Ratio of 'Net sales' to 'Net Working Capital' _________________.

Liquidity ratio

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Profitability ratio

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Working capital turnover ratio

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Capital gearing ratio

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Solution

The correct option is D Working capital turnover ratio
The working capital turnover ratio determines the utility of the working-capital for the level of sales and the working capital ratio can be determined by dividing the net sales by net working capital. And Working Capital is equal to current assets minus current liabilities. A high turnover ratio is better because a low ratio indicates an inefficient utilization of working capital during the period.
Thus the correct answer is C.

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