Page No
4.116:
Question
111:
Calculate Working Capital Turnover Ratio from the following
information:
Revenue from Operations
` 15,00,000; Current Assets `
6,25,000; Total Assets
` 10,00,000; Non-current Liabilities `
5,00,000, Shareholders' Funds ` 2,50,000.
Answer:
Working Capital Turnover Ratio
= Net Sales/Working Capital
Revenue from Operations (Net Sales)
= ` 15,00,000
(Given)Working Capital=Current Assets-Current Liabilities
Current Assets
= 6,25,000
(Given)Current Liabilities=
?
Total Assets
= Total Liabilities = ` 10,00,000
(Given)Total Liabilities
= Shareholders' Funds + Non-Current Liabilities +
Current Liabilities
10,00,000
=2,50,000+5,00,000+Current Liabilities
Current Liabilities
= ` 2,50,000
Working Capital=6,25,000-2,50,000=
` 3,75,000
Working Capital Turnover Ratio=15,00,000/3,75,000
Working Capital Turnover Ratio
=4 times
Page No
4.116:
Question
112:
A company earns Gross Profit of 25% on cost. For the year
ended 31st March, 2017 its Gross Profit was ` 5,00,000; Equity Share Capital of the company was ` 10,00,000; Reserves
and Surplus ` 2,00,000; Long-term
Loan ` 3,00,000 and
Non-current Assets were ` 10,00,000.
Compute the 'Working Capital Turnover Ratio' of the company.
Answer:
Working Capital Turnover Ratio= Revenue from Operation/Working
Capital
Gross Profit = 25% on Cost
Let Cost of Goods sold be ` 100.
Gross Profit = ` 25
Revenue from Operations = ` (100 + 25) = ` 125
When Gross profit is ` 25, revenue from operations is= ` 125
And, if Gross profit is ` 5,00,000 then revenue from operations will be= ` (5,00,000 × 125/25) = ` 25,00,000
Capital Employed = Shareholder’s Funds + Non-Current Liabilities
= ` (10,00,000 + 2,00,000 + 3,00,000) = ` 15,00,000
Also, Capital Employed = Non Current Assets + Working Capital
Alternatively, Working Capital = Capital Employed – Non-current Assets = ` (15,00,000 – 10,00,000)= ` 5,00,000
Hence, Working Capital Turnover Ratio= 25,00,000/5,00,000= 5 times
page No
4.116:
Question
113:
Compute Gross Profit Ratio from the following information:
Cost of Revenue from Operations (Cost of Goods Sold) `5,40,000;
Revenue from Operations (Net Sales) `6,00,000.
Answer:
Gross
Profit = Revenue from Operations – Cost of Revenue from Operations
= 6,00,000 – 5,40,000
= ` 60,000
Gross Profit Ratio = Gross Profit Revenue from Operations × 100
= 60,0006,00,000 × 100
= 10%
page No
4.116:
Question
114:
From the following, calculate Gross Profit Ratio:
Gross Profit: `50,000; Revenue from Operations `5,00,000; Sales
Return: `50,000.
Answer:
Net Sales = ` 5,00,000
Gross Profit = ` 50,000
Gross Profit Ratio = Gross Profit / Net Sales × 100
= 50,000/5,00,000 × 100 = 10%
Note: Here we will not deduct the amount of sales return because the amount of net sales has already been provided in the question.
page No
4.116:
Question
115:
Compute Gross Profit Ratio from the following information:
Revenue from Operations, i.e., Net Sales = `4,00,000; Gross
Profit 25% on Cost.
Answer:
Gross Profit 25% on Cost.
Let
Cost = x
Gross Profit = x × 25/00=25x/100
Sales = Cost + Gross Profit
4,00,000 =x+ 25x/100
Or, 4,00,000 = 125x/100
Or, x= 4,00,000×100/125 = 3,20,000
Cost = x = ` 3,20,000
Gross profit = Sales – Cost
Gross profit ratio= Gross profit /
Net Sales ×100
= 80,000×100/4,00,000=20%
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