Question

Following information is of Raja Ltd. for 2 years. Calculate the Fixed Assets Turnover Ratio:

	2024-25 (₹)	2025-26 (₹)
Fixed Assets at written-down value	3,00,000	6,00,000
Cost of Revenue from Operations	12,00,000	18,00,000

Answer 1

The Fixed Assets Turnover Ratio is 4 Times for 2024–25 and 3 Times for 2025–26.

When Revenue from Operations is not given, Cost of Revenue from Operations is used:

\[\text{Fixed Assets Turnover Ratio} = \frac{\text{Cost of Revenue from Operations}}{\text{Fixed Assets at Written Down Value}}\]

Calculation for Year 2024–25:

Cost of Revenue from Operations: ₹ 12,00,000

Fixed Assets (WDV): ₹ 3,00,000

$$\text{Fixed Assets Turnover Ratio} = \frac{12,00,000}{3,00,000} = 4$$

$${\text{Fixed Assets Turnover Ratio (2024–25)} = 4\text{ Times}}$$

Calculation for Year 2025–26:

Cost of Revenue from Operations: ₹ 18,00,000

Fixed Assets (WDV): ₹ 6,00,000

$$\text{Fixed Assets Turnover Ratio} = \frac{18,00,000}{6,00,000} = 3$$

$${\text{Fixed Assets Turnover Ratio (2025–26)} = 3\text{ Times}}$$