A ______ working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.

Low

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High

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Equal to 1

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None of these

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Solution

The correct option is A
Low

A low working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.

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Similar questions

A ___ Working capital turnover ratio indicates that management is being extremely efficient in using a firm's short-term assets and liabilities to support sales.

Q. Inventory Turnover Ratio shows how many times Inventories are converted into Sales (Revenue) and higher the Inventory Turnover Ratio better it is.

Q. From the following information calculate
(i) Gross Profit Ratio
(ii) Inventory Turnover Ratio
(iii) Current Ratio
(iv) Liquid Ratio
(v) Net Profit Ratio
(vi) Working Capital Ratio

$\begin{matrix} Items & Rs. Sales & 25, 20, 000 Net Profit & 3, 60, 000 Cost of Sales & 19, 20, 000 Long term Debts & 9, 00, 000 Creditors & 2, 00, 000 Average Inventory & 8, 00, 000 Current Assets & 7, 60, 000 Fixed Assets & 14, 40, 000 Current Liabillities & 6, 00, 000 Net Profit Before Interest and Tax & 8, 00, 000 \end{matrix}$

Q. From the following information, calculate Inventory Turnover Ratio; Operating Ratio and Working Capital Turnover Ratio:
Opening Inventory ₹ 28,000; Closing Inventory ₹ 22,000; Purchases ₹ 46,000; Revenue from Operations, i.e., Net Sales ₹ 80,000; Return ₹10,000; Carriage Inwards ₹ 4,000; Office Expenses ₹ 4,000; Selling and Distribution Expenses ₹ 2,000; Working Capital ₹ 40,000.

Q. Calculate Gross Profit Ratio from the following data:
Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales.

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A ______ working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.

The correct option is A Low A low working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.

The correct option is A
Low

A low working capital turnover ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales.