118 :- Equity Share Capital Rs 15,00,000; Gross Profit on Revenue from Operations,I.e, Net Sales 33 1/3%; Cost of Revenue from Operations or Cost of Goods Sold Rs 20,00,000; Current Assets Rs 10,00,000; Current Liabililities Rs 2,50,000. Calculate Working Capital Turnover Ratio.
Solution :-
Gross Profit = Revenue from Operations – Cost of Revenue from Operations
33 1/3% of x = x – 20,00,000
x – 1/3x = 20,00,000
x = 20,00,000 x 3/2
x = Rs 30,00,000
Revenue from Operations = Rs 30,00,000
Working Capital = Current Assets – Current Liabilities
= 10,00,000 – 2,50,000
= Rs 7,50,000
Working Capital Turnover Ratio = Net Revenue from Operations/Working Capital
= 30,00,000/7,50,000
= 4 Times