(vi) Sales Ratios () Sales to fixed assets or fixed assets turnover ratio: Net Sales Net Fixed Assets 36,00,000 = 3.75 times. 1,60,000 (ii) Sales to net worth: Sales Capital Net Worth 36,00,000 2,60.000 2.3 times. (i) Sales to working capital or working capital turnover ratio: Sales Working Capital 144 36,00.000 -3.75 times. 1,60,000 (vii) Operating Ratio Operating Ratio Cost of Goods Sold + Operating Expenses x 100 Sales 3,60,000+ 21,56,000 x 100 = 86% 6,00.000 (viii) Profit Ratios () Gross Profit Ratio Gross Profit Net Sales 52,40,000 100 = x 100 = 40% 26,00,000 (ii) Net Profit Ratio Net Operating Profit 284,000 x 100 = x 100 = 14% Net Sales 36,00,000 It should be noted that fixed interest charges are not considered as a charge against net operating profits. Some writers calculate this ratio with net income (including non-operating items). In both cases income tax is ignored. You are given the following figures: Current ratio Liquidity ratio 2.5 1.5