Question 126:

Capital Employed 30,00,000; Working Capital 5,00,000; Cost of Revenue from Operations 40,00,000;

Gross Profit 25% of Cost. Calculate Fixed Assets Turnover Ratio.

Answer:

Net Assets Turnover Ratio= Revenue from Operations/Capital Employed

Net Assets Turnover Ratio= 50,00,000/25,00,000= 2 Times

Working Notes:

Net fixed assets=30,00,000-5,00,000=25,00,000

Gross Profit = 25% of 40,00,000 = 10,00,000

Revenue= Cost + Gross Profit

Revenue= 40,00,000+10,00,000 = 50,00,000

 

Question 127: Following information is of Raja Ltd. for 2 yea ₹Calculate Fixed Assets Turnover Ratio:

 

Answer:

Fixed Assets Turnover Ratio= Revenue from Operations/Net Fixed Assets

2021-22

Fixed Assets Turnover Ratio= 12,00,000/ 3,00,000 = 4 Times

2022-23

Fixed Assets Turnover Ratio= 18,00,000/ 6,00,000= 3 Times

 

 

Net Assets Turnover Ratio

Question 128:

Based on the following information, calculate Net Assets or Capital Employed Turnover Ratio:

Shareholders' Funds ₹20,00,000; Equity Share Capital ₹10,00,000; Reserves and Surplus ₹10,00,000;

8% Debentures ₹10,00,000 and Revenue from Operations ₹75,00,000.

Answer:

Capital Employed Turnover Ratio=Revenue from Operations/Capital Employed

Capital Employed Turnover Ratio=75,00,000/30,00,000

Capital Employed Turnover Ratio=2.5 Times

Working note:

1.     Revenue from Operations = ₹75,00,000.

2.     Capital Employed= Shareholders' Funds + 8% Debentures

Capital        Employed=20,00,000 +10,00,000

 

Question 129:

From the following information, calculate Net Assets Turnover Ratio:

Equity Share Capital ₹15,00,000; Long-term Borrowings ₹30,00,000; Reserves and Surplus ₹5,00,000;

Non-current Assets ₹32,00,000; Revenue from Operations ₹1,00,00,000.

 

Answer:

Calculate Net Asset (Capital Employeed):

Net Assets = Equity Share Capital + Reserves and Surplus + Long-term Borrowings − Non-current Assets

Net Assets = (15,00,000+5,00,000+30,00,000

Net Assets = ₹50,00,000

 

Formula:

Net Assets Turnover Ratio= Revenue from Operations​ ÷ Net Assets

Net Assets Turnover Ratio= 1,00,00,000​ ÷ 50,00,000 = 2 Times

 

Question 130:

Property, Plant and Equipment and Intangible Assets (at cost) ₹30,00,000; Accumulated Depreciation ₹5,00,000; Trade Investments ₹2,50,000; Current Assets ₹11,00,000; Current Liabilities ₹8,50,000; Cash Revenue from Operations ₹10,00,000; Credit Revenue from Operations ₹40,00,000.

Calculate Net Assets Turnover Ratio.

Answer:

Capital Employed Turnover Ratio=Revenue from Operations/Capital Employed

Capital Employed Turnover Ratio=50,00,000/30,00,000

Capital Employed Turnover Ratio=1.67 Times

Working note:

1.     Revenue from Operations = Cash Revenue from Operations + Credit Revenue from Operations

Revenue from Operations= 10,00,000+40,00,000=50,00,000

2.     Capital Employed= (Property, Plant and Equipment and Intangible Assets (at cost) -Accumulated Depreciation) +Trade Investments +Working Capital

Capital Employed= (30,00,000-5,00,000)+2,50,000+2,50,000

Capital Employed=30,00,000

 

3.     Working Capital=Current Assets - Current Liabilities

Working Capital=11,00,000- 8,50,000=2,50,000