Which one of the following is correct i Working Capital Turnover Ratio establishes a relationship be...........

Which one of the following is correct?

(i) Working Capital Turnover Ratio establishes a relationship between net Revenue from Operations and working capital of a company.

(ii) Inventory Turnover Ratio ==Revenue from Operations/ Working Capital

(iii) The higher the Inventory Turnover Ratio, the better it is.

(iv) A Higher Inventory Turnover Ratio always means higher profits.

Choose the correct option:

Only (i) and (ii)

Only (i) and (iii)

Only (ii), (iii) and (iv)

All (i), (ii), (iii) and (iv)

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Explanation:

- (i): Working Capital Turnover Ratio does indeed establish a relationship between net Revenue from Operations and working capital of a company. This is correct.

- (ii): Inventory Turnover Ratio is not calculated as Revenue from Operations divided by Working Capital. It's actually calculated as Cost of Goods Sold divided by Average Inventory. This statement is incorrect.

- (iii): A higher Inventory Turnover Ratio generally indicates better efficiency in managing inventory, which is favorable. This statement is correct.

- (iv): A Higher Inventory Turnover Ratio doesn't always mean higher profits. It could indicate understocking or missed sales. This is incorrect.

Based on the above explanation, Option 2: Only (i) and (iii) is correct.