The current assets turnover ratio ascertains the efficiency with which current assets are used in a business. This ratio is strongly associated with the efficient utilization of cash, receivables, and inventory. A higher value of this ratio indicates greater circulation of current assets while a low ratio indicates a stagnation of the flow of current assets.
Ratio is the quantitative relation between two amounts showing the number of times one value contain or is contained within the other. In auditing ratio are used when performing analytical procedures which is one method of collecting audit evidence.
Accounting ratio are used to measure the efficiency and profitability of the company based on its financial reports. They provide a way of expressing relationship between one accounting data point to another, and are the basis of ratio analysis.