Question

Calculate Working Capital Turnover Ratio from the following information:

Particulars	₹
Revenue from Operations	30,00,000
Current Assets	12,50,000
Current Liabilities	5,00,000

Answer 1

Calculation of Working Capital:

\[\text{Working Capital} = \text{Current Assets} - \text{Current Liabilities}\]

$$\text{Working Capital} = ₹ 12,50,000 - ₹ 5,00,000$$

$${\text{Working Capital} = ₹ 7,50,000}$$

Calculation of Working Capital Turnover Ratio:

$$\text{Working Capital Turnover Ratio} = \frac{\text{Revenue from Operations}}{\text{Working Capital}}$$

$$\text{Working Capital Turnover Ratio} = \frac{30,00,000}{7,50,000} = 4$$

Working Capital Turnover Ratio = 4 Times