The National Directory of Certified Public Accountants

Ask A CPA - Financial Statements

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.

If you need professional help with "Financial Statements" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.