Question

From the following calculate:

(a) Current Ratio; and 
(b) Working Capital Turnover Ratio.

		₹
(i)	Revenue from Operations	1,50,000
(ii)	Total Assets	1,00,000
(iii)	Shareholders' Funds	60,000
(iv)	Non-current Liabilities	20,000
(v)	Non-current Assets	50,000

Answer 1

A)  Current Ratio = `"Current Assets"/"Curent Liabilities"`

Current Assets = Total Assets - Non-Current Assets

= 100000 - 50000

= Rs 50000

Total Assets = Total Liabilities = Shareholders’ Funds + Non Current Liabilities + Current Liabilities
1,00,000 = 60,000 + 20,000 + Current Liabilities
Current Liabilities = Rs 20,000

Current Ratio = `50000/20000 = 2.5 : 1`

B) Working Capital Turnover Ratio = `"Revenue From Operations"/"Working Capital"`

Working Capital = Current Assets - Current Liabilities

 = 50,000 – 20,000
 = Rs 30,000

Working Capital Turnover Ratio = `150000/30000 = 5` times