Calculate the working capital turnover ratio, an efficiency ratio that measures how effectively a company uses its working capital to generate revenue.

A high working capital turnover ratio indicates that a company is generating a large amount of revenue relative to the working capital it employs, which can signal an efficient (or, if extreme, undercapitalized) operation. A low ratio can indicate excess inventory, slow receivables collection, or otherwise underutilized working capital.

The formula is as follows:

\[\text{Working Capital Turnover Ratio} = \text{Revenue} / \text{Average Working Capital}\]

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Calculate the Working Capital Turnover Ratio in Python

The Working Capital Turnover Ratio is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_working_capital_turnover_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

working_capital_turnover_ratios = toolkit.ratios.get_working_capital_turnover_ratio()

Parameters

get_working_capital_turnover_ratio accepts the following parameters:

  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Days of Accounts Payable Outstanding Cash Conversion Cycle Cash Conversion Efficiency Receivables Turnover SGA to Revenue Ratio Fixed Asset Turnover Operating Ratio Research and Development Ratio Selling and Marketing Ratio General and Administrative Ratio Stock-Based Compensation Ratio Deferred Revenue Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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