Question : What does a low Working Capital Turnover Ratio indicate?

Option 1: Indication of inefficiency of working capital management.

Option 2: Indication of efficiency of working capital management

Option 3: Proper mutilation of resources

Option 4: None of the above


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 6th Jan, 2024

Correct Answer: Indication of inefficiency of working capital management.


Solution : Answer = Indication of inefficiency of working capital management.

A low Working Capital Turnover Ratio indicates inefficiency in working capital management. It suggests that the company is not effectively utilizing its working capital to support sales, potentially leading to liquidity problems. This ratio reflects how well a company uses its working capital to sustain sales levels.
Hence, the correct option is 1.

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