INVENTORY TO NET WORKING CAPITAL
CONDITION
| Year : | 2006 |
| Your ratio : | |
| Industry Avg : | |
| Inventory : | $26,726 |
| Total Current Liabilities : | $102,096 |
| Total Current Assets : | $84,543 |
GRAPH
INVENTORY TO NET WORKING CAPITAL
This ratio should be considered along with inventory turnover.It's preferable to run your business with as little inventory as possible, provided the turnover ratio is not significantly above the industry average.This Would indicate less than optimal use of working capital. Keeping track of inventory levels is crucial to determining the financial helath of your business. If this number is high compared to the average for your industry.it could mean your business is carrying too much inventory.
This ratio tells how much of a company's funds are tied up in inventory. It is preferable to run your business with as little as possible on hand, while not affecting the fullfillment of larger sales opportunities.
Your perfomance on this ratio indicates an overabundance od inventory. The level of inventory needs to be lowered immediately in order to raise or get an infusion of capital.