Capital Turnover

Description of Capital Turnover. Explanation.

Definition Capital Turnover. Description.

The Capital Turnover is a company's annual sales divided by its average stockholders' equity. Capital turnover is used to calculate the rate of return on common equity, and is a measure of how well a company uses its stockholders' equity to generate revenue. It is also called Equity Turnover.

In a general sense, the higher the Capital Turnover, the better - it means the company is generating a lot of sales compared to the money it uses to fund the sales.

Compare also: Earnings per Share

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End of description Capital Turnover. An explanation.