Capital turnover

Definition:

Calculated by dividing annual sales by average stockholder equity (net worth). The ratio indicates how much a company could grow its current capital investment level. Low capital turnover generally corresponds to high profit margins.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Cumulative voting

A system of voting for directors of a corporation in which shareholder's total number of votes is equal to the number of shares held times the number of candidates.

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio