State the working capital turnover ratio, Managerial Accounting

Assignment Help:

State the Working capital turnover ratio

 Meaning: this ratio establishes a relation ship among net sales and working capital.

Working capital turnover ratio shows the velocity of the utilization of net working capital. This ratio shows the number of times the working capital is turnover in the course of a year. This ratio calculates the efficiency with which the working capital is being used by a firm.

The components of this ratio are as under:

Net sales

Working capital

Computation: this ratio is computed by dividing the net sales by the working capital. This ratio is usually expressed as x number of times. In the form of a formula this ratio may be expressed as under:

Working capital turnover ratio=net sales /working capital

Net sales= gross sales -sales return

Interpretation: it shows the firm ability to generate sales per rupee of working capital. In general higher the ratio the more able the management and utilization of working capital and vice versa.

 


Related Discussions:- State the working capital turnover ratio

Explian national income and economic welfare, Question 1: (a) Discuss t...

Question 1: (a) Discuss the main features and problems which Mauritius has to face as a small island developing country. (b) What are the factors which have led to the f

Impact of Cost Structure., You are required to provide a report of approx 5...

You are required to provide a report of approx 500 words or less (excluding attachments and references), accompanied by relevant calculations, in MS Word, MS Excel and/or PDF forma

What is pricing decision, Introduction to pricing decision A pricing d...

Introduction to pricing decision A pricing decision is one of the most crucial and difficult decision that a firm has to make. It is one of the most difficult decisions. Such

[email protected], Why might managers favour this ABC system instea...

Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct? labour?

What are the changing role of management accounting, What are the Changing ...

What are the Changing role of management accounting 1. Focus on customer scarification: customer satisfactions are continuously gaining high priority in management thinking i

Suppliers line of credit, In this scheme, non-revolving line of credit is e...

In this scheme, non-revolving line of credit is extended to the seller to be utilized inside a stipulated period. Assistance is provided to manufactures for promoting sale of their

Transportation problem-solution, Transportation Problem-Solution Soluti...

Transportation Problem-Solution Solution of the Transportation Problem: The fundamental steps of the transportation method are: Step 1:       Determine a preliminary b

Marginal & absorption costing, select any manufacturing company of your cho...

select any manufacturing company of your choice that produces any product. describe and compare the marginal and absorption costing system used in the selected company

Control-role of management accountant , Control Control includes a ...

Control Control includes a comparison of actual performance with the plan so that deviation from the plan can be identified and corrective action taken. It can be define

Management accounting influence, Management Accounting Influence (A) ...

Management Accounting Influence (A) Transfer pricing and performance measurement relies upon the judgment of the management accountant to make a suitable choice of approach

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd