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Working capital to total assets ratio

Working capital to total assets ratio

Description

Working capital to total assets ratio is useful while evaluating the company’s level of liquidity. Data to calculate this ratio is collected from the balance sheet.

Norms and limitations

There are no general norms for this ratio.

If the value of this ratio is negative, it is likely that the company might have problems covering its’ short term liabilities (debts). It is recommended to compare this ratio to those of the companies, working within the same industry.

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