Read the following information and answer the question.
| PARTICULARS | AMOUNT ( ₹) |
| Cost of revenue from operations | 18,00,000 |
| Inventory | 3,60,000 |
| Trade receivables | 1,70,000 |
| Marketable securities | 50,000 |
| Cash and bank balance | 20,000 |
| Trade payables | 1,40,000 |
| Provision for tax | 10,000 |
Calculate working capital turnover ratio if revenue from operations ₹36,00,000.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 8 times.
Working capital = current asset - current liabilities
= 6,00,000 - 1,50,000
= ₹4,50,000
Working Capital Turnover Ratio = Revenue from Operation / Working Capital
= 36,00,000 / 4,50,000
= 8 times