Question
A company's working capital (WC) is ₹20 lakhs, and its
annual sales are ₹120 lakhs. What is the Working Capital Turnover Ratio?Solution
The Working Capital Turnover Ratio is calculated by dividing the annual sales by the working capital. In this case, ₹ 120 lakhs / ₹ 20 lakhs = 6 times. This ratio indicates how efficiently the company is using its working capital to generate sales.
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