Question

Compute Working Capital Turnover Ratio from the following data:
Cost of Revenue from Operations is Rs. 8,40,000; G.P. Ratio is 20% and excess of Current Assets over Current Liabilities is Rs.
3,50,000
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Answer 1

Answer:

3:1

Explanation:

Revenue = Cost of revenue add Gross Profit  

Revenue = Rs 840,000 add 20% * Revenue

Revenue = Rs 10,50,000

Working Capital = Excess of Current Assets less Current Liabilities = Rs 350,000

Working Capital Turnover ratio = Revenues/Working capital

Working Capital Turnover ratio = Rs 10,50,000/Rs 350,000 = 3