What does a low working capital turnover ratio indicate?

Under utilization of working capital

The correct answer is option 2- Under utilization of working capital.

Working Capital Turnover Ratio = Net Revenue from Operation /Working Capital.

The Working Capital Turnover Ratio measures how efficiently a company uses its working capital to generate revenue. Low Working Capital Turnover Ratio Means The company is generating less revenue per unit of working capital, Indicates inefficiency or under-utilization of working capital, Too much money might be tied up in inventory or receivables, reducing liquidity and profitability.

High turnover of capital employed, working capital and fixed assets is a good sign and implies efficient utilisation of resources. Utilisation of capital employed or, for that matter, any of its components is revealed by the turnover ratios. Higher turnover reflects efficient utilisation resulting in higher liquidity and profitability in the business.