#### 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%

**Click on Below link for more questions Of Volume-3 of 12th**

## Chapter-4: Accounting Ratios | 2021-2022

**From Question No. 1 to 5**