On the basis of information given below calculate:
(i) Gross profit ratio , (ii) Inventory Turnover Ratio, (iii) Debt to Equity and , (iv) Working Capital Turnover Ratio.
Information: Revenue from operation Rs 787500 Cost of revenue form operations (Cost of goods sold) Rs 395600 , Current Liabilities Rs 237000, Long term loan Rs 87000, Current Assets Rs 399000, Equity share capital Rs 375000, 8% Debentures Rs 125000 and Average Inventory Rs 197800.

Explanation

(i) Gross profit ratio=`("Gross profit")/("revenue from operations")xx100=(Rs 391900)/(Rs 787500)xx100=49.76%`
(ii)Inventory Turnover ratio =`("Cost of revenue from operations")/("Average inventory")=(Rs 395600)/(Rs 197800)`
= Times
(iii)Debt to Equity Ratio =`("Debt")/("Shareholder funds")`
`=(Rs 87000+ Rs 125000)/(Rs 375000)=(Rs 212000)/(Rs 375000)=0.57:1`
(iv) Working capital turnover ratio
=(Cost of revenue from operations) `("cost of goods sold")/("Working capitl")`
`=(Rs 395600)/(Rs 3999000-Rs 237000)=2.44 Times`
Woking capital current assets -current liabilites.