Calculate Working Capital Turnover Ratio from the following information: Revenue from Operations Rs. 30,00,000; Current Assets Rs. 12,50,000; Total Assets Rs. 20,00,000; Non-current Liabilities Rs. 10,00,000, Shareholders’ Funds Rs. 5,00,000.

SOLUTION

Working Capital Turnover Ratio = Revenue from Operations (Net Sales)/Working Capital
= Rs. 30,00,000 

(Given)Working Capital = Current Assets-Current Liabilities Current Assets
= 12,50,000 

(Given)Current Liabilities = ?
Total Assets = Total Liabilities = Rs. 20,00,000 
(Given)Total Liability = Shareholders’ Funds + Non-Current Liabilities + Current Liabilities
20,00,000 = 5,00,000 + 10,00,000 + Current Liabilities

Current Liability = 20,00,000 – 15,00,000
= Rs. 5,00,000

Working Capital = 12,50,000-5,00,000
= Rs. 7,50,000


Working Capital Turnover Ratio = 30,00,000 / 7,50,000
= 4 times

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