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

State direct material cost standard, State Direct material cost standard ...

State Direct material cost standard The determination of direct material cost standard would involve: a) Determination of quantity standards and b) Determination of pric

What is the scope of waste heat boilers, What is the Scope of Waste heat bo...

What is the Scope of Waste heat boilers This specification covers the minimum requirements for the design, material selections, fabrication, testing and inspection of shop- / o

Information system project management, Hi there, i am looking an expert to ...

Hi there, i am looking an expert to make my assignments for this subject and i do have other subjects as well. Let me know how you can go through my assignment.

Explain discretionary fixed costs and semi variable costs, Discretionary fi...

Discretionary fixed costs and Semi variable costs Discretionary fixed costs are those which are incurred as a result of management discretion. These costs have two importan

Annual cash flows over the expected life of the equipment, The production d...

The production department has been investigating possible ways to trim total production costs. One possibility currently being examined is to make the paint cans instead of purchas

Capital budgeting – planning investments, The management of Popular Stores ...

The management of Popular Stores Sdn. Bhd. are in the process of exploring the company’s investment opportunities.

Explain cost flow in activity based costing, Normal 0 false f...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

C-v-p analysis under uncertainty, C-V-P ANALYSIS UNDER UNCERTAINTY A ma...

C-V-P ANALYSIS UNDER UNCERTAINTY A major limitation of the basic C.V.P analysis is the assumption that the unit variable cost, selling price and the fixed costs are constant an

Explain the stock turnover ratio, Stock turnover ratio  Meaning: thi...

Stock turnover ratio  Meaning: this ratio establishes a relation ship between costs of goods sold and average inventory. Objective: the objective of component of this r

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