Answer / chalapathi rao govada

Turnover Ratio stnds for one balance sheet element is going
to be expressed interms of Net sales of the such
organisation.

The main logic behind calculating the Turnover ratios is to
know how many times such organisation had the sales when
compared to Balance sheet item.

Eg: Inventory Turnover Ratio:

The purpose of it is to know how many times we are able to
generate the sale compared to the closing stock ie B/S item.

Formula:

ITR = Cost of Goods sold/Average inventory

Fixed Assets Turnover Ratio: Net sales/Fixed Assets.

Working capital Turnover Ratio: Net sales/Net working
capital

Answer / ravi

if it is inventory turn over ratio then = c.o.g.s/avg stock
where as c.o.g.s = op.stock+purchases+d.exp-c.stock
if it is debtor turn over ratio = cr sales/ avg
receivables where as average receivables =
opening+closing/2 if closing is not given take the amount
which was given directly

Answer / nehal k.ruparel

Turnover ratios measure the degree to which assets are
efficiently employed in a firm. These Ratios are also known
as Activity Ratios or Asset Management Ratios. These Ratios
are very important for a business concern to find out how
well the facilities at the disposal of the concern are
being used. These Ratios are usually calculated on the
basis of sales or cost of goods sold. High Turnover Ratios
indicate better utilization of resources.

Answer / srinivas

if if it is inventory turnover ratio Turnover/Average
inventory

if it is debtors turnover ratio, turnover/debtors

Answer / manish kumar dahinwal

A measure of the number of times a company's inventory is
replaced during a given time period. Turnover ratio is
calculated as cost of goods sold divided by average
inventory during the time period. A high turnover ratio is
a sign that the company is producing and selling its goods
or services very quickly.
Thus turnover is the measure of the profit making of the
company and the unit by which we can come to know what we
had in the beginning of the financial year and what we have
at the time of closing of the books of accounts,in monetary
terms.

Alpha Co. issued to the public for subscription 40000 shares of rs 10 each at discount of 10%payable as rs. 2 each on application, allotment and first call and rs.3 on the final call. Applications were received for 60000 shares and allotment was made pro-rata to 80% of applicants. R to whom 2000 shares were allotted paid only the application money, and S who had applied for 3000 shares,paid the entire call money due along with the allotment. pass journal entries to record the above transaction.

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