The correct answer is A. 2.06.
Current assets turnover is a measure of how efficiently a company uses its current assets to generate sales. It is calculated by dividing net sales by average current assets.
In this case, net sales are not given, so we can use the following formula to estimate them:
Net sales = Cost of goods sold + Gross profit
Cost of goods sold = Stock * Stock turnover
Gross profit = Sales – Cost of goods sold
Sales = Cost of goods sold + Gross profit
Sales = Stock * Stock turnover + Gross profit
We are given that stock = Rs. 14,000, stock turnover = 5 times, and gross profit = 15% of cost of goods sold. We can use these values to estimate sales as follows:
Sales = 14,000 * 5 + 0.15 * 14,000 * 5 = 140,000
We are also given that debtors = Rs. 20,000 and creditors = Rs. 20,000. We can use these values to calculate average current assets as follows:
Average current assets = (Debtors + Creditors) / 2 = (20,000 + 20,000) / 2 = 15,000
Therefore, current assets turnover = 140,000 / 15,000 = 2.06.
Option B is incorrect because it is the current ratio, which is calculated by dividing current assets by current liabilities.
Option C is incorrect because it is the debt-to-equity ratio, which is calculated by dividing total debt by total equity.
Option D is incorrect because it is the return on assets, which is calculated by dividing net income by average total assets.