Capital Turnover

Capital Turnover - The capital turnover of a company is the company's annual sales, which are divided by the averaged stockholder's equity. This calculation, capital turnover, is used to figure out the rate of return for common equity, and is also a measure as to how well a company uses the stockholder's equity to generate additional revenue. The higher the calculated ratio is figured out to be, the more efficient the company is at using their capital. This is also known as equity turnover as well and is a great measure of how well a company is doing.