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What is the Efficiency of utilization in sales

Efficiency of utilization in sales generation: The concept of working capital can be used along with turnover to judge the velocity with which working capital is being used to generate sales. A high ratio indicates the high efficiency of firm to generate sales with its operational funds. A very high ratio is also a sign of worry since it might be due to very small difference between the current assets and current liability position. This in turn can cause shortage of funds to meet operational needs.

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