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    Question

    Refer to the following information to answer the next 4 questions (Q15 to Q18):

    Calculate the Working Capital Turnover Ratio:

    A 8 Times Correct Answer Incorrect Answer
    B 10 Times Correct Answer Incorrect Answer
    C 5 Times Correct Answer Incorrect Answer
    D 12 Times Correct Answer Incorrect Answer
    E 6 Times Correct Answer Incorrect Answer

    Solution

    Working Capital Turnover Ratio = Net Sales / Working Capital =12,00,000/ 1,50,000   Working Capital = Current Assets – Current Liabilities = 2,10,000 – 60,000 = 1,50,000                   Current Assets: Closing Stock + Trade Receivables + Cash = 1,00,000 + 1,00,000 +10,000 = 2,10,000 Current Liabilities = Trade payables + Bank Overdraft = 40,000 + 20,000 = 60,000  

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