![]() At the beginning of the financial year, Accounts Receivables were $ 2,500, and at the end, accounts receivables were $ 3,500. Let us take another example of a company which is having net credit sales worth $ 60,000 during one financial year. Working Capital Turnover Ratio of six times shows that sales in 6 times that of employed assets of working capital should be compared to the previous year’s data as well as other players in the industry to get a better sense. Working Capital Turnover Ratio = 6 Times.Working Capital Turnover Ratio = 15,000 / 2,500.Working Capital Turnover Ratio = Net Sales / Working Capital Working Capital Turnover Ratio is calculated using the formula given below. Working Capital = Current Assets – Current Liabilities Working Capital is calculated using the formula given below What is the Working Capital Turnover ratio of the company? Whose revenue from operations or net sales for a period is $ 15,000, and its current assets and current liabilities for the period are $ 10,000 and $ 7,500, respectively. Let us take another example of a company Mobility Inc. It shows that the inventory turnover ratio is 3 times, and it should be compared to the previous year’s data as well as other players in the industry to get a better sense. Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory Inventory Turnover Ratio is calculated using the formula given below Cost of Goods Sold = 2,000+ 16,000 – 6,000Īverage Inventory is calculated using the formula given belowĪverage Inventory = (Opening Inventory + Closing Inventory) / 2. ![]() Cost of Goods Sold is calculated using the formula given belowĬost of Goods Sold = Opening Inventory + Purchases – Closing Inventory
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