The Working Capital Turnover of Tesva Systems Corp

question 20

Multiple Choice

The working capital turnover of Tesva Systems Corp. is 6.0. What does this financial data suggest?

• A) For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00.
• B) For every $6.00 Tesva Systems puts to work, the company realizes sales of $1.00.
• C) For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss.
• D) For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.

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Definitions:

P/E Ratio

The price-to-earnings ratio, a valuation metric comparing a company's current stock price to its per-share earnings.

EBIT

Earnings Before Interest and Taxes, a financial metric used to evaluate a company's operating performance.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment to boost its long-term revenue.