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Low ‘Working Capital Turnover Ratio’ indicates:
  • a)
    There is no working capital
  • b)
    Over-utilization of working capital
  • c)
    No use of working capital
  • d)
    Under-utilization of working capital
Correct answer is 'D'. Can you explain this answer?
Verified Answer
Low ‘Working Capital Turnover Ratio’ indicates:a)There is ...
Low working capital turnover ratio indicates that the working capital of business is under-utilized. It means firm is not using its working capital effectively and efficiently.
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Most Upvoted Answer
Low ‘Working Capital Turnover Ratio’ indicates:a)There is ...
Working capital is current assets minus current liabilities. Conversely, a low ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales, which could eventually lead to an excessive amount of bad debts and obsolete inventory.

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Low ‘Working Capital Turnover Ratio’ indicates:a)There is no working capitalb)Over-utilization of working capitalc)No use of working capitald)Under-utilization of working capitalCorrect answer is 'D'. Can you explain this answer?
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