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Turnover of Capital
 

Turnover of Capital, the circuit of capital determined not as a single act, but as a periodic process. The time of turnover of capital is determined as the sum of the time during which all advanced capital value passes through the stages of production and circulation. The speed with which capital circulates is calculated by the formula: n = O:o, where n—the number of turnovers, O—an adopted unit of measuring rate of capital turnover (one year), o—the time of turnover of the given capital. Speeding up capital turnover makes it possible to reduce the volume of the advanced capital. This acceleration increases both the annual mass of surplus value and the annual rate of profit. Hence, the striving of capitalists to speed up capital turnover. The composition of productive capital, which is divided into fixed capital and current capital, is an important factor influencing the rate of capital turnover. Therefore, in the time it takes fixed capital to make one turnover, current capital makes several turnovers. Thus, the greater the share of current capital in the advanced capital, the shorter the time of the turnover of all capital. The faster the turnover of all capital the quicker its variable part circulates, and the greater the surplus value of the capitalist. The degree of exploitation of the working class increases correspondingly.

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