A firm rsquo s current assets are Rs3 60 000 current liabilities are Rs 1 20 000 Current from operat...........

A firm’s current assets are Rs3,60,000; current liabilities are Rs 1,20,000 Current from operations is Rs12,00,000. Its working capital tureover ratio is:

3 Times

5 Times

8 Times

4 Times

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Explanation:

- Working Capital Turnover Ratio: This measures how efficiently a company uses its working capital to generate revenue. It is calculated as Sales divided by Working Capital.

- Calculation:

- Current Assets = Rs. 3,60,000 & Current Liabilities = Rs 1,20,000

Working Capital = Current Assets - Current Liabilities.

- Working Capital = Rs. 3,60,000 - Rs. 1,20,000 = Rs. 2,40,000

- Sales (or Revenue) = Rs. 12,00,000

- Working Capital Turnover Ratio = Rs. 12,00,000 / Rs. 2,40,000 = 5 times