Working capital Turnover ration

I do not have the Kaplan Exam Kit and so I am answering based on the figures that you have typed.

Sales to net WC is not actually a common ratio to look at.
On the one hand, a low net working capital figure can suggest liquidity problems, which you understand.

On the other hand, we don’t want net working capital to be too high because although some working capital is needed, it is not actually earning profits and the money would be better invested in growing the businesses.
What is ‘too high’ depends on the size of the business and so we can look at the sales to net working capital. In this respect the higher the ratio the better.

However, again, it is a very unusual measure to look at (and I don’t think it has ever been relevant in the exam). What looks at the same thing (and in a better way and a more common way) is to measure the operating cycle – the shorter it is the better.

(working capital turnover of infinity in itself means nothing (which is another reason why it is not a common measure). Again all we can say is that from a profitability point of view it is very good (the higher the better) but, of course, there are then very likely to be liquidity problems.)

You are welcome 🙂