Why is investment turnover important?

This measurement is particularly relevant when comparing companies within the same industry, as it sheds light on how well each business is managing its capital in relation to its competitors. Investment turnover indicates how well a company generates revenue from its invested capital.

What are invested capital turns?

Invested capital turns are an important consideration in the analysis of return on invested capital ( ROIC ). This metric measures a company’s operating revenues relative to its average invested capital.

What is capital turnover?

Capital turnover is the measure that indicates an organization’s efficiency about the utilization of capital employed in the business, and it is calculated as a ratio of total annual turnover divided by the total amount of stockholder’s equity (also known as net worth) and the higher the ratio, the better is the utilization of capital employed.