What is the turnover of your own capital?

The turnover of its own capital, more often known as the turnover of capital, is a business formula applied to the annual sales and shareholder of the company. It is a measurement of how well the company uses its capital, and a high turnover shows both good return for shareholders and good business potential. There is no standardized turn with good or bad equity; Instead, the number should be compared with similar businesses. Another comparison of business owners and shareholders should perform the current history of Versus past history to see if business for shareholders is doing better or worse. After obtaining another capital, known as a shareholder, the company must show that it can use the money well, so investors will maintain their money invested, so both parties will make a profit. If you want to determine that it is possible to meet the company its part of the agreement, the formula of the turnover of equity can be used to find out how much money the business earns when using its own chapItales.

For the calculation of the formula, average capital and annual sales are required. Companies usually release annual sales information, so it is easy to load, but another aspect requires some mathematics. The amount of share capital at the beginning of the year must be added to the amount of shares at the end of the year and is then divided into 2, for example. Distribution of $ 30,000 USD 2 results for $ 15,000.

4 If annual sales are $ 45,000, then $ 45,000 divided into $ 15,000 to decorate your own capital 3. Higher number means better returns for shareholders.

There is no such thing as a standardized rate of good or poor turnover of equity; Instead, it should be compared with similar businesses. When comparing similar businesses, the one with a higher number has a greater chance of connectingt higher return, but because business can always slip, it is not guaranteed. The capital formula can also be used to determine whether the company is doing better or worse for shareholders.