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

Transfer pricing with third party consequences, Transfer pricing with third...

Transfer pricing with third party consequences Transfer prices are used not only for internal record keeping and performance evaluation purposes. There are several settings

Disadvantages of participatory budgets , Disadvantages of participatory bud...

Disadvantages of participatory budgets   They consume more time and therefore are more expensive The advantage of management participation may be negated by failure t

Include specific technologies to support your point, Winner says, "It is cl...

Winner says, "It is clear that in decades to come a great many things like telephone answer machines and automatic bank tellers will become, in effect, members of our society." Mor

Extensions to linear programming, Extensions to Linear Programming In man...

Extensions to Linear Programming In many real situations the solutions to linear programming models make sense only if they have integer values. Rounding off the linear programmi

Managerial accounting, Weldon Industrial Gas Corporation supplies acetylene...

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store''s operations follow: 500 Garrison, Managerial Accounting, 12t

Hold-up problem or another problem, According to the Philadelphia Inquirer,...

According to the Philadelphia Inquirer, in 2004 the city of Philadelphia planned to spend $14 million to convert the Convention Center into an appropriate venue for the Republican

Dominance, DOMINANCE Dominance strategy is useful for reducing the size...

DOMINANCE Dominance strategy is useful for reducing the size of the payoff table. Rules of Dominance: 1) If all the elements in a column are greater than or equal to the

What is management accounting, Question 1 The following items are found in...

Question 1 The following items are found in the trial balance of M/s Sharada Enterprise on 31st December, 2000. Sundry Debtors

Define the modes of hybrid instrument, Define the modes of Hybrid Instrumen...

Define the modes of Hybrid Instrument? 1. What are a variety of investment risks. Describe them. 2. Define the modes of Hybrid Instruments and clarify their features.

Costing, Costing Cost accounting can be described as the collectio...

Costing Cost accounting can be described as the collection, interpretation of cost and assignment. In succeeding chapters, you will learn about alternative costing techniq

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