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What will be the working capital ratio if:

ParticularsRs.
Cash1,00,000
Bills Receivable50,000
Sundry Debtors2,50,000
Stock2,00,000
Sundry creditors3,00,000
Cost of sales15,00,000

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Working Capital Turnover Ratio = Cost of sales / net working capital

Where Net Working Capital = Curent Assets – Current Liabilities

= Cash + Bills Recievable + Sundry Debtors + Stock – Sundry Creditors

= 1,00,000 + 50,000 + 2,50,000 + 2,00,000 – 3,00,000 

= 3,00,000

Working Capital Turnover Ratio = (15,00,000 / 3,00,000)

= 5 times

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