Shareholder’s Funds ₹ 10,00,000; Long-term Debts ₹ 20,00,000; Gros Profit at 20% on Cost was ₹ 20,00,000. Calculate Net Assets or Capital Employed Turnover Ratio.
Shareholder’s Funds ₹ 10,00,000; Long-term Debts ₹ 20,00,000; Gros Profit at 20% on Cost was ₹ 20,00,000. Calculate Net Assets or Capital Employed Turnover Ratio.
[Ans.: 4 Times.]
Anurag Pathak Changed status to publish August 15, 2023
Solution:-
Capital Employed = Shareholders Funds + Long-term Debts
Capital Employed = ₹ 10,00,000 + ₹ 20,00,000
Capital Employed = ₹ 30,00,000
Gross Profit = 20 % on cost
₹ 20,00,000 = 20% on Cost
Cost of Revenue from operation = ₹ 20,00,000 ✕ 100/20
Cost of Revenue from Operation = ₹ 1,00,00,000
Revenue from operation = Cost of Revenue from Operation + Profit
Revenue from Operation = ₹ 1,00,000,00 + 20,00,000
Revenue from Operation = ₹ 1,20,00,000
Net Assets Turnover Ratio = 1,20,00,000/30,00,000
Net Assets Turnover Ratio = 4 Times
Net Assets Turnover Ratio = Revenue from Operation/Capital Employed
Anurag Pathak Changed status to publish December 11, 2023
