Question
106:
Capital Employed ` 12,00,000; Net Fixed Assets 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations ` 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.
Answer:
Cost of Goods Sold = 40,00,000
Gross Profit = 20% of Cost
Gross Profit =20/100×40,00,000=8,00,000
|
Total Sales |
= Cost of goods sold + Gross profit |
|
|
=40,00,000+8,00,000 =48,00,000 |
|
Working Capital |
= Capital employed – Net Fixed Assets =12,00,000-8,00,000 =4,00,000 |
|
Working Capital turnover ratio |
= Net sales /Working Capital |
|
|
=48,00,000/4,00,000 |
|
|
= 12 Times |
Question
107:
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
Question
108:
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
Question
109
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.
Question
110:
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%
Class : 12th | Ts Grewal solution 2022-2023
Volume 3 | Chapter 4: Accounting Ratio
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