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Revenue from Operations: Cash Sales Rs. 5,00,000; Credit Sales Rs. 6,00,000; Sales Return Rs. 1,00,000. Current Assets Rs. 3,00,000; Current Liabilities Rs. 1,00,000. Calculate Working Capital Turnover Ratio.

SOLUTION

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

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