict an offer; partners set actual rates and terms. The working capital page explains how to size a request, and the term loan page covers longer schedules. The four Nevada and Elko guides are listed on the guides page.
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