formula for capital turnover ratio

Answer Posted / h.r. sreepada bhagi

Answer by Mr. Niraj Kuamr is correct.

CTR = Net Sales / Capital Employed. Here Capital can be
referred to networth or total long term funds.

1. Capital Employed = Share Capital + All Reserves = Networth
2. Capital Employed = Networth + Long Term Borrowings.

This ratio shows how many times the average capital employed
or the long term funds (average) turned over in the form of
revenue (Sales/Service Income or Turn Over).

Here the term sales is inclusive & refers to both the Sale
of Products & Sale of Services.

Is This Answer Correct ?    32 Yes 4 No



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