Question 116:
Calculate Working Capital Turnover Ratio from the following information;
Revenue from Operations (Cost of Goods Sold) 24,00,000
Current Assets 10,00,000
Current Liabilities 4,00,000
Answer:
Working Capital = Current Assets - Current Liabilities
Working Capital = 10,00,000 – 4,00,000
Working Capital = 6,00,000
Working Capital Turnover Ratio = Revenue from operation/ Working Capital
Working Capital Turnover Ratio = 24,00,000/ 6,00,000
Working Capital Turnover Ratio = 4 Times
Question 117:
From the following information, calculate Working Capital Turnover Ratio:
Cost of Revenue from Operations (Cost of Goods Sold) `5,00,000
Current Assets `2,50,000
Current Liabilities `1,50,000
Answer:
|
Working Capital |
= Current Assets + Current Liabilities |
|
|
= 2,50,000 + 1,50,000 |
|
|
= 1,00,000 |
|
Working Capital Turnover Ratio |
= Cost of Revenue from Operations/ Working Capital |
|
|
= 5,00,000/1,00,000 |
|
|
= 5 Times |
Question 118:
Revenue from Operations: Cash Sales ` 5,00,000; Credit Sales ` 6,00,000; Sales Return ` 1,00,000. Current Assets ` 3,00,000; Current Liabilities ` 1,00,000. Calculate Working Capital Turnover Ratio.
Answer:
Net Sales = Cash Sales + Credit Sales − Sales Returns
= 5,00,000 + 6,00,000 − 1,00,000 = 10,00,000
Working Capital= Current Assets - Current Liabilities
Working Capital Turnover= Net sales/ Working Capital
=10,00,000/2,00,000
= 5 Times
Question 119:
Equity Share Capital ` 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales 33 1/3% ; Cost Revenue from Operations or Cost of Goods Sold ` 20,00,000; Current Assets ` 10,00,000; Current Liabilities ` 2,50,000. Calculate Working Capital Turnover Ratio.
Answer:
Net Sales = Cost of Goods sold + Gross Profit
Net Sales =20,00,000+1/3 of Net Sales
Let Net Sales = x
x=20,00,000+ x/3
Net sales (x)= 60,00,000/2=30,00,000
Working Capital= Current Assets - Current Liabilities
=10,00,000-2,50,000
=7,50,000
Working Capital Turnover= Net sales/ Working Capital
=30,00,000/7,50,000 = 4 Times
Question 120:
Gross Profit at 25% on cost; Gross profit ` 5,00,000; Equity Share Capital ` 10,00,000; Reserves and Surplus 2,00,000; Long-term Loan 3,00,000; Fixed Assets (Net) ` 10,00,000. Calculate Working Capital Turnover Ratio
Answer:
Gross Profit = 25% on Cost
Let Cost be = ` x
Gross Profit =x×25/100=25x/100
Or, 5,00,000=25x/100
Or, x=5,00,000×100/25=20,00,000
∴ Cost of Goods
Sold = 20,00,000
Net sales =Cost of goods sold+Gross profit
=20,00,000+5,00,000=25,00,000
Capital employed =Equity share Capital +Reserve and surplus+long – term loan
=10,00,000+200,000+3,00,000=15,00,000
Working Capital = Capital employed- Fixed Assets
=15,00,000-10,00,000=5,00,000
Working Capital Turnover= Net sales/ Working Capital
=25,00,000/5,00,000