Cash Turnover

View Financial Glossary Index

Definition

Cash Turnover is the amount of times a company has spent through its cash during the reporting period. We calculate cash turnover based on a company's revenues over the average cash balance during that period.

High cash turnovers can mean that a company is going through its cash cycles quickly. While this could mean that your company is being efficient with its cash (ie. able to replenish it quickly and use cash toward better uses), it could also potentially mean a company is low on cash and may need short-term financing in the future (ie. a company with a high amount of revenues and a low amount of cash would have a high cash turnover, but not potentially be in a good situation).

Companies that often make sales based on credit will have higher cash turnover ratios, cash turnover ratios here would have be investigated more in-depth.

Formula

YCharts calculates Cash Turnover (Quarterly) as Total Revenues (Quarter) / Avg of Beginning and Ending Cash and ST Equivalents

YCharts calculates Cash Turnover (TTM) as Total Revenues (Annual) / Average Cash and Short Term Investments.

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