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Definition of 'Days Working Capital'
An accounting and finance term used to describe how many days it will take for a company to convert its working capital into revenue. The faster a company does this, the better.
To calculate days working capital, the following formula can be used:
Days working capital can be used in ratio and fundamental analysis.
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Investopedia explains 'Days Working Capital'
When utilizing any ratio, it is important to consider how this company has evolved over time and how it compares to similar companies in the same industry. By comparing this ratio in a historical and relative basis, you will get a better understanding of how efficient a given company actually is.
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Video Definition
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