Question

Determine Working capital turnover ratio if,
Current assets is Rs 1,50,000, current liabilitiesis
Rs 1,00,000 and Cost of goods sold is Rs
3,00,000.
5 times
6 times
1.5 times
3 times​

Answer 1

Finding working capital:-

$\longmapsto\:\sf{Working\:capital\:=\:current\:assets\:-\:current\:liabilities}$

$\longmapsto\:\sf{Working\:capital\:=\: 1,50,000 - 1,00,000}$

$\longmapsto\:\sf{Working\:capital\:=\: 50,000}$

Finding working capital turn over ratio:-

$\longmapsto\:\sf{Working \:Capital \:Turn\:over\: Ratio \:= \:\dfrac{Cost \:of\: Goods \:Sold }{Working\: Capital}}$

$\longmapsto\:\sf{Working \:Capital \:Turn\:over\: Ratio \:= \:\dfrac{3,00,000}{50,000 }}$

$\longmapsto\:\sf{Working \:Capital \:Turnover\: Ratio \:= \:6}$

Therefore working capital turn over ratio is 6 times

• Answer:- Option b 6 times is the correct answer.

Answer 2

Answer:

Answer is 6 times

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