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Question

Calculate Working Capital Turnover Ratio from the following information: 
Revenue from Operations ₹ 30,00,000; Current Assets ₹ 12,50,000; Total Assets ₹ 20,00,000; Non-current Liabilities ₹ 10,00,000, Shareholders' Funds ₹ 5,00,000.


Solution

Working Capital Turnover Ratio=Net SalesWorking CapitalRevenue from Operations (Net Sales)=Rs 30,00,000 (Given)Working Capital=Current Assets-Current LiabilitiesCurrent Assets=12,50,000 (Given)Current Liabilities=?Total Assets=Total Liabilities=Rs 20,00,000 (Given)Total Liabilities=Shareholders' Funds + Non-Current Liabilities+Current Liabilities20,00,000=5,00,000+10,00,000+Current LiabilitiesCurrent Liabilities=Rs 5,00,000Working Capital=12,50,000-5,00,000=Rs 7,50,000Working Capital Turnover Ratio=30,00,0007,50,000=4 times

Accountancy
TS Grewal-II (2018)
Standard XII

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