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Question 58 Chapter 14 of Class 12 Part – 2 – 2024
Working Capital Turnover Ratio
58. (Working Capital T/0 Ratio from Cost of Sales) Find out the working capital turnover ratio.
| ₹ | |
| Cash | 10,000 |
| Trade receivables | 30,000 |
| Inventory | 10,000 |
| Input IGST | 10,000 |
| Trade payable | 30,000 |
| Cost of sales | 1,50,000 |
| Working Capital Turnover Ratio | = | Cost of Revenue from Operation* |
| Working Capital | ||
| Cost of sales | = | ₹ 1,50,000 |
| Working Capital | = | Current Assets – Current Liabilities |
| = | Cash + Trade receivables + Inventory + Input IGST | |
| = | ₹ 10,000 + ₹ 30,000 + ₹ 10,000 + ₹ 10,000 | |
| = | ₹ 60,000 | |
| Current Liabilities | = | Trade Payable |
| = | ₹ 30,000 | |
| Working Capital | = | ₹ 60,000 - ₹ 30,000 |
| = | ₹ 30,000 | |
| = | ₹ 1,50,000 | |
| Working Capital Turnover Ratio | ₹ 30,000 | |
| = | 5 times |
*In this question sales or revenue from the operation is not given, to solve this question Cost of sales is taken for the calculation of the ratio.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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