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Financial Statements

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  4. What is the Turnover of Cash Liquidity ratio ?

What is the Turnover of Cash Liquidity ratio ?

The Turnover of Cash Liquidity ratio evaluates the adequate means that a company has to finance sales without struggling to pay for materials or goods that the company is buying. Net sales, divided by working capital = TOC Ratio. (Working capital = current assets, minus current liabilities). The generally accepted standard is 5 or 6 times working capital, but may differ depending on your industry.

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