1.

Sharholders Funds ₹ 10,00,000, Long -term Debts ₹ 20,00,000 Gross Profit at 20 % on Cost was ₹ 20,000,000.Calculate Capital Employed Turnover Ratio.

Answer» Capital Employed Turnover Ratio` =("Revenue from Operations ")/("Capital Employed")`
`=(₹ 1,20,00,000)/(₹ 30,00,000)`=4 Times
Capital Employed =ShareholdersFunds+Long-term Debts
= ₹ 10,00,000+ ₹ 20,00,000= ₹ 30,00,000.
Calculations of Revenue from Operations (Net Sales)
If Cost is ₹ 100,Gross Profit=₹ then Revenue from Operations = ₹ 100 + ₹ 20 = ₹ 120
If Gross profit is ₹ 20 then Revenue from Operations = ₹ 120
If Gross Profit is ₹ 20 ,00,000, then Revenue from Operations `=(₹ 100)/(₹ 20 )xx ₹ 20,00,000=₹ 1,20,00,000`.


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