Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting Ratios

Question:

From the following information Calculate Working Capital Turnover Ratio
Current Ratio - 2.5:1
Current Liabilities - 20,000
Revenue from Operation - 90,000

Options:

4.5 times

3 times

1.8 times

2 times

Correct Answer:

3 times

Explanation:

W.C.T.R = Revenue From Operation/ Working Capital
            = 90,000/30,000
            = 3 times
W.C = CA -CL
       = 50,000 - 20,000
        = 30000
CA = C L * 2.5
     = 20,000*2.5
     = 50,000