132 :- Shareholder’s Funds Rs 10,00,000; Long – term Debts Rs 20,00,000; Gross Profit at 20% on cost was Rs 20,00,000. Calculate Net Assets or Capital Employed Turnover Ratio.
Solution :-
Capital Employed = Shareholders Funds + Long-term Debts
Capital Employed = Rs 10,00,000 + Rs 20,00,000
Capital Employed = Rs 30,00,000
Gross Profit = 20 % on cost
Rs 20,00,000 = 20% on Cost
Cost of Revenue from operation = Rs 20,00,000 ✕ 100/20
Cost of Revenue from Operation = Rs 1,00,00,000
Revenue from operation = Cost of Revenue from Operation + Profit
Revenue from Operation = Rs 1,00,000,00 + 20,00,000
Revenue from Operation = Rs 1,20,00,000
Net Assets Turnover Ratio = Revenue from Operation/Capital Employed
Net Assets Turnover Ratio = 1,20,00,000/30,00,000
Net Assets Turnover Ratio = 4 Times