Working Ratio Definition

Below please find a definition of “Working Ratio”

Financial Analysis Training & Glossary TermsWorking Ratio: Working ratio is calculated by dividing a company’s annual expenses by its annual revenues. A company’s working ratio is a measure of a company’s ability to cover its expenses. If a company has a working ratio of 1 or less than 1 that implies that the company has the ability to cover its expenses. On the other hand a company with a working ratio of more than 1 has less chances of covering its expenses.

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