Practice Working Capital Turnover Ratio - 1.4.3.4 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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1.4.3.4 - Working Capital Turnover Ratio

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for calculating the Working Capital Turnover Ratio?

💡 Hint: Recall the formula we discussed during the sessions.

Question 2

Easy

Define current assets.

💡 Hint: Think of examples like cash and inventory.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What does a high Working Capital Turnover Ratio indicate?

  • Inefficient use of capital
  • High efficiency in sales generation
  • Excess inventory

💡 Hint: Think about what the ratio measures.

Question 2

True or False: A low Working Capital Turnover Ratio always indicates poor financial health.

  • True
  • False

💡 Hint: Reflect on industry comparisons we discussed.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has net sales of ₹1,500,000 and current assets of ₹750,000 with current liabilities of ₹250,000. Calculate the Working Capital Turnover Ratio and analyze the significance of the result.

💡 Hint: Break down the ratios step-by-step for clarity.

Question 2

Company X has a very high Working Capital Turnover Ratio of 12 while company Y stands at 2. Discuss the potential risks and rewards of such ratios in terms of liquidity and operational strategy.

💡 Hint: Contrast between high efficiency and the risks of not maintaining adequate reserves.

Challenge and get performance evaluation