119 :- Capital Employed Rs 12,00,000; Net Fixed Assets Rs 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations Rs 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.
Solution :-
Gross Profit = Revenue from operation – Cost of Revenue from Operation
20% of 40,00,000 = Revenue from Operation – 40,00,000
8,00,000 = Revenue from operation – 40,00,000
Revenue from operation = Rs 48,00,000
Capital Employed + Current Liabilities = Net Fixed Assets + Current Assets
12,00,000 + Current Liabilities = 8,00,000 + Current Assets
Current Assets – Current Liabilities = 4,00,000
Working Capital = Rs 4,00,000
Working Capital Turnover Ratio = Net Revenue from Operation/Working Capital
= 48,00,000/4,00,000
= 12 Times