Question

Ratio of 'net sales' to' net Working Capital is a:
(1) stock turn over ratio (2) debtors turn over ratio (3) working capital turn over ratio (4) None of the above​

Answer 1

• Answer

Ratio of 'net sales' to' net Working Capital is a working capital turn over ratio.

• Explanation

Formula of working capital turnover ratio can be written in this way too

Working capital turnover ratio = Revenue from operation/working capital

Here,

• Revenue from operation means sales
• working capital = current asset - current liabilities

Current assets include current investment, bills receivable, cash in hand , short term lóáns and advànces etc.

Current liabilitiés include short term bórrowing, bills payable, long term ɖɛɞɬ, short term provîsîon etc.