Working capital Rs 250000, cost of revenue form operationn (cost of goods sold ) Rs 1000000, gross profit on sales 20%. Calculate working capital turnover ratio from the above information.

Explanation

Calculation of revenue from opertion i.e net sales:
Let sales =Rs 100, profit 20% on slaes =Rs 20, Therefore , cost =Rs 80
when cost is Rs 80 then slaes =Rs 100
When cost is Rs 1 then sales `=Rs 100//Rs 80`
When cost is Rs 1000000 then sales =`Rs 100//Rs 80xxRs 100000=Rs 1250000`
working capital trunover ratio=`("Revenue operations(net sales)")/("working capital")`
`(Rs 1250000)/(Rs 250000)=5`times.