Technicals Stability Returns

Understanding Days in Working Capital

Days in Working Capital indicates how many days a company takes to convert its working capital into revenue. Most efficient companies took a minimum day to convert working capital into revenue.

The Maximum number of days may indicate the company's sales are decreasing. The company that takes minimum days is better than the company that takes more days. For better analysis compared, companies in the same industries because the number of days for converting working capital into revenue differs from industry to industry.

The formula for calculating Days in Working Capital

Days in Working Capital

Example: For the financial year, Apollo Micro Systems reported Working Capital as Rs. 220.51 Cr. and Total Revenue as Rs. 10560.01 Cr.
The value as per the formula (220.51 / 10560.01) = 7.62.