CBSE 2024, Set 3

Question

From the following information, calculate Working Capital Turnover Ratio:
Gross Profit Ratio: 25%
Gross Profit: ₹5,00,000
Shareholders Funds: ₹25,00,000
Non-current liabilities: ₹8,00,000
Non-current Assets: ₹23,00,000

Edvaya · Accepted Answer

The correct answer is Subjective. **1. Calculation of Revenue from Operations:** Gross Profit Ratio = (Gross Profit / Revenue from Operations) $	imes$ 100 25% = 5,00,000 / Revenue from Operations Revenue from Operations = $ 5,00,000 / 0.25 = 	ext{₹}20,00,000 $. **2. Calculation of Working Capital:** Capital Employed = Shareholders' Funds + Non-Current Liabilities $ = 25,00,000 + 8,00,000 = 	ext{₹}33,00,000 $. Working Capital = Capital Employed - Non-Current Assets $ = 33,00,000 - 23,00,000 = 	ext{₹}10,00,000 $. **3. Calculation of Working Capital Turnover Ratio:** Working Capital Turnover Ratio = Revenue from Operations / Working Capital $ = 20,00,000 / 10,00,000 = 2 	ext{ times} $. *(Alternatively, calculated on Cost of Revenue from Operations: COGS = 20,00,000 - 5,00,000 = 15,00,000. Ratio = 15,00,000 / 10,00,000 = 1.5 times).*

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Accountancy > Financial Statements Analysis > Accounting Ratios

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