From the following information, calculate Working Capital Turnover Ratio : Gross Profit Ratio $\displaystyle 25$% Gross Profit ? $\displaystyle 5,00,000$ Shareholders Funds ₹ $\displaystyle 25,00,000$ Non-current liabilities ? $\displaystyle 8,00,000$ Non-current Assets ₹ $\displaystyle 23,00,000$

Working Capital Turnover Ratio = Revenue from Operations/ Working Capital ……. ½ Gross profit Ratio = Gross Profit/ Revenue from Operations x $\displaystyle 100$ $\displaystyle 25$ = ₹$\displaystyle 5,00,000$/ Revenue from Operations x $\displaystyle 100$ Revenue from Operations = ₹$\displaystyle 20,00,000$………………………………………. $\displaystyle 1$ Shareholders’ Funds + Non-Current Liabilities = Non-Current Assets + Working Capital ₹$\displaystyle 25,00,000$ + ₹$\displaystyle 8,00,000$ = ₹$\displaystyle 23,00,000$ + Working Capital Working Capital = ₹$\displaystyle 10,00,000$………………………………………………..….. $\displaystyle 1$ Working Capital Turnover Ratio. = ₹$\displaystyle 20,00,000$/ ₹$\displaystyle 10,00,000$ = $\displaystyle 2$ times……………………………………………. ½ Alternate Answer Working Capital Turnover Ratio = Cost of Revenue from Operations/ Working Capital ……. ½ Gross profit Ratio = Gross Profit/ Revenue from Operations x $\displaystyle 100$ $\displaystyle 25$ = ₹$\displaystyle 5,00,000$/ Revenue from Operations x $\displaystyle 100$ Revenue from Operations = ₹$\displaystyle 20,00,000$ Cost of Revenue from Operations= Revenue from Operations – Gross Profit =₹$\displaystyle 20,00,000$ – ₹$\displaystyle 5,00,000$ = ₹$\displaystyle 15,00,000$………………………………………. $\displaystyle 1$ Shareholders’ Funds + Non-Current Liabilities = Non-Current Assets + Working Capital ₹$\displaystyle 25,00,000$ + ₹$\displaystyle 8,00,000$ = ₹$\displaystyle 23,00,000$ + Working Capital Working Capital = ₹$\displaystyle 10,00,000$………………………………………………..….. $\displaystyle 1$ Working Capital Turnover Ratio = ₹$\displaystyle 15,00,000$/ ₹$\displaystyle 10,00,000$ = $\displaystyle 1.5$ times……………………………………………. $\displaystyle 1$ $\displaystyle 18$