NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5

NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5

Accounting, labelled as the “language of business”, measures and communicates the outcomes of an organisation’s economic operations to several stakeholders, including investors, creditors, managers, and regulators.

The Chapter Accounting Ratios is used to assess businesses’ solvency, efficiency, and profitability by analysing the information included in financial statements. These ratios provide customers with critical financial data and highlight areas that require further research.

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Key Topics Covered In NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5

Below is a list of primary topics covered in NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5- Accounting Ratios.

Meaning of Accounting Ratios
Types of Accounting Ratios
Objectives of Accounting Ratios
Computation of Liquidity Ratios
Methods of Expressing Accounting Ratios
Advantages and Disadvantages of Ratio Analysis
Limitations of Ratio Analysis

Let us dig into Extramarks detailed notes on each sub-topic in NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5- Accounting Ratios.

 

Meaning of Accounting Ratios

Accounting ratios, also known as financial ratios, calculate a company’s performance and profitability using its financial statements. They are the source of ratio analysis and articulate the relationship between one accounting data item and another.

In other terms, an accounting ratio is a quantitative agreement used for decision-making and analysis. It serves as the foundation for both intra- and inter-firm comparisons. Furthermore, the ratios are compared to base period ratios, average industry ratios, or criteria to make them more efficient.

 

Types of Accounting Ratios

Ratios can be Classified using one of two ways. The first is the traditional technique, where ratios are divided by the source of the accounting statement from where they are obtained. The second is functional distribution, which is based on the merits of financial ratios and their concept. Extramarks NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5 paints Financial ratios into two categories:

  • Traditional Classification
  • Functional Classification

The traditional division was based on financial statements, where the ratios’ determinants reside. The percentages are Classified as follows based on this principle:

 

  • Profit and Loss Ratio: A statement of P&L ratio is a ratio of two variables from the financial information of P&L. The gross profit ratio, for Example, is the proportion of gross profit to revenue from transactions. It is calculated using both data from the P&L statement.

 

  • Composite Ratio: A composite ratio is calculated using one variable from the P&L record and another from the B/S. For Example, the credit revenue of transactions to trade receivables ratio (also known as trade receivables turnover ratio) may be calculated using one statistic from the P&L (credit revenue from operations) and another figure from the B/S (trade receivables).

 

  • Balance sheet Ratio: B/S ratios are used when both variables come from the balance sheet. The current ratio, for Example, is the ratio of existing assets to current liabilities. It is calculated using both the B/S numbers.

Financial accounts, to which the determinants of ratios belong, are used to categorise the functional categories. The proportions are Classified as follows based on this principle:

 

  • Liquidity Ratios: An organisation must maintain a certain level of liquidity to pay overdue shares to shareholders. An enterprise’s assets cannot be firmed up. It must take care of its short-term liquidity. Such ratios aid in liquidity management, allowing the company to address any concerns.

 

  • Leverage Ratios: Leverage ratios determine a company’s capacity to pay down its long-term debt. As a result, they choose the relationship between the owner’s capital and the organisation’s obligation. They assess an enterprise’s long-term financial health and if it has enough assets to repay all of its shareholders and all liabilities on the B/S.

 

  • Profitability Ratios: Profitability ratios look at how much money a company makes. They link an enterprise’s profitability to its income, capital employed, and assets. These ratios reflect the company’s capacity to generate consistent returns on its invested capital. They also double-check the accuracy of the finance strategy and decisions.

 

  • Activity Ratios: Corporate performance may be calculated using activity ratios. They aid in determining a company’s resource usage effectiveness. They indicate how the company’s assets and sales are related. These ratios are most commonly referred to as turnover or performance ratios.

 

Objectives of Accounting Ratios

Extramarks NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5 presents details about the objectives of Accounting Ratios. Ratio analysis is an essential aspect of Examining the results revealed by financial statements. It provides customers with critical financial data and highlights areas that require further investigation. Ratio analysis is a strategy that involves organising information using arithmetical relationships, yet its interpretation is a difficult task. It necessitates a thorough understanding of the regulations that govern the preparation of financial statements. When done correctly, it provides a wealth of information to the analyst, including:

  •  The aspects of the trade that require additional focus.
  •  The Knowledge of the potential regions that may be developed with effort in the desired direction.
  •   The Examination of the trading firm’s liquidity, solvency, efficiency, and profitability levels.
  •   The Information for conducting a cross-sectional Examination by comparing achievement to viable business concepts.
  •  The financial statement data that can be used to make forecasts and estimates for the future.

 

Computation of Liquidity Ratios

Liquidity  The company’s capacity to satisfy short-term obligations.
Liquidity Ratio Calculating the liquidity ratio.
Types of Liquidity Ratio
  • Quick Ratio
  • Current Ratio
Current Ratio It is the connection between the company’s current assets and current liabilities.

Mathematically  it is expressed as:

Current Ratio= Current assets divided by Current liabilities

Quick Ratio It links a company’s liquid or fast assets and its current obligations.

Mathematically it is expressed as:

Quick Ratio= Liquid assets divided by Current liabilities

 

Advantages and Disadvantages of Ratio Analysis

In other words, ratio analysis is a way of analysing and comparing financial data by determining significant financial statement value percentages rather than comparing line items from each financial statement.

Extramarks NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5 highlights both advantages and disadvantages of Ratio Analysis. The following statements emphasise those points.

Advantages:

  • Trend analysis aids in forecasting and planning.
  • Analyses prior patterns to assist in forecasting the firm’s budget.
  • It aids in determining how well a company or organisation operates.
  • It offers consumers of accounting data and important information about the business’s performance.
  • It aids in the comparison of two or more businesses.
  • It assists in determining the firm’s liquidity and its long-term solvency.

Disadvantages:

  • Financial statements appear to be complicated.
  • Several organisations work in diverse companies, each with its own set of environmental elements such as market structure, regulation, etc. Such characteristics are significant enough to be challenging to compare two organisations from different sectors.
  • Views and hypotheses impact financial accounting data. Accounting criteria provide different accounting procedures, which lowers comparability and makes ratio analysis less useful in such situations.
  • Users are increasingly concerned about the present and future data. Hence ratio analysis shows the connections between earlier data and the present time data

 

Limitations of Ratio Analysis

The following are some limitations of Ratio Analysis:

  • If financial statements are not genuine and fair, the analysis will present a deceptive image of the situation.
  • It overlooks qualitative aspects that might influence decision-making.
  • Personal bias can be  present in ratio analysis.
  • Ratios cannot be compared if two organisations have distinct accounting procedures.

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Key Features of NCERT Solutions Class 12 Accountancy Company Accounts and Analysis of Financial Statements Chapter 5

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  • It covers all the chapter end questions along with their comprehensive answers explained in detailed with proper illustrations.
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Q.1 What do you mean by Ratio Analysis?

Ans. Ratio analysis refers to a technique of analysing the financial statements by computing various types of ratios. In other words, it is a process of determining and interpreting relationship between the items of financial statements to provide a meaningful result of the performance and financial position of a business.

Q.2 What are various types of ratios?

Ans. Accounting ratios are classified as follows:

  1. Profitability Ratios: They include Gross Profit Ratio, Net Profit Ratio, Operating Ratio, Operating Profit Ratio and Return on Investment Ratio.
  2. Turnover or Performance or Activity Ratios: These ratios comprise Inventory Turnover Ratio, Trade Receivables Turnover Ratio, Trade Payables Turnover Ratio and Working Capital Turnover Ratio.
  3. Solvency Ratios: They include Debt Equity Ratio, Total Assets to Debt Ratio, Proprietary Ratio and Interest Coverage Ratio.
  4. Liquidity Ratios: These ratios consist of Current Ratio and Liquid Ratio.

Q.3 What relationships will be established to study?

1. Inventory turnover
2. Trade receivables turnover
3. Trade payables turnover
4. Working capital turnover.

Ans.

1. Inventory turnover ratio establishes relationship between Cost of Revenue from Operations and Average Inventory.
2. Trade receivables turnover ratio establishes relationship between Net Credit Revenue from Operations and Average Trade Receivables.
3. Trade payable turnover ratio indicates the relationship between credit purchases and average trade payables.
4. Working capital turnover ratio establishes relationship between Revenue from Operations and Working Capital.

Q.4 The liquidity of a business firm is measured by its ability to satisfy its long-term obligations as they become due. What are the ratios used for this purpose?

Ans. Yes, it is true that the liquidity of a business firm is measured by its ability to pay its long term obligations as they become due. Here the long term obligation means payments of principal amount on the due date and payment of interest on the regular basis. For measuring the long term solvency of any business we calculate the following ratios:

  1. Debt-equity ratio
  2. Total assets to debt ratio
  3. Proprietary ratio and
  4. Interest coverage ratio

Q.5 The average age of inventory is viewed as the average length of time inventory is held by the firm for which explain with reasons.

Ans. Inventory Turnover Ratio: It determines the number of times inventory is converted into revenue from operations during the accounting period. The formula for its calculation is as follows:

Inventory Turnover Ratio = Cost of revenue from operations Average inventory MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@AB37@

It studies the frequency of conversion of inventory of finished goods into revenue from operations. It is also a measure of liquidity. It determines how many times inventory is purchased or replaced during a year.

Q.6 What are liquidity ratios? Discuss the importance of current and liquid ratio.

Ans. To meet its commitments, business needs liquid funds. The ability of the business to pay the amount due to stakeholders as and when it is due is known as liquidity, and the ratios calculated to measure it are known as ‘Liquidity Ratios’. These ratios are calculated to measure the short-term solvency of the business, i.e. the firm’s ability to meet its current obligations. Liquidity ratios include current ratio and liquid ratio.

Current Ratio: It indicates the amount of current assets available for repayment of current liabilities. Higher the ratio, the greater is the short term solvency of a firm and vice a versa. However, a very high ratio or very low ratio is a matter of concern. If the ratio is very high it means the current assets are lying idle. Very low ratio means the short term solvency of the firm is not good. Thus, the ideal current ratio of a company is 2:1 i.e. to repay current liabilities; there should be twice current assets.

Liquid ratio: This ratio establishes a relationship between liquid assets and current liabilities. Liquid ratio is a measure of the instant debt paying capacity of the business enterprise. It is a measure of the extent to which liquid resources are immediately available to meet current obligations. A quick ratio of 1:1 is considered good/favourable for a company. For the purpose of calculating this ratio, inventory and prepaid expenses are not taken into account as these may not be converted into cash in a very short period.

Q.7 How would you study the Solvency position of the firm?

Ans. The persons who have advanced money to the business on long-term basis are interested in safety of their periodic payment of interest as well as the repayment of principal amount at the end of the loan period. Solvency ratios are calculated to determine the ability of the business to service its debts in the long run. The following ratios are normally computed for evaluating solvency of the business.

1) Debt Equity Ratio: It is computed as follows:

Debt equity Ratio = Debt (Long term debts) Equity (Shareholders funds) MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=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@8003@

From the security point of view, capital structure with less debt and more equity is considered favourable as it reduces the chances of bankruptcy.

2) Total Assets to Debt Ratio: It is computed as follows:

Debt equity Ratio = Total Assets Debt (Long term debts) MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabeqaamaaeaqbaaGceaqabeaacaqGebGaaeyzaiaabkgacaqG0bGaaeiiaiaabwgacaqGXbGaaeyDaiaabMgacaqG0bGaaeyEaiaabccacaqGsbGaaeyyaiaabshacaqGPbGaae4BaiaabccacaqG9aGaaeiiamaalaaabaGaaeivaiaab+gacaqG0bGaaeyyaiaabYgacaaMc8UaaeiiaiaabgeacaqGZbGaae4CaiaabwgacaqG0bGaae4CaiaabccacaaMc8oabaGaaGPaVlaabseacaqGLbGaaeOyaiaabshacaqGGaGaaeiiaiaabIcacaqGmbGaae4Baiaab6gacaqGNbGaaeiiaiaabshacaqGLbGaaeOCaiaab2gacaqGGaGaaeizaiaabwgacaqGIbGaaeiDaiaabohacaqGPaGaaGPaVlaabccacaaMc8oaaaqaaiaabccaaaaa@75ED@

This ratio measures the extent of the coverage of long-term debts by assets which indicates the margin of safety available to providers of long-term loans.

3) Proprietary Ratio: It is computed as follows:

Proprietary Ratio = Shareholders’ Funds Total Assets MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabeqaamaaeaqbaaGcbaGaaeiuaiaabkhacaqGVbGaaeiCaiaabkhacaqGPbGaaeyzaiaabshacaqGHbGaaeOCaiaabMhacaqGGaGaaeOuaiaabggacaqG0bGaaeyAaiaab+gacaqGGaGaaeypaiaabccadaWcaaqaaiaabofacaqGObGaaeyyaiaabkhacaqGLbGaaeiAaiaab+gacaqGSbGaaeizaiaabwgacaqGYbGaae4CaiaabEcacaqGGaGaaeOraiaabwhacaqGUbGaaeizaiaabohacaqGGaGaaeiiaiaaykW7aeaacaaMc8Uaaeivaiaab+gacaqG0bGaaeyyaiaabYgacaqGGaGaaeyqaiaabohacaqGZbGaaeyzaiaabshacaqGZbGaaeiiaiaabccacaqGGaGaaGPaVdaacaaMc8oaaa@7377@

Higher proportion of shareholders funds in financing the assets is a positive feature as it provides security to the long-term loan providers.

4) Interest Coverage Ratio: It is computed as follows:

Interest Coverage Ratio = Profit before charging Interest and Income Tax Fixed Interest Charges MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=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@98E4@

It reveals the number of times interest on long-term debts is covered by profits available for interest. The higher the ratio, more secure the lender is in respect of payment of interest regularly.

Q.8 The current ratio provides a better measure of overall liquidity only when a firm’s inventory cannot easily be converted into cash. If inventory is liquid, the quick ratio is a preferred measure of overall liquidity. Explain.

Ans. Current ratio is the proportion of current assets to current liabilities. It is expressed as follows:

Current Ratio = Current Assets Current Liabilities MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@86C5@

Current assets are those assets which can be easily converted into cash within a short period of time and include current investments, inventories, trade receivables, cash and cash equivalents, short term loans and advances and other current assets. Current liabilities include short term borrowings, trade payables, other current liabilities and short term provisions.

Liquid ratio is the proportion of liquid assets to current liabilities. It is expressed as follows:

Liquid Ratio = Liquid Assets Current Liabilities MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=He9q8qqQ8frFve9Fve9Ff0dmeaabaqaaiaacaGaaeqabaWaaqaafaaakeaacqqGmbatcqqGPbqAcqqGXbqCcqqG1bqDcqqGPbqAcqqGKbazcqqGGaaicqqGsbGucqqGHbqycqqG0baDcqqGPbqAcqqGVbWBcqqGGaaicqqG9aqpcqqGGaaidaWcaaqaaiabbYeamjabbMgaPjabbghaXjabbwha1jabbMgaPjabbsgaKjabbccaGiabbgeabjabbohaZjabbohaZjabbwgaLjabbsha0jabbohaZjabbccaGiabbccaGiaaykW7aeaacqqGdbWqcqqG1bqDcqqGYbGCcqqGYbGCcqqGLbqzcqqGUbGBcqqG0baDcqqGGaaicqqGmbatcqqGPbqAcqqGHbqycqqGIbGycqqGPbqAcqqGSbaBcqqGPbqAcqqG0baDcqqGPbqAcqqGLbqzcqqGZbWCcqqGGaaicqqGGaaicaaMc8oaaaaa@83CB@

The liquid assets are defined as those assets which are more quickly convertible into cash. Liquid asset exclude inventories and prepaid expenses.

The main difference between the current ratio and the quick ratio is that the latter offers a more conservative view of the company’s ability to meets its short-term liabilities with its short-term assets because it does not include inventory and other current assets that are more difficult to liquidate (i.e., turn into cash). By excluding inventory (and other less liquid assets) the quick ratio focuses on the company’s more liquid assets.

Generally current ratio is preferable for such type of business where the inventories cannot be easily converted into cash like heavy machinery manufacturing companies. This is because heavy inventories cannot be easily sold. But on the other hand, businesses where the inventory is easily realised regard liquid ratio to be more suitable for revealing the liquidity of the business. Therefore, service companies, prefer liquid ratio as a measure of short term financial solvency.

Q.9 Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2017.

Calculate current ratio.

Particulars
I. Equity and Liabilities:
1.Shareholder’s funds
a) Share capital 7,90,000
b) Reserves and surplus 35,000
2. Current Liabilities
Trade Payables 72,000
Total 8,97,000
II. Assets
1. Non-current Assets
Fixed assets
Tangible assets 7,53,000
2. Current Assets
  1. Inventories
55,800
  1. Trade Receivables
28,800
  1. Cash & cash equivalents
59,400
Total 8,97,000

Ans.

Current Assets = Inventories + Trade receivables + Cash and cash equivalents

= ₹55,800 + ₹28,800 + ₹59,400 = ₹1,44,000

Current liabilities = Trade Payables = ₹72,000

Current Ratio = Current Assets Current Liabilities = ₹1,44,000 ₹72,000 = 2 1 =2:1 MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@AA26@

Q.10 What are various profitability ratios? How are these worked out?

Ans. It refers to the analysis of profits in relation to revenue from operations or funds employed in the business and the ratios calculated to meet this objective are known as ‘Profitability Ratios’. They include Gross Profit Ratio, Net Profit Ratio, Operating Ratio, Operating Profit Ratio and Return on Investment Ratio.

Gross profit ratio: This ratio establishes the relationship between gross profit and revenue from operations. This ratio is computed and expressed as a percentage. Following is the formula for calculating the ratio:

Gross Profit Ratio = GrossProfit Net revenue from operations x100 Grossprofit=Rev. from oper.Costofrev. from oper. MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@EFFE@

Net Profit Ratio: This ratio establishes the relationship between net profit and revenue from operations. This ratio is computed and expressed as a percentage. Following is the formula for calculating the ratio:

Net Profit Ratio = Net Profit Revenue from operations x100 Net Profit = Gross Profit – Indirect expenses & losses + Other Incomes MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=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@B7AF@

Operating Ratio: This ratio measures the proportion of an enterprise’s cost of revenue from operations and operating expenses in comparison to its revenue from operations. Following is the formula for calculating the ratio:

Operating Ratio = Operatingcost Net revenue from operations x100 Oper.cost=Costofrev. from oper.+oper.exp. MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@EFDF@

Operating Profit Ratio: This ratio shows the relationship between operating profit and revenue from operations. Following is the formula for calculating the ratio:

Operating Profit Ratio = Operatingprofit Net revenue from operations x100 Operating profit = GrossProfit – Otheroper.expenses + Otheroper.incomes MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@2E46@

Return on Investment Ratio: It is calculated by comparing the profit earned and capital employed to earn it. Following is the formula for calculating the ratio:

Return on Investment = Profit before interest, tax and dividend Capital employed x100 Capital employed= Shareholders funds + Long term loans MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=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@C5D9@

Q.11 Following is the Balance Sheet of Title Machine Ltd. as at March 31, 2017.

Particulars
I. Equity and Liabilities:
1.Shareholder’s funds
a) Share capital 24,00,000
b) Reserves and surplus 6,00,000
2. Non-Current Liabilities
Long term borrowings 9,00,000
3. Current liabilities
a) Short-term borrowings 6,00,000
b) Trade payables 23,40,000
c) Short-term provisions 60,000
Total 69,00,000
II. Assets
1. Non-current Assets
Fixed assets
Tangible assets 45,00,000
2. Current Assets
  1. Inventories
12,00,000
  1. Trade Receivables
9,00,000
  1. Cash & cash equivalents
2,28,000
  1. Short-term loans & advances
72,000
Total 69,00,000

Calculate Current Ratio and Liquid Ratio.

Ans.

Current Assets = Inventories + Trade receivables + Cash and cash equivalents + Short term loans and advances

= ₹12,00,000 + ₹9,00,000 + ₹2,28,000 + ₹72,000

= ₹24, 00,000

Liquid Assets = Current Assets – (Inventories)

= ₹24,00,000 – ₹12,00,000 = ₹12,00,000.

Current liabilities = Short-term borrowings + Trade Payables + Short-term provisions

= ₹6,00,000 + ₹23,40,000 + ₹60,000 = ₹30,00,000.

Current Ratio = Current Assets Current Liabilities = ₹24,00,000 ₹30,00,000 = 4 5 =8:1 Liquid Ratio = Liquid Assets Current Liabilities = ₹12,00,000 ₹30,00,000 = 2 5 =4:1 MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqeduuDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wDYLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYfgasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=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@2191@

Q.12 Current Ratio is 3.5:1. Working Capital is ₹90,000. Calculate the amount of Current Assets and Current Liabilities.

Ans.

Current Ratio = Current Assets Current Liabilities = 3.5 1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedu uDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wD YLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYf gasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9 q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=He9q8qqQ8frFve9Fve9Ff 0dmeaabaqaaiaacaGaaeqabaWaaqaafaaakeaacqqGdbWqcqqG1bqD cqqGYbGCcqqGYbGCcqqGLbqzcqqGUbGBcqqG0baDcqqGGaaicqqGsb GucqqGHbqycqqG0baDcqqGPbqAcqqGVbWBcqqGGaaicqqG9aqpcqqG GaaidaWcaaqaaiabboeadjabbwha1jabbkhaYjabbkhaYjabbwgaLj abb6gaUjabbsha0jabbccaGiabbgeabjabbohaZjabbohaZjabbwga Ljabbsha0jabbohaZjabbccaGiabbccaGiaaykW7aeaacqqGdbWqcq qG1bqDcqqGYbGCcqqGYbGCcqqGLbqzcqqGUbGBcqqG0baDcqqGGaai cqqGmbatcqqGPbqAcqqGHbqycqqGIbGycqqGPbqAcqqGSbaBcqqGPb qAcqqG0baDcqqGPbqAcqqGLbqzcqqGZbWCcqqGGaaicqqGGaaicaaM c8oaaiaaykW7cqGH9aqpcaaMc8UaaGPaVlaaykW7daWcaaqaaiabio daZiabc6caUiabiwda1aqaaiabigdaXaaacaaMc8oaaa@9353@

Let the current liabilities = X

Then current assets = 3.5X

Working capital = 3.5X– X= 2.5X

2.5X = 90,000

X = Current liabilities = ₹36,000

Current assets = 3.5 x 36,000 = ₹1,26,000.

Q.13 Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the inventory is ₹36,000. Calculate Current Liabilities and Current Assets.

Ans.

Current ratio = 4.5:1

Quick ratio = 3:1

Let current liabilities = X

Then current assets = 4.5X

Current liabilities = 3X

Inventory = 4.5X – 3X = 1.5X

1.5X = ₹36,000

X = Current liabilities = ₹24,000

Current assets = ₹24,000 x 4.5 = ₹1,08,000

Q.14 Current Liabilities of a company are ₹75,000. If Current ratio is 4:1 and Liquid Ratio is 1:1, Calculate value of current assets, liquid assets and inventory.

Ans.

Current ratio = 4:1

Liquid ratio = 1:1

Current liabilities = ₹75,000

Then liquid assets = ₹75,000

Current assets = ₹75,000 x 4 = ₹3,00,000

Inventory = Current assets – Liquid assets

= ₹3,00,000 – ₹75,000 = ₹2,25,000

Q.15 Handa Ltd. has inventory of ₹20,000, Total liquid assets are ₹1,00,000 and quick ratio is 2:1. Calculate current ratio.

Ans.

Quick ratio = 2:1 Liquid/Quick assets =₹1, 00,000 Quick Ratio = Liquid Assets Current Liabilities = 2 1 1,00,000 Current Liabilities = 2 1 Current Liabilities = 1,00,000 2 =₹50,000 Current Assets = 1,00,000+20,000=₹1,20,000 Quick Ratio = 1,20,000 50,000 = 2.4 1 =2.4:1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedu uDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wD YLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYf gasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9 q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=He9q8qqQ8frFve9Fve9Ff 0dmeaabaqaaiaacaGaaeqabaWaaqaafaaakqaabeqaaabaaaaaaaaa peGaeeyuaeLaeeyDauNaeeyAaKMaee4yamMaee4AaSMaeeiiaaIaee OCaiNaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8MaeeiiaaIaeeypa0Ja eeiiaaIaeeOmaiJaeeOoaOJaeeymaedabaGaeeitaWKaeeyAaKMaee yCaeNaeeyDauNaeeyAaKMaeeizaqMaee4la8IaeeyuaeLaeeyDauNa eeyAaKMaee4yamMaee4AaSMaeeiiaaIaeeyyaeMaee4CamNaee4Cam NaeeyzauMaeeiDaqNaee4CamNaeeiiaaIaeeypa0JaaGzaVlaaysW7 cqqGYbGCcqqGHbqycqqGTbqBcqqGXaqmcqqGSaalcqqGGaaicqqGWa amcqqGWaamcqqGSaalcqqGWaamcqqGWaamcqqGWaama8aabaGaeeyu aeLaeeyDauNaeeyAaKMaee4yamMaee4AaSMaeeiiaaIaeeOuaiLaee yyaeMaeeiDaqNaeeyAaKMaee4Ba8MaeeiiaaIaeeypa0JaeeiiaaYa aSaaaeaacqqGmbatcqqGPbqAcqqGXbqCcqqG1bqDcqqGPbqAcqqGKb azcqqGGaaicqqGbbqqcqqGZbWCcqqGZbWCcqqGLbqzcqqG0baDcqqG ZbWCcqqGGaaicqqGGaaicaaMc8oabaGaee4qamKaeeyDauNaeeOCai NaeeOCaiNaeeyzauMaeeOBa4MaeeiDaqNaeeiiaaIaeeitaWKaeeyA aKMaeeyyaeMaeeOyaiMaeeyAaKMaeeiBaWMaeeyAaKMaeeiDaqNaee yAaKMaeeyzauMaee4CamNaeeiiaaIaeeiiaaIaaGPaVdaacaaMc8Ua eeypa0JaaGPaVlaaykW7caaMc8+aaSaaaeaacqqGYaGmaeaacqqGXa qmaaGaaGPaVdqaamaalaaabaGaeeymaeJaeeilaWIaeeimaaJaeeim aaJaeeilaWIaeeimaaJaeeimaaJaeeimaadabaGaee4qamKaeeyDau NaeeOCaiNaeeOCaiNaeeyzauMaeeOBa4MaeeiDaqNaeeiiaaIaeeit aWKaeeyAaKMaeeyyaeMaeeOyaiMaeeyAaKMaeeiBaWMaeeyAaKMaee iDaqNaeeyAaKMaeeyzauMaee4CamhaaiaaykW7caaMc8Uaeeypa0Ja aGPaVlaaykW7daWcaaqaaiabbkdaYaqaaiabbgdaXaaaaeaacqqGdb WqcqqG1bqDcqqGYbGCcqqGYbGCcqqGLbqzcqqGUbGBcqqG0baDcqqG GaaicqqGmbatcqqGPbqAcqqGHbqycqqGIbGycqqGPbqAcqqGSbaBcq qGPbqAcqqG0baDcqqGPbqAcqqGLbqzcqqGZbWCcqqGGaaicqqG9aqp cqqGGaaidaWcaaqaaiabbgdaXiabbYcaSiabbcdaWiabbcdaWiabbY caSiabbcdaWiabbcdaWiabbcdaWaqaaiabbkdaYaaacqqG9aqpcaaM c8UaaGPaVlabbkhaYjabbggaHjabb2gaTjabbwda1iabbcdaWiabbY caSiabbcdaWiabbcdaWiabbcdaWaqaaiabboeadjabbwha1jabbkha YjabbkhaYjabbwgaLjabb6gaUjabbsha0jabbccaGiaaykW7cqqGbb qqcqqGZbWCcqqGZbWCcqqGLbqzcqqG0baDcqqGZbWCcqqGGaaicqqG GaaicqqG9aqpcqqGGaaicqqGXaqmcqqGSaalcqqGWaamcqqGWaamcq qGSaalcqqGWaamcqqGWaamcqqGWaamcaaMc8UaaGPaVlabbUcaRiaa ykW7cqqGYaGmcqqGWaamcqqGSaalcqqGWaamcqqGWaamcqqGWaamca aMe8Uaeeypa0JaaGzaVlaaygW7caaMe8UaeeOCaiNaeeyyaeMaeeyB a0MaeeymaeJaeeilaWIaeeOmaiJaeeimaaJaeeilaWIaeeimaaJaee imaaJaeeimaadabaGaeeyuaeLaeeyDauNaeeyAaKMaee4yamMaee4A aSMaeeiiaaIaeeOuaiLaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8Maee iiaaIaeeypa0JaeeiiaaYaaSaaaeaacqqGXaqmcqqGSaalcqqGYaGm cqqGWaamcqqGSaalcqqGWaamcqqGWaamcqqGWaamaeaacqqG1aqncq qGWaamcqqGSaalcqqGWaamcqqGWaamcqqGWaamcqqGGaaicqqGGaai caaMc8oaaiaaykW7cqqG9aqpcaaMc8UaaGPaVlaaykW7daWcaaqaai abbkdaYiabb6caUiabbsda0aqaaiabbgdaXaaacaaMe8Uaeeypa0Ja aGjbVlabbkdaYiabb6caUiabbsda0iabbQda6iabbgdaXaaaaa@945F@

Q.16 Calculate debt-equity ratio from the following information:

Total Assets: ₹15,00,000

Current Liabilities: ₹6,00,000

Total Debts: ₹12,00,000

Ans.

Equity = Total assets – Total debts

= ₹15,00,000 – ₹12,00,000 = ₹3,00,000

Debt = Total debts – Current liabilities

= ₹12,00,000 – ₹6,00,000 = ₹6,00,000

Debt equity Ratio = ₹6,00,000 ₹3,00,000 = 2 1 =2:1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXafv3ySLgzGmvETj2BSbqefm0B1jxALjhiov2D aebbfv3ySLgzGueE0jxyaibaieYlf9irVeeu0dXdh9vqqj=hEeeu0x Xdbba9frFj0=OqFfea0dXdd9vqaq=JfrVkFHe9pgea0dXdar=Jb9hs 0dXdbPYxe9vr0=vr0=vqpWqaaeaabaGaaiaacaqabeaadaqaaqaaaO qaaiaabseacaqGLbGaaeOyaiaabshacaqGGaGaaeyzaiaabghacaqG 1bGaaeyAaiaabshacaqG5bGaaeiiaiaabkfacaqGHbGaaeiDaiaabM gacaqGVbGaaeiiaiaab2dacaqGGaWaaSaaaeaacaqG2aGaaeilaiaa bcdacaqGWaGaaeilaiaabcdacaqGWaGaaeimaiaabccacaaMc8oaba Gaae4maiaabYcacaqGWaGaaeimaiaabYcacaqGWaGaaeimaiaabcda caqGGaGaaeiiaiaaykW7aaGaaGPaVlaab2dacaaMc8UaaGPaVlaayk W7daWcaaqaaiaabkdaaeaacaqGXaaaaiaaykW7caaMc8Uaaeypaiaa ykW7caaMc8UaaeOmaiaabQdacaqGXaaaaa@6CE1@

Q.17 Calculate Current Ratio if: Inventory is ₹6,00,000; Liquid Assets ₹24,00,000; Quick Ratio 2:1.

Ans.

Current assets = Liquid assets + Inventory

= ₹24,00,000 + ₹6,00,000 = ₹30,00,000

Quick ratio = 2:1,

Let current liability = x

Then current assets = 2x

x = ₹24,00,000 2 =₹12,00,000 Current Liabilities=₹12,00,000 Current Ratio = ₹30,00,000 ₹12,00,000 =2.5:1times MathType@MTEF@5@5@+=feaaguart1ev2aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKfMBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2CG4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yqaqpepae9pg0FirpepeKkFr0xfr=xfr=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@AF1B@

Q.18 Compute Inventory Turnover Ratio from the following information:

Net Revenue from Operations: ₹2,00,000

Gross Profit: ₹50,000

Inventory at the end: ₹60,000

Excess of inventory at the end over inventory in the beginning: ₹20,000

Ans.

Inventory Turnover Ratio = Cost of revenue from operations Average inventory Cost of revenue from operations =₹2,00,000 –₹50,000 = ₹1,50,000 Opening inventory =₹60,000 –₹20,000 =₹40,000 Average Inventory = ₹60,000 + ₹40,000 2 =₹50,000 Inventory Turnover Ratio = ₹1,50,000 ₹50,000 =3times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedu uDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wD YLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYf gasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9 q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=He9q8qqQ8frFve9Fve9Ff 0dmeaabaqaaiaacaGaaeqabaWaaqaafaaakqaabeqaaiabbMeajjab b6gaUjabbAha2jabbwgaLjabb6gaUjabbsha0jabb+gaVjabbkhaYj abbMha5jabbccaGiabbsfaujabbwha1jabbkhaYjabb6gaUjabb+ga VjabbAha2jabbwgaLjabbkhaYjabbccaGiabbkfasjabbggaHjabbs ha0jabbMgaPjabb+gaVjabbccaGiabb2da9iabbccaGmaalaaabaGa ee4qamKaee4Ba8Maee4CamNaeeiDaqNaeeiiaaIaee4Ba8MaeeOzay MaeeiiaaIaeeOCaiNaeeyzauMaeeODayNaeeyzauMaeeOBa4MaeeyD auNaeeyzauMaeeiiaaIaeeOzayMaeeOCaiNaee4Ba8MaeeyBa0Maee iiaaIaee4Ba8MaeeiCaaNaeeyzauMaeeOCaiNaeeyyaeMaeeiDaqNa eeyAaKMaee4Ba8MaeeOBa4Maee4CamNaeeiiaaIaeeiiaaIaeeiiaa IaaGPaVdqaaiabbgeabjabbAha2jabbwgaLjabbkhaYjabbggaHjab bEgaNjabbwgaLjabbccaGiabbMgaPjabb6gaUjabbAha2jabbwgaLj abb6gaUjabbsha0jabb+gaVjabbkhaYjabbMha5jabbccaGiabbcca GiaaykW7aaGaaGPaVdqaaabaaaaaaaaapeGaee4qamKaee4Ba8Maee 4CamNaeeiDaqNaeeiiaaIaee4Ba8MaeeOzayMaeeiiaaIaeeOCaiNa eeyzauMaeeODayNaeeyzauMaeeOBa4MaeeyDauNaeeyzauMaeeiiaa IaeeOzayMaeeOCaiNaee4Ba8MaeeyBa0MaeeiiaaIaee4Ba8MaeeiC aaNaeeyzauMaeeOCaiNaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8Maee OBa4Maee4CamNaeeiiaaIaeeypa0JaeeiiaaIaeeOmaiJaeeilaWIa eeiiaaIaeeimaaJaeeimaaJaeeilaWIaeeimaaJaeeimaaJaeeimaa JaeeiiaaIaee4eGyPaeeiiaaIaeeynauJaeeimaaJaeeilaWIaeeim aaJaeeimaaJaeeimaadabaGaeeypa0JaeeiiaaIaeeiyaaMaeeymae JaeeilaWIaeeiiaaIaeeynauJaeeimaaJaeeilaWIaeeimaaJaeeim aaJaeeimaadabaGaee4ta8KaeeiCaaNaeeyzauMaeeOBa4MaeeyAaK MaeeOBa4Maee4zaCMaeeiiaaIaeeyAaKMaeeOBa4MaeeODayNaeeyz auMaeeOBa4MaeeiDaqNaee4Ba8MaeeOCaiNaeeyEaKNaeeiiaaIaee ypa0JaeeiiaaIaeeOnayJaeeimaaJaeeilaWIaeeimaaJaeeimaaJa eeimaaJaeeiiaaIaee4eGyPaeeiiaaIaeeOmaiJaeeimaaJaeeilaW IaeeimaaJaeeimaaJaeeimaaJaeeiiaaIaeeypa0JaeeiiaaIaeeiy aaMaeeinaqJaeeimaaJaeeilaWIaeeimaaJaeeimaaJaeeimaadaba WdaiabbgeabjabbAha2jabbwgaLjabbkhaYjabbggaHjabbEgaNjab bwgaLjabbccaGiabbMeajjabb6gaUjabbAha2jabbwgaLjabb6gaUj abbsha0jabb+gaVjabbkhaYjabbMha5jabbccaGiabbccaGiabb2da 9iabbccaGmaalaaabaGaeeOnayJaeeimaaJaeeilaWIaeeimaaJaee imaaJaeeimaaJaeeiiaaIaee4kaSIaeeiiaaIaeeinaqJaeeimaaJa eeilaWIaeeimaaJaeeimaaJaeeimaaJaeeiiaaIaeeiiaaIaeeiiaa IaaGPaVdqaaiabbkdaYiabbccaGiabbccaGiaaykW7aaGaaGPaVlaa ykW7cqqG9aqpcaaMc8UaaGPaVlabbcgaGjabbwda1iabbcdaWiabbY caSiabbcdaWiabbcdaWiabbcdaWaqaaiabbMeajjabb6gaUjabbAha 2jabbwgaLjabb6gaUjabbsha0jabb+gaVjabbkhaYjabbMha5jabbc caGiabbsfaujabbwha1jabbkhaYjabb6gaUjabb+gaVjabbAha2jab bwgaLjabbkhaYjabbccaGiabbkfasjabbggaHjabbsha0jabbMgaPj abb+gaVjabbccaGiabb2da9iabbccaGmaalaaabaGaeeymaeJaeeil aWIaeeynauJaeeimaaJaeeilaWIaeeimaaJaeeimaaJaeeimaaJaee iiaaIaeeiiaaIaeeiiaaIaaGPaVdqaaiabbwda1iabbcdaWiabbYca SiabbcdaWiabbcdaWiabbcdaWiabbccaGiabbccaGiaaykW7aaGaaG PaVlaaykW7cqqG9aqpcaaMc8Uaee4mamJaaGPaVlaaykW7cqqG0baD cqqGPbqAcqqGTbqBcqqGLbqzcqqGZbWCaaaa@A49B@

Q.19 Calculate following ratios from the following information:

(i) Current Ratio

(ii) Liquid Ratio

(iii) Operating Ratio

(iv) Gross Profit Ratio

Current Assets: ₹35,000

Current Liabilities: ₹17,500

Inventory: ₹15,000

Operating Expenses: ₹20,000

Revenue from Operations: ₹60,000

Cost of Revenue from operation: ₹30,000

Ans.

Current Ratio = Current Assets Current Liabilities = ₹35,000 ₹17,500 =2:1 Liquid Ratio = Liquid Assets Current Liabilities Liquid Assets =₹35,000₹15,000=₹20,000 LiquidRatio = ₹20,000 ₹17,500 =1.14:1 Operating Ratio = Operatingcost Net revenue from operations x100 Oper.cost=Costofrev. from oper.+oper.exp. = ₹50,000 ₹60,000 x100=83.3% Gross Profit Ratio = GrossProfit Net revenue from operations x100 Grossprofit=Rev. from oper.Costofrev. from oper. = ₹30,000 ₹60,000 x100=50% MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXafv3ySLgzGmvETj2BSbqefm0B1jxALjhiov2D aebbfv3ySLgzGueE0jxyaibaieYlf9irVeeu0dXdh9vqqj=hEeeu0x Xdbba9frFj0=OqFfea0dXdd9vqaq=JfrVkFHe9pgea0dXdar=Jb9hs 0dXdbPYxe9vr0=vr0=vqpWqaaeaabaGaaiaacaqabeaadaqaaqaaaO abaeqabaGaae4qaiaabwhacaqGYbGaaeOCaiaabwgacaqGUbGaaeiD aiaabccacaqGsbGaaeyyaiaabshacaqGPbGaae4BaiaabccacaqG9a GaaeiiamaalaaabaGaae4qaiaabwhacaqGYbGaaeOCaiaabwgacaqG UbGaaeiDaiaabccacaqGbbGaae4CaiaabohacaqGLbGaaeiDaiaabo hacaqGGaGaaeiiaiaaykW7aeaacaqGdbGaaeyDaiaabkhacaqGYbGa aeyzaiaab6gacaqG0bGaaeiiaiaabYeacaqGPbGaaeyyaiaabkgaca qGPbGaaeiBaiaabMgacaqG0bGaaeyAaiaabwgacaqGZbGaaeiiaiaa bccacaaMc8oaaiaaykW7aeaacaqG9aGaaGPaVlaaykW7caaMc8+aaS aaaeaacaqGZaGaaeynaiaabYcacaqGWaGaaeimaiaabcdaaeaacaqG XaGaae4naiaabYcacaqG1aGaaeimaiaabcdaaaGaaGPaVlaaykW7ca aMc8UaaeypaiaaykW7caaMc8UaaGPaVlaabkdacaqG6aGaaeymaaqa aiaabYeacaqGPbGaaeyCaiaabwhacaqGPbGaaeizaiaabccacaqGsb GaaeyyaiaabshacaqGPbGaae4BaiaabccacaqG9aGaaeiiamaalaaa baGaaeitaiaabMgacaqGXbGaaeyDaiaabMgacaqGKbGaaeiiaiaabg eacaqGZbGaae4CaiaabwgacaqG0bGaae4CaiaabccacaqGGaGaaGPa VdqaaiaaboeacaqG1bGaaeOCaiaabkhacaqGLbGaaeOBaiaabshaca qGGaGaaeitaiaabMgacaqGHbGaaeOyaiaabMgacaqGSbGaaeyAaiaa bshacaqGPbGaaeyzaiaabohacaqGGaGaaeiiaiaaykW7aaGaaGPaVd qaaiaabYeacaqGPbGaaeyCaiaabwhacaqGPbGaaeizaiaabccacaaM c8UaaeyqaiaabohacaqGZbGaaeyzaiaabshacaqGZbGaaeiiaiaabc cacaqG9aGaaeiiaiaabodacaqG1aGaaeilaiaabcdacaqGWaGaaeim aiaaykW7caaMc8UaaeylaiaaykW7caqGXaGaaeynaiaabYcacaqGWa GaaeimaiaabcdacaaMe8UaaeypaiaaykW7caqGGbGaaeOmaiaabcda caqGSaGaaeimaiaabcdacaqGWaaabaGaaeitaiaabMgacaqGXbGaae yDaiaabMgacaqGKbGaaGPaVlaaykW7caqGsbGaaeyyaiaabshacaqG PbGaae4BaiaabccacaqG9aGaaeiiamaalaaabaGaaeOmaiaabcdaca qGSaGaaeimaiaabcdacaqGWaaabaGaaGPaVlaabgdacaqG3aGaaeil aiaabwdacaqGWaGaaeimaiaabccacaqGGaGaaGPaVdaacaaMc8Uaae ypaiaaykW7caaMc8UaaGPaVlaabgdacaqGUaGaaeymaiaabsdacaaM c8UaaeOoaiaaykW7caqGXaaabaGaae4taiaabchacaqGLbGaaeOCai aabggacaqG0bGaaeyAaiaab6gacaqGNbGaaeiiaiaabkfacaqGHbGa aeiDaiaabMgacaqGVbGaaeiiaiaab2dacaqGGaWaaSaaaeaacaqGpb GaaeiCaiaabwgacaqGYbGaaeyyaiaabshacaqGPbGaaeOBaiaabEga caaMc8UaaGPaVlaabogacaqGVbGaae4CaiaabshacaqGGaGaaeiiai aaykW7aeaacaqGobGaaeyzaiaabshacaqGGaGaaeOCaiaabwgacaqG 2bGaaeyzaiaab6gacaqG1bGaaeyzaiaabccacaqGMbGaaeOCaiaab+ gacaqGTbGaaeiiaiaab+gacaqGWbGaaeyzaiaabkhacaqGHbGaaeiD aiaabMgacaqGVbGaaeOBaiaabohacaqGGaGaaeiiaiaaykW7aaGaaG PaVlaaykW7caqG4bGaaGPaVlaaykW7caqGXaGaaeimaiaabcdaaeaa caqGpbGaaeiCaiaabwgacaqGYbGaaeOlaiaaykW7caaMc8Uaae4yai aab+gacaqGZbGaaeiDaiaaykW7caaMc8UaaeypaiaaykW7caaMc8Ua ae4qaiaab+gacaqGZbGaaeiDaiaaykW7caaMc8Uaae4BaiaabAgaca aMc8UaaeOCaiaabwgacaqG2bGaaeOlaiaabccacaqGMbGaaeOCaiaa b+gacaqGTbGaaeiiaiaab+gacaqGWbGaaeyzaiaabkhacaqGUaGaaG PaVlaabUcacaaMc8Uaae4BaiaabchacaqGLbGaaeOCaiaab6cacaaM b8UaaGzaVlaaygW7caaMb8UaaGzaVlaaykW7caaMc8UaaeyzaiaabI hacaqGWbGaaeOlaaqaaiaab2dacaaMc8+aaSaaaeaacaqG1aGaaeim aiaabYcacaqGWaGaaeimaiaabcdacaaMc8oabaGaaeOnaiaabcdaca qGSaGaaeimaiaabcdacaqGWaaaaiaaykW7caaMc8UaaeiEaiaaykW7 caaMc8UaaeymaiaabcdacaqGWaGaaGPaVlaaykW7caqG9aGaaGPaVl aabIdacaqGZaGaaeOlaiaabodacaqGLaaabaGaae4raiaabkhacaqG VbGaae4CaiaabohacaqGGaGaaeiuaiaabkhacaqGVbGaaeOzaiaabM gacaqG0bGaaeiiaiaabkfacaqGHbGaaeiDaiaabMgacaqGVbGaaeii aiaab2dacaqGGaWaaSaaaeaacaqGhbGaaeOCaiaab+gacaqGZbGaae 4CaiaaykW7caaMc8UaaGPaVlaabcfacaqGYbGaae4BaiaabAgacaqG PbGaaeiDaiaabccacaqGGaGaaGPaVdqaaiaab6eacaqGLbGaaeiDai aabccacaqGYbGaaeyzaiaabAhacaqGLbGaaeOBaiaabwhacaqGLbGa aeiiaiaabAgacaqGYbGaae4Baiaab2gacaqGGaGaae4Baiaabchaca qGLbGaaeOCaiaabggacaqG0bGaaeyAaiaab+gacaqGUbGaae4Caiaa bccacaqGGaGaaGPaVdaacaaMc8UaaGPaVlaabIhacaaMc8UaaGPaVl aabgdacaqGWaGaaeimaaqaaiaabEeacaqGYbGaae4BaiaabohacaqG ZbGaaGPaVlaaykW7caqGWbGaaeOCaiaab+gacaqGMbGaaeyAaiaabs hacaaMc8UaaeypaiaaykW7caqGsbGaaeyzaiaabAhacaqGUaGaaeii aiaabAgacaqGYbGaae4Baiaab2gacaqGGaGaae4BaiaabchacaqGLb GaaeOCaiaab6cacaaMc8UaaGPaVlaab2cacaaMc8Uaae4qaiaab+ga caqGZbGaaeiDaiaaykW7caaMc8Uaae4BaiaabAgacaaMc8UaaeOCai aabwgacaqG2bGaaeOlaiaabccacaqGMbGaaeOCaiaab+gacaqGTbGa aeiiaiaab+gacaqGWbGaaeyzaiaabkhacaqGUaaabaGaaeypaiaayk W7daWcaaqaaiaabodacaqGWaGaaeilaiaabcdacaqGWaGaaeimaiaa ykW7aeaacaqG2aGaaeimaiaabYcacaqGWaGaaeimaiaabcdaaaGaaG PaVlaaykW7caqG4bGaaGPaVlaaykW7caqGXaGaaeimaiaabcdacaaM c8UaaGPaVlaab2dacaaMc8UaaGPaVlaabwdacaqGWaGaaeyjaaaaaa@4D69@

Q.20 From the following information calculate:
(i) Gross Profit Ratio
(ii) Inventory Turnover Ratio
(iii) Current Ratio
(iv) Liquid Ratio
(v) Net Profit Ratio
(vi) Working Capital Ratio:

Revenue from Operations: ₹25,20,000
Net Profit: ₹3,60,000
Cost of Revenue from Operations: ₹19,20,000
Long-term Debts: ₹9,00,000
Trade Payables: ₹2,00,000
Average Inventory: ₹8,00,000
Liquid Assets: ₹7,60,000
Fixed Assets: ₹14,40,000
Current Liabilities: ₹6,00,000
Net Profit before interest and Tax: ₹8,00,000

Ans.

Gross Profit Ratio = GrossProfit Net revenue from operations ×100 Grossprofit=Rev. from oper.Costofrev. from oper. = 6,00,000 25,20,000 ×100=23.81% Inventory Turnover Ratio = Cost of revenue from operations Average inventory Inventory Turnover Ratio = 19,20,000 8,00,000 =2.4times Current assets = Liquid assets + Inventory Current Ratio = Current Assets Current Liabilities = 7,60,000+8,00,000 6,00,000 = 15,60,000 6,00,000 =2.6:1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGhbGaaeOCaiaab+gacaqGZbGaae4C aiaabccacaqGqbGaaeOCaiaab+gacaqGMbGaaeyAaiaabshacaqGGa GaaeOuaiaabggacaqG0bGaaeyAaiaab+gacaqGGaGaaeypaiaabcca daWcaaqaaiaabEeacaqGYbGaae4BaiaabohacaqGZbGaaGPaVlaayk W7caaMc8UaaeiuaiaabkhacaqGVbGaaeOzaiaabMgacaqG0bGaaeii aiaabccacaaMc8oabaGaaeOtaiaabwgacaqG0bGaaeiiaiaabkhaca qGLbGaaeODaiaabwgacaqGUbGaaeyDaiaabwgacaqGGaGaaeOzaiaa bkhacaqGVbGaaeyBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaae yyaiaabshacaqGPbGaae4Baiaab6gacaqGZbGaaeiiaiaabccacaaM c8oaaiaaykW7caaMc8UaaeiEaiaaykW7caaMc8Uaaeymaiaabcdaca qGWaaabaGaae4raiaabkhacaqGVbGaae4CaiaabohacaaMc8UaaGPa VlaabchacaqGYbGaae4BaiaabAgacaqGPbGaaeiDaiaaysW7caqG9a GaaGjbVlaabkfacaqGLbGaaeODaiaab6cacaqGGaGaaeOzaiaabkha caqGVbGaaeyBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaaeOlai aaykW7caaMc8UaaeylaiaaykW7caaMc8Uaae4qaiaab+gacaqGZbGa aeiDaiaaykW7caaMc8Uaae4BaiaabAgacaaMc8UaaeOCaiaabwgaca qG2bGaaeOlaiaabccacaqGMbGaaeOCaiaab+gacaqGTbGaaeiiaiaa b+gacaqGWbGaaeyzaiaabkhacaqGUaaabaGaaeypaiaaykW7daWcaa qaaiaabAdacaqGSaGaaeimaiaabcdacaqGSaGaaeimaiaabcdacaqG WaGaaGPaVdqaaiaabkdacaqG1aGaaeilaiaabkdacaqGWaGaaeilai aabcdacaqGWaGaaeimaaaacaaMc8UaaGPaVlabgEna0kaaykW7caaM c8UaaeymaiaabcdacaqGWaGaaGPaVlaaykW7caqG9aGaaGPaVlaayk W7caqGYaGaae4maiaab6cacaqG4aGaaeymaiaabwcaaeaacaqGjbGa aeOBaiaabAhacaqGLbGaaeOBaiaabshacaqGVbGaaeOCaiaabMhaca qGGaGaaeivaiaabwhacaqGYbGaaeOBaiaab+gacaqG2bGaaeyzaiaa bkhacaqGGaGaaeOuaiaabggacaqG0bGaaeyAaiaab+gacaqGGaGaae ypaiaabccadaWcaaqaaiaaboeacaqGVbGaae4CaiaabshacaqGGaGa ae4BaiaabAgacaqGGaGaaeOCaiaabwgacaqG2bGaaeyzaiaab6gaca qG1bGaaeyzaiaabccacaqGMbGaaeOCaiaab+gacaqGTbGaaeiiaiaa b+gacaqGWbGaaeyzaiaabkhacaqGHbGaaeiDaiaabMgacaqGVbGaae OBaiaabohacaqGGaGaaeiiaiaabccacaaMc8oabaGaaeyqaiaabAha caqGLbGaaeOCaiaabggacaqGNbGaaeyzaiaabccacaqGPbGaaeOBai aabAhacaqGLbGaaeOBaiaabshacaqGVbGaaeOCaiaabMhacaqGGaGa aeiiaiaaykW7aaaabaGaaeysaiaab6gacaqG2bGaaeyzaiaab6gaca qG0bGaae4BaiaabkhacaqG5bGaaeiiaiaabsfacaqG1bGaaeOCaiaa b6gacaqGVbGaaeODaiaabwgacaqGYbGaaeiiaiaabkfacaqGHbGaae iDaiaabMgacaqGVbGaaeiiaiaab2dacaqGGaWaaSaaaeaacaqGXaGa aeyoaiaabYcacaqGYaGaaeimaiaabYcacaqGWaGaaeimaiaabcdaca qGGaGaaeiiaiaabccacaaMc8oabaGaaeioaiaabYcacaqGWaGaaeim aiaabYcacaqGWaGaaeimaiaabcdacaqGGaGaaeiiaiaaykW7aaGaaG PaVlaaykW7caqG9aGaaGPaVlaaykW7caaMc8UaaeOmaiaab6cacaqG 0aGaaGPaVlaaykW7caqG0bGaaeyAaiaab2gacaqGLbGaae4Caiaayk W7aeaaqaaaaaaaaaWdbiaaboeacaqG1bGaaeOCaiaabkhacaqGLbGa aeOBaiaabshacaqGGaGaaeyyaiaabohacaqGZbGaaeyzaiaabshaca qGZbGaaeiiaiaab2dacaqGGaGaaeitaiaabMgacaqGXbGaaeyDaiaa bMgacaqGKbGaaeiiaiaabggacaqGZbGaae4CaiaabwgacaqG0bGaae 4CaiaabccacaqGRaGaaeiiaiaabMeacaqGUbGaaeODaiaabwgacaqG UbGaaeiDaiaab+gacaqGYbGaaeyEaaqaa8aacaqGdbGaaeyDaiaabk hacaqGYbGaaeyzaiaab6gacaqG0bGaaeiiaiaabkfacaqGHbGaaeiD aiaabMgacaqGVbGaaeiiaiaab2dacaqGGaWaaSaaaeaacaqGdbGaae yDaiaabkhacaqGYbGaaeyzaiaab6gacaqG0bGaaeiiaiaabgeacaqG ZbGaae4CaiaabwgacaqG0bGaae4CaiaabccacaqGGaGaaGPaVdqaai aaboeacaqG1bGaaeOCaiaabkhacaqGLbGaaeOBaiaabshacaqGGaGa aeitaiaabMgacaqGHbGaaeOyaiaabMgacaqGSbGaaeyAaiaabshaca qGPbGaaeyzaiaabohacaqGGaGaaeiiaiaaykW7aaGaaGPaVdqaaiaa b2dacaaMc8UaaGPaVlaaykW7daWcaaqaaiaabEdacaqGSaGaaeOnai aabcdacaqGSaGaaeimaiaabcdacaqGWaGaaGPaVlaabUcacaaMc8Ua aeioaiaabYcacaqGWaGaaeimaiaabYcacaqGWaGaaeimaiaabcdaae aacaqG2aGaaeilaiaabcdacaqGWaGaaeilaiaabcdacaqGWaGaaeim aaaacaaMc8UaaGPaVlaaykW7caqG9aGaaGPaVlaaykW7daWcaaqaai aabgdacaqG1aGaaeilaiaabAdacaqGWaGaaeilaiaabcdacaqGWaGa aeimaiaaykW7aeaacaqG2aGaaeilaiaabcdacaqGWaGaaeilaiaabc dacaqGWaGaaeimaaaacaaMc8UaaGPaVlaaykW7caqG9aGaaGPaVlaa ykW7caqGYaGaaeOlaiaabAdacaqG6aGaaeymaaaaaa@0149@

Liquid Ratio = Liquid Assets Current Liabilities = 7,60,000 6,00,000 =1.27:1 Net Profit Ratio = Net Profit Revenue from operations ×100 = 3,60,000 25,20,000 ×100=14.28% WorkingCapitalTurnoverRatio= Revenuefromoperations WorkingCapital WorkingCapital=15,60,0006,00,000=9,60,00 = 25,20,000 9,60,000 =2.62times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedu uDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wD YLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYf gasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9 q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=He9q8qqQ8frFve9Fve9Ff 0dmeaabaqaaiaacaGaaeqabaWaaqaafaaakqaabeqaaiabbYeamjab bMgaPjabbghaXjabbwha1jabbMgaPjabbsgaKjabbccaGiabbkfasj abbggaHjabbsha0jabbMgaPjabb+gaVjabbccaGiabb2da9iabbcca GmaalaaabaGaeeitaWKaeeyAaKMaeeyCaeNaeeyDauNaeeyAaKMaee izaqMaeeiiaaIaeeyqaeKaee4CamNaee4CamNaeeyzauMaeeiDaqNa ee4CamNaeeiiaaIaeeiiaaIaaGPaVdqaaiabboeadjabbwha1jabbk haYjabbkhaYjabbwgaLjabb6gaUjabbsha0jabbccaGiabbYeamjab bMgaPjabbggaHjabbkgaIjabbMgaPjabbYgaSjabbMgaPjabbsha0j abbMgaPjabbwgaLjabbohaZjabbccaGiabbccaGiaaykW7aaGaaGPa VdqaaiaaykW7caaMc8UaaGPaVlabb2da9iaaykW7caaMc8+aaSaaae aacqqG3aWncqqGSaalcqqG2aGncqqGWaamcqqGSaalcqqGWaamcqqG WaamcqqGWaamcaaMc8oabaGaeeOnayJaeeilaWIaeeimaaJaeeimaa JaeeilaWIaeeimaaJaeeimaaJaeeimaadaaiaaykW7caaMc8UaaGPa Vlabb2da9iaaykW7caaMc8UaeeymaeJaeeOla4IaeeOmaiJaee4naC JaeeOoaOJaeeymaedabaGaeeOta4KaeeyzauMaeeiDaqNaeeiiaaIa eeiuaaLaeeOCaiNaee4Ba8MaeeOzayMaeeyAaKMaeeiDaqNaeeiiaa IaeeOuaiLaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8MaeeiiaaIaeeyp a0JaeeiiaaYaaSaaaeaacqqGobGtcqqGLbqzcqqG0baDcqqGGaaica aMc8UaeeiuaaLaeeOCaiNaee4Ba8MaeeOzayMaeeyAaKMaeeiDaqNa eeiiaacabaGaeeOuaiLaeeyzauMaeeODayNaeeyzauMaeeOBa4Maee yDauNaeeyzauMaeeiiaaIaeeOzayMaeeOCaiNaee4Ba8MaeeyBa0Ma eeiiaaIaee4Ba8MaeeiCaaNaeeyzauMaeeOCaiNaeeyyaeMaeeiDaq NaeeyAaKMaee4Ba8MaeeOBa4Maee4CamNaeeiiaaIaaGPaVdaacaaM c8UaaGPaVlaaykW7cqqGxdW1caaMc8UaaGPaVlabbgdaXiabbcdaWi abbcdaWaqaaiaaykW7caaMc8UaaGPaVlabb2da9iaaykW7caaMc8+a aSaaaeaacqqGZaWmcqqGSaalcqqG2aGncqqGWaamcqqGSaalcqqGWa amcqqGWaamcqqGWaamcaaMc8oabaGaeeOmaiJaeeynauJaeeilaWIa eeOmaiJaeeimaaJaeeilaWIaeeimaaJaeeimaaJaeeimaadaaiaayk W7caaMc8Uaee41aCTaaGPaVlaaykW7cqqGXaqmcqqGWaamcqqGWaam caaMc8UaaGPaVlaaykW7cqqG9aqpcaaMc8UaeeymaeJaeeinaqJaee Ola4IaeeOmaiJaeeioaGJaeeyjaucabaGaee4vaCLaee4Ba8MaeeOC aiNaee4AaSMaeeyAaKMaeeOBa4Maee4zaCMaaGjbVlabboeadjabbg gaHjabbchaWjabbMgaPjabbsha0jabbggaHjabbYgaSjaaysW7cqqG ubavcqqG1bqDcqqGYbGCcqqGUbGBcqqGVbWBcqqG2bGDcqqGLbqzcq qGYbGCcaaMe8UaeeOuaiLaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8Ma aGjbVlabb2da9iaaysW7daWcaaqaaiabbkfasjabbwgaLjabbAha2j abbwgaLjabb6gaUjabbwha1jabbwgaLjaaysW7cqqGMbGzcqqGYbGC cqqGVbWBcqqGTbqBcaaMe8Uaee4Ba8MaeeiCaaNaeeyzauMaeeOCai NaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8MaeeOBa4Maee4CamhabaGa ee4vaCLaee4Ba8MaeeOCaiNaee4AaSMaeeyAaKMaeeOBa4Maee4zaC MaaGjbVlabboeadjabbggaHjabbchaWjabbMgaPjabbsha0jabbgga HjabbYgaSbaaaeaacqqGxbWvcqqGVbWBcqqGYbGCcqqGRbWAcqqGPb qAcqqGUbGBcqqGNbWzcaaMe8Uaee4qamKaeeyyaeMaeeiCaaNaeeyA aKMaeeiDaqNaeeyyaeMaeeiBaWMaaGjbVlabb2da9iaaysW7cqqGXa qmcqqG1aqncqqGSaalcqqG2aGncqqGWaamcqqGSaalcqqGWaamcqqG WaamcqqGWaamcaaMe8Uaeeyla0IaaGjbVlabbAda2iabbYcaSiabbc daWiabbcdaWiabbYcaSiabbcdaWiabbcdaWiabbcdaWiaaysW7cqqG 9aqpcaaMe8UaeeOCaiNaeeyyaeMaeeyBa0MaaGjbVlabbMda5iabbY caSiabbAda2iabbcdaWiabbYcaSiabbcdaWiabbcdaWaqaaiabb2da 9iaaysW7daWcaaqaaiabbkdaYiabbwda1iabbYcaSiabbkdaYiabbc daWiabbYcaSiabbcdaWiabbcdaWiabbcdaWaqaaiabbMda5iabbYca SiabbAda2iabbcdaWiabbYcaSiabbcdaWiabbcdaWiabbcdaWaaaca aMe8Uaeeypa0JaaGjbVlabbkdaYiabb6caUiabbAda2iabbkdaYiaa ysW7cqqG0baDcqqGPbqAcqqGTbqBcqqGLbqzcqqGZbWCaaaa@EFED@

Q.21 Compute Working Capital Ratio, Debt Equity Ratio and Proprietary Ratio from the following information:
Paid-up Share Capital: ₹5,00,000
Current Assets: ₹4,00,000
Revenue from Operations: ₹10,00,000
13% Debentures: ₹2,00,000
Current Liabilities: ₹2,80,000

Ans.

Working Capital Turnover Ratio = Revenue from operations Working Capital Working Capital=4,00,0002,80,000=ram1,20,000 Working Capital Turnover Ratio= 10,00,000 1,20,000 =8.33times Debt equity Ratio= Debt Equity = 2,00,000 5,00,000 = 2 5 =0.4:1 Proprietary Ratio= Shareholders’ Funds Total Assets Total Assets=Total Liabilities = 5,00,000 9,80,000 = 25 49 =0.51:1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGxbGaae4BaiaabkhacaqGRbGaaeyA aiaab6gacaqGNbGaaeiiaiaaboeacaqGHbGaaeiCaiaabMgacaqG0b GaaeyyaiaabYgacaqGGaGaaeivaiaabwhacaqGYbGaaeOBaiaab+ga caqG2bGaaeyzaiaabkhacaqGGaGaaeOuaiaabggacaqG0bGaaeyAai aab+gacaqGGaGaaeypaiaaysW7daWcaaqaaiaabkfacaqGLbGaaeOD aiaabwgacaqGUbGaaeyDaiaabwgacaqGGaGaaeOzaiaabkhacaqGVb GaaeyBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaaeyyaiaabsha caqGPbGaae4Baiaab6gacaqGZbGaaeiiaaqaaiaabEfacaqGVbGaae OCaiaabUgacaqGPbGaaeOBaiaabEgacaqGGaGaae4qaiaabggacaqG WbGaaeyAaiaabshacaqGHbGaaeiBaiaaykW7aaGaaGPaVlaaykW7ca aMc8oabaGaae4vaiaab+gacaqGYbGaae4AaiaabMgacaqGUbGaae4z aiaabccacaqGdbGaaeyyaiaabchacaqGPbGaaeiDaiaabggacaqGSb GaaGPaVlaaykW7caqG9aGaaGPaVlaaykW7caqG0aGaaeilaiaabcda caqGWaGaaeilaiaabcdacaqGWaGaaeimaiaaykW7caaMc8UaeyOeI0 IaaGPaVlaaykW7caqGYaGaaeilaiaabIdacaqGWaGaaeilaiaabcda caqGWaGaaeimaiaaykW7caaMc8UaaeypaiaaykW7caaMc8UaaeOCai aabggacaqGTbGaaGjbVlaabgdacaqGSaGaaeOmaiaabcdacaqGSaGa aeimaiaabcdacaqGWaaabaGaaGPaVlaaykW7caqGxbGaae4Baiaabk hacaqGRbGaaeyAaiaab6gacaqGNbGaaeiiaiaaboeacaqGHbGaaeiC aiaabMgacaqG0bGaaeyyaiaabYgacaqGGaGaaeivaiaabwhacaqGYb GaaeOBaiaab+gacaqG2bGaaeyzaiaabkhacaqGGaGaaeOuaiaabgga caqG0bGaaeyAaiaab+gacaaMe8UaaGPaVlaab2dacaaMe8+aaSaaae aacaqGXaGaaeimaiaabYcacaqGWaGaaeimaiaabYcacaqGWaGaaeim aiaabcdacaaMc8UaaGPaVdqaaiaabgdacaqGSaGaaeOmaiaabcdaca qGSaGaaeimaiaabcdacaqGWaaaaiaaysW7caqG9aGaaGzaVlaaysW7 caqG4aGaaeOlaiaabodacaqGZaGaaGPaVlaaykW7caaMc8UaaeiDai aabMgacaqGTbGaaeyzaiaabohaaeaacaqGebGaaeyzaiaabkgacaqG 0bGaaeiiaiaabwgacaqGXbGaaeyDaiaabMgacaqG0bGaaeyEaiaabc cacaqGsbGaaeyyaiaabshacaqGPbGaae4BaiaaysW7caqG9aGaaGjb VpaalaaabaGaaeiraiaabwgacaqGIbGaaeiDaiaabccacaqGGaGaaG PaVdqaaiaaykW7caqGfbGaaeyCaiaabwhacaqGPbGaaeiDaiaabMha caqGGaGaaeiiaiaaykW7aaGaaGPaVdqaaiaabccacaqG9aGaaGjbVp aalaaabaGaaeOmaiaabYcacaqGWaGaaeimaiaabYcacaqGWaGaaeim aiaabcdacaqGGaGaaGPaVdqaaiaabwdacaqGSaGaaeimaiaabcdaca qGSaGaaeimaiaabcdacaqGWaGaaeiiaiaabccacaaMc8oaaiaaysW7 caqG9aGaaGzaVlaaysW7daWcaaqaaiaabkdaaeaacaqG1aaaaiaayg W7caaMe8UaaeypaiaaysW7caqGWaGaaeOlaiaabsdacaqG6aGaaeym aaqaaiaabcfacaqGYbGaae4BaiaabchacaqGYbGaaeyAaiaabwgaca qG0bGaaeyyaiaabkhacaqG5bGaaeiiaiaabkfacaqGHbGaaeiDaiaa bMgacaqGVbGaaGjbVlaab2dacaaMe8+aaSaaaeaacaqGtbGaaeiAai aabggacaqGYbGaaeyzaiaabIgacaqGVbGaaeiBaiaabsgacaqGLbGa aeOCaiaabohacaqGNaGaaeiiaiaabAeacaqG1bGaaeOBaiaabsgaca qGZbGaaeiiaiaabccacaaMc8oabaGaaGPaVlaabsfacaqGVbGaaeiD aiaabggacaqGSbGaaeiiaiaabgeacaqGZbGaae4CaiaabwgacaqG0b Gaae4CaiaabccacaqGGaGaaeiiaiaaykW7aaGaaGPaVdqaaiaabsfa caqGVbGaaeiDaiaabggacaqGSbGaaeiiaiaabgeacaqGZbGaae4Cai aabwgacaqG0bGaae4CaiaaysW7caqG9aGaaGjbVlaabsfacaqGVbGa aeiDaiaabggacaqGSbGaaeiiaiaabYeacaqGPbGaaeyyaiaabkgaca qGPbGaaeiBaiaabMgacaqG0bGaaeyAaiaabwgacaqGZbGaaeiiaaqa aiaabccacaqG9aGaaGjbVpaalaaabaGaaeynaiaabYcacaqGWaGaae imaiaabYcacaqGWaGaaeimaiaabcdacaqGGaGaaGPaVdqaaiaabMda caqGSaGaaeioaiaabcdacaqGSaGaaeimaiaabcdacaqGWaGaaeiiai aabccacaaMc8oaaiaaysW7caaMc8UaaeypaiaaykW7caaMe8+aaSaa aeaacaqGYaGaaeynaaqaaiaabsdacaqG5aaaaiaaykW7caaMe8Uaae ypaiaaygW7caaMe8UaaGPaVlaabcdacaqGUaGaaeynaiaabgdacaqG 6aGaaeymaaaaaa@C772@

Q.22 Calculate Inventory Turnover Ratio if : Inventory in the beginning is ₹76,250. Inventory at the end is ₹98,500. Sales is ₹5,20,000. Sales Return is ₹20,000, Purchases is ₹3,22,250.

Ans.

Sales means Revenue from operations Cost of goods sold means Cost of revenue from operations Inventory Turnover Ratio = Cost of revenue from operations Average inventory Average Inventory= 76,250 + 98,500 2 =87,375 Cost of reve. from operations = 76,250 + 3,22,25098,500 = ₹3,00,000 Inventory Turnover Ratio = 3,00,000 87,375 =3.43times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaaqaaaaaaaaaWdbiaabofacaqGHbGaaeiB aiaabwgacaqGZbGaaeiiaiaab2gacaqGLbGaaeyyaiaab6gacaqGZb GaaeiiaiaabkfacaqGLbGaaeODaiaabwgacaqGUbGaaeyDaiaabwga caqGGaGaaeOzaiaabkhacaqGVbGaaeyBaiaabccacaqGVbGaaeiCai aabwgacaqGYbGaaeyyaiaabshacaqGPbGaae4Baiaab6gacaqGZbaa baGaae4qaiaab+gacaqGZbGaaeiDaiaabccacaqGVbGaaeOzaiaabc cacaqGNbGaae4Baiaab+gacaqGKbGaae4CaiaabccacaqGZbGaae4B aiaabYgacaqGKbGaaeiiaiaab2gacaqGLbGaaeyyaiaab6gacaqGZb GaaeiiaiaaboeacaqGVbGaae4CaiaabshacaqGGaGaae4BaiaabAga caqGGaGaaeOCaiaabwgacaqG2bGaaeyzaiaab6gacaqG1bGaaeyzai aabccacaqGMbGaaeOCaiaab+gacaqGTbGaaeiiaiaab+gacaqGWbGa aeyzaiaabkhacaqGHbGaaeiDaiaabMgacaqGVbGaaeOBaiaabohaa8 aabaGaaeysaiaab6gacaqG2bGaaeyzaiaab6gacaqG0bGaae4Baiaa bkhacaqG5bGaaeiiaiaabsfacaqG1bGaaeOCaiaab6gacaqGVbGaae ODaiaabwgacaqGYbGaaeiiaiaabkfacaqGHbGaaeiDaiaabMgacaqG VbGaaeiiaiaab2dacaaMe8+aaSaaaeaacaqGdbGaae4Baiaabohaca qG0bGaaeiiaiaab+gacaqGMbGaaeiiaiaabkhacaqGLbGaaeODaiaa bwgacaqGUbGaaeyDaiaabwgacaqGGaGaaeOzaiaabkhacaqGVbGaae yBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaaeyyaiaabshacaqG PbGaae4Baiaab6gacaqGZbGaaeiiaiaabccacaqGGaGaaGPaVdqaai aabgeacaqG2bGaaeyzaiaabkhacaqGHbGaae4zaiaabwgacaqGGaGa aeyAaiaab6gacaqG2bGaaeyzaiaab6gacaqG0bGaae4Baiaabkhaca qG5bGaaeiiaiaabccacaaMc8oaaaqaaiaabgeacaqG2bGaaeyzaiaa bkhacaqGHbGaae4zaiaabwgacaqGGaGaaeysaiaab6gacaqG2bGaae yzaiaab6gacaqG0bGaae4BaiaabkhacaqG5bGaaGjbVlaab2dacaaM e8+aaSaaaeaacaqG3aGaaeOnaiaabYcacaqGYaGaaeynaiaabcdaca qGGaGaae4kaiaabccacaqG5aGaaeioaiaabYcacaqG1aGaaeimaiaa bcdacaqGGaGaaeiiaiaabccacaaMc8oabaGaaeOmaiaabccacaqGGa GaaGPaVdaacaaMe8UaaeypaiaaykW7caaMc8UaaeOCaiaabggacaqG TbGaaGjbVlaabIdacaqG3aGaaeilaiaabodacaqG3aGaaeynaaqaai aaboeacaqGVbGaae4CaiaabshacaqGGaGaae4BaiaabAgacaqGGaGa aeOCaiaabwgacaqG2bGaaeyzaiaab6cacaqGGaGaaeOzaiaabkhaca qGVbGaaeyBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaaeyyaiaa bshacaqGPbGaae4Baiaab6gacaqGZbGaaeiiaiaab2dacaqGGaGaae 4naiaabAdacaqGSaGaaeOmaiaabwdacaqGWaGaaeiiaiaabUcacaqG GaGaae4maiaabYcacaqGYaGaaeOmaiaabYcacaqGYaGaaeynaiaabc dacaaMe8UaeyOeI0IaaGjbVlaabMdacaqG4aGaaeilaiaabwdacaqG WaGaaeimaaqaaiaab2dacaqGGaGaaeOCaiaabggacaqGTbGaaGjbVl aabodacaqGSaGaaeimaiaabcdacaqGSaGaaeimaiaabcdacaqGWaaa baGaaeysaiaab6gacaqG2bGaaeyzaiaab6gacaqG0bGaae4Baiaabk hacaqG5bGaaeiiaiaabsfacaqG1bGaaeOCaiaab6gacaqGVbGaaeOD aiaabwgacaqGYbGaaeiiaiaabkfacaqGHbGaaeiDaiaabMgacaqGVb Gaaeiiaiaab2dacaqGGaWaaSaaaeaacaqGZaGaaeilaiaabcdacaqG WaGaaeilaiaabcdacaqGWaGaaeimaiaabccacaqGGaGaaeiiaiaayk W7aeaacaqG4aGaae4naiaabYcacaqGZaGaae4naiaabwdacaqGGaGa aeiiaiaaykW7aaGaaGPaVlaaykW7caqG9aGaaGPaVlaaykW7caaMc8 Uaae4maiaab6cacaqG0aGaae4maiaaykW7caaMc8UaaeiDaiaabMga caqGTbGaaeyzaiaabohacaaMc8oaaaa@8285@

Q.23 Calculate Inventory Turnover ratio from the data given below:
Inventory in the beginning of the year: ₹10,000
Inventory at the end of the year: ₹5,000
Carriage: ₹2,500
Revenue from Operations: ₹50,000
Purchases: ₹25,000

Ans.

Inventory Turnover Ratio = Costofrevenuefromoperations Averageinventory AverageInventory = ₹10,000 + ₹5,000 2 = ₹7,500 Cost of reve, from operations = ₹10,000 + ₹25,000 + ₹2,500 – ₹5,000 = ₹32,500 InventoryTurnoverRatio= ₹32,500 ₹7,500 = 4.33times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbuLwBLn hiov2DGi1BTfMBaeXafv3ySLgzGmvETj2BSbqefm0B1jxALjhiov2D aebbfv3ySLgzGueE0jxyaibaieYlf9irVeeu0dXdh9vqqj=hEeeu0x Xdbba9frFj0=OqFfea0dXdd9vqaq=JfrVkFHe9pgea0dXdar=Jb9hs 0dXdbPYxe9vr0=vr0=vqpWqaaeaabaGaaiaacaqabeaadaqaaqaaaO abaeqabaGaaeysaiaab6gacaqG2bGaaeyzaiaab6gacaqG0bGaae4B aiaabkhacaqG5bGaaeiiaiaabsfacaqG1bGaaeOCaiaab6gacaqGVb GaaeODaiaabwgacaqGYbGaaeiiaiaabkfacaqGHbGaaeiDaiaabMga caqGVbGaaeiiaiaab2dadaWcaaqaaiaaboeacaqGVbGaae4Caiaabs hacaaMe8Uaae4BaiaabAgacaaMe8UaaeOCaiaabwgacaqG2bGaaeyz aiaab6gacaqG1bGaaeyzaiaaysW7caqGMbGaaeOCaiaab+gacaqGTb GaaGjbVlaab+gacaqGWbGaaeyzaiaabkhacaqGHbGaaeiDaiaabMga caqGVbGaaeOBaiaabohaaeaacaqGbbGaaeODaiaabwgacaqGYbGaae yyaiaabEgacaqGLbGaaGjbVlaabMgacaqGUbGaaeODaiaabwgacaqG UbGaaeiDaiaab+gacaqGYbGaaeyEaaaaaeaacaqGbbGaaeODaiaabw gacaqGYbGaaeyyaiaabEgacaqGLbGaaGjbVlaabMeacaqGUbGaaeOD aiaabwgacaqGUbGaaeiDaiaab+gacaqGYbGaaeyEaiaab2dadaWcaa qaaiaabgdacaqGWaGaaeilaiaabcdacaqGWaGaaeimaiaabUcacaqG 1aGaaeilaiaabcdacaqGWaGaaeimaaqaaiaabkdaaaGaaeypaiaabk hacaqG3aGaaeilaiaabwdacaqGWaGaaeimaaqaaiaaboeacaqGVbGa ae4CaiaabshacaqGGaGaae4BaiaabAgacaqGGaGaaeOCaiaabwgaca qG2bGaaeyzaiaabYcacaqGGaGaaeOzaiaabkhacaqGVbGaaeyBaiaa bccacaqGVbGaaeiCaiaabwgacaqGYbGaaeyyaiaabshacaqGPbGaae 4Baiaab6gacaqGZbaabaGaaeypaiaabgdacaqGWaGaaeilaiaabcda caqGWaGaaeimaiaabUcacaqGYaGaaeynaiaabYcacaqGWaGaaeimai aabcdacaqGRaGaaeOmaiaabYcacaqG1aGaaeimaiaabcdacaqGTaGa aeynaiaabYcacaqGWaGaaeimaiaabcdacaqG9aGaaeOCaiaabodaca qGYaGaaeilaiaabwdacaqGWaGaaeimaaqaaiaabMeacaqGUbGaaeOD aiaabwgacaqGUbGaaeiDaiaab+gacaqGYbGaaeyEaiaaysW7caqGub GaaeyDaiaabkhacaqGUbGaae4BaiaabAhacaqGLbGaaeOCaiaaysW7 caqGsbGaaeyyaiaabshacaqGPbGaae4BaiaaysW7caqG9aGaaeiiam aalaaabaGaae4maiaabkdacaqGSaGaaeynaiaabcdacaqGWaaabaGa ae4naiaabYcacaqG1aGaaeimaiaabcdaaaGaaeypaiaabsdacaqGUa Gaae4maiaabodacaaMe8UaaeiDaiaabMgacaqGTbGaaeyzaiaaboha aaaa@FE59@

Q.24 A trading firm’s average inventory is ₹20,000 (cost). If the inventory turnover ratio is 8 times and the firm sells goods at a Gross profit of 20% on sales, ascertain the Gross profit of the firm.

Ans.

Inventory Turnover Ratio = Cost of revenue from operations Average inventory 8 = Cost of revenue from operations 20,000 Cost of revenue from operations=20,000 × 8 =1,60,000 Profit = 1 4 ×1,60,000=40,000 If the rate of gross profit on sales is 1 5 ,then rate of gross profit on cost will be 1 4 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGjbGaaeOBaiaabAhacaqGLbGaaeOB aiaabshacaqGVbGaaeOCaiaabMhacaqGGaGaaeivaiaabwhacaqGYb GaaeOBaiaab+gacaqG2bGaaeyzaiaabkhacaqGGaGaaeOuaiaabgga caqG0bGaaeyAaiaab+gacaqGGaGaaeypaiaabccadaWcaaqaaiaabo eacaqGVbGaae4CaiaabshacaqGGaGaae4BaiaabAgacaqGGaGaaeOC aiaabwgacaqG2bGaaeyzaiaab6gacaqG1bGaaeyzaiaabccacaqGMb GaaeOCaiaab+gacaqGTbGaaeiiaiaab+gacaqGWbGaaeyzaiaabkha caqGHbGaaeiDaiaabMgacaqGVbGaaeOBaiaabohacaqGGaGaaeiiai aabccacaaMc8oabaGaaeyqaiaabAhacaqGLbGaaeOCaiaabggacaqG NbGaaeyzaiaabccacaqGPbGaaeOBaiaabAhacaqGLbGaaeOBaiaabs hacaqGVbGaaeOCaiaabMhacaqGGaGaaeiiaiaaykW7aaaabaGaaeio aiaabccacaqG9aGaaeiiamaalaaabaGaae4qaiaab+gacaqGZbGaae iDaiaabccacaqGVbGaaeOzaiaabccacaqGYbGaaeyzaiaabAhacaqG LbGaaeOBaiaabwhacaqGLbGaaeiiaiaabAgacaqGYbGaae4Baiaab2 gacaqGGaGaae4BaiaabchacaqGLbGaaeOCaiaabggacaqG0bGaaeyA aiaab+gacaqGUbGaae4CaiaabccacaqGGaGaaeiiaiaaykW7aeaaca qGYaGaaeimaiaabYcacaqGWaGaaeimaiaabcdacaqGGaGaaGPaVdaa aeaacaqGdbGaae4BaiaabohacaqG0bGaaeiiaiaab+gacaqGMbGaae iiaiaabkhacaqGLbGaaeODaiaabwgacaqGUbGaaeyDaiaabwgacaqG GaGaaeOzaiaabkhacaqGVbGaaeyBaiaabccacaqGVbGaaeiCaiaabw gacaqGYbGaaeyyaiaabshacaqGPbGaae4Baiaab6gacaqGZbGaaGPa VlaaykW7caqG9aGaaGPaVlaabkdacaqGWaGaaeilaiaabcdacaqGWa GaaeimaiaabccacaqG4bGaaeiiaiaabIdacaqGGaGaaeypaiaaykW7 caaMc8UaaeOCaiaabggacaqGTbGaaGjbVlaabgdacaqGSaGaaeOnai aabcdacaqGSaGaaeimaiaabcdacaqGWaaabaGaaeiuaiaabkhacaqG VbGaaeOzaiaabMgacaqG0bGaaeiiaiaab2dacaqGGaWaaSaaaeaaca qGXaaabaGaaeinaaaacaaMc8UaaGPaVlabgEna0kaaysW7caaMc8Ua aeymaiaabYcacaqG2aGaaeimaiaabYcacaqGWaGaaeimaiaabcdaca aMc8UaaGjbVlaab2dacaaMc8UaaGjbVlaabkhacaqGHbGaaeyBaiaa ysW7caqG0aGaaeimaiaabYcacaqGWaGaaeimaiaabcdaaeaaqaaaaa aaaaWdbiaabMeacaqGMbGaaeiiaiaabshacaqGObGaaeyzaiaabcca caqGYbGaaeyyaiaabshacaqGLbGaaeiiaiaab+gacaqGMbGaaeiiai aabEgacaqGYbGaae4BaiaabohacaqGZbGaaeiiaiaabchacaqGYbGa ae4BaiaabAgacaqGPbGaaeiDaiaabccacaqGVbGaaeOBaiaabccaca qGZbGaaeyyaiaabYgacaqGLbGaae4CaiaabccacaqGPbGaae4Caiaa ysW7daWcaaqaaiaabgdaaeaacaqG1aaaaiaabYcacaaMe8UaaeiDai aabIgacaqGLbGaaeOBaiaabccacaqGYbGaaeyyaiaabshacaqGLbGa aeiiaiaab+gacaqGMbaabaGaae4zaiaabkhacaqGVbGaae4Caiaabo hacaqGGaGaaeiCaiaabkhacaqGVbGaaeOzaiaabMgacaqG0bGaaeii aiaab+gacaqGUbGaaeiiaiaabogacaqGVbGaae4CaiaabshacaqGGa Gaae4DaiaabMgacaqGSbGaaeiBaiaabccacaqGIbGaaeyzaiaaysW7 daWcaaqaaiaabgdaaeaacaqG0aaaaaaaaa@597E@

Q.25 You are able to collect the following information about a company for two years:

Particulars 2015-16 2016-2017
Trade receivables on Apr. 01 4,00,000 5,00,000
Trade receivables on Mar. 31 5,60,000
Stock in trade on Mar. 31 6,00,000 9,00,000
Revenue from operations

(at gross profit of 25%)

3,00,000 24,00,000

Calculate Inventory Turnover Ratio and Trade Receivables Turnover Ratio.

Ans.

Inventory Turnover Ratio = Cost of revenue from operations Average inventory Average Inventory = ₹6,00,000 + ₹9,00,000 2 =₹7,50,000 Gross profit = 25 100 x₹24,00,000=₹6,00,000 Cost of reve. from operations = ₹24,00,000 – ₹6,00,000= ₹18,00,000 Inventory Turnover Ratio = ₹18,00,000 ₹7,50,000 =2.4times Trade Receivables Turnover Ratio = Credit revenue from operations Average trade receivables Average Trade Receivable = ₹5,00,000 + ₹5,60,000 2 =₹5,30,000 Trade Receivables Turnover Ratio = ₹24,00,000 ₹5,30,000 =4.53times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGjbGaaeOBaiaabAhacaqGLbGaaeOB aiaabshacaqGVbGaaeOCaiaabMhacaqGGaGaaeivaiaabwhacaqGYb GaaeOBaiaab+gacaqG2bGaaeyzaiaabkhacaqGGaGaaeOuaiaabgga caqG0bGaaeyAaiaab+gacaqGGaGaaeypaiaabccadaWcaaqaaiaabo eacaqGVbGaae4CaiaabshacaqGGaGaae4BaiaabAgacaqGGaGaaeOC aiaabwgacaqG2bGaaeyzaiaab6gacaqG1bGaaeyzaiaabccacaqGMb GaaeOCaiaab+gacaqGTbGaaeiiaiaab+gacaqGWbGaaeyzaiaabkha caqGHbGaaeiDaiaabMgacaqGVbGaaeOBaiaabohacaqGGaGaaeiiai aabccacaaMc8oabaGaaeyqaiaabAhacaqGLbGaaeOCaiaabggacaqG NbGaaeyzaiaabccacaqGPbGaaeOBaiaabAhacaqGLbGaaeOBaiaabs hacaqGVbGaaeOCaiaabMhacaqGGaGaaeiiaiaaykW7aaaabaGaaeyq aiaabAhacaqGLbGaaeOCaiaabggacaqGNbGaaeyzaiaabccacaqGjb GaaeOBaiaabAhacaqGLbGaaeOBaiaabshacaqGVbGaaeOCaiaabMha caqGGaGaaeiiaiaab2dacaqGGaWaaSaaaeaacaqG2aGaaeilaiaabc dacaqGWaGaaeilaiaabcdacaqGWaGaaeimaiaabccacaqGRaGaaeii aiaabMdacaqGSaGaaeimaiaabcdacaqGSaGaaeimaiaabcdacaqGWa GaaeiiaiaabccacaqGGaGaaGPaVdqaaiaabkdacaqGGaGaaeiiaiaa ykW7aaGaaGPaVlaaykW7caqG9aGaaGPaVlaaykW7caqGGbGaae4nai aabYcacaqG1aGaaeimaiaabYcacaqGWaGaaeimaiaabcdaaeaacaqG hbGaaeOCaiaab+gacaqGZbGaae4CaiaabccacaqGWbGaaeOCaiaab+ gacaqGMbGaaeyAaiaabshacaqGGaGaaeypaiaabccadaWcaaqaaiaa bkdacaqG1aaabaGaaeymaiaabcdacaqGWaaaaiaaykW7caqG4bGaaG PaVlaaykW7caaMc8UaaeOmaiaabsdacaqGSaGaaeimaiaabcdacaqG SaGaaeimaiaabcdacaqGWaGaaGPaVlaaykW7caqG9aGaaGPaVlaayk W7caqGGbGaaeOnaiaabYcacaqGWaGaaeimaiaabYcacaqGWaGaaeim aiaabcdaaeaacaqGdbGaae4BaiaabohacaqG0bGaaeiiaiaab+gaca qGMbGaaeiiaiaabkhacaqGLbGaaeODaiaabwgacaqGUaGaaeiiaiaa bAgacaqGYbGaae4Baiaab2gacaqGGaGaae4BaiaabchacaqGLbGaae OCaiaabggacaqG0bGaaeyAaiaab+gacaqGUbGaae4CaiaabccacaqG 9aGaaeiiaiaabkdacaqG0aGaaeilaiaabcdacaqGWaGaaeilaiaabc dacaqGWaGaaeimaiaabccacaqGTaGaaeiiaiaabAdacaqGSaGaaeim aiaabcdacaqGSaGaaeimaiaabcdacaqGWaGaaGPaVlaab2dacaqGGa GaaeiyaiaabgdacaqG4aGaaeilaiaabcdacaqGWaGaaeilaiaabcda caqGWaGaaeimaaqaaiaabMeacaqGUbGaaeODaiaabwgacaqGUbGaae iDaiaab+gacaqGYbGaaeyEaiaabccacaqGubGaaeyDaiaabkhacaqG UbGaae4BaiaabAhacaqGLbGaaeOCaiaabccacaqGsbGaaeyyaiaabs hacaqGPbGaae4BaiaabccacaqG9aGaaeiiamaalaaabaGaaeymaiaa bIdacaqGSaGaaeimaiaabcdacaqGSaGaaeimaiaabcdacaqGWaGaae iiaiaabccacaaMc8oabaGaae4naiaabYcacaqG1aGaaeimaiaabYca caqGWaGaaeimaiaabcdacaqGGaGaaGPaVdaacaaMc8UaaGPaVlaab2 dacaaMc8UaaGPaVlaaykW7caqGYaGaaeOlaiaabsdacaaMc8UaaGPa VlaabshacaqGPbGaaeyBaiaabwgacaqGZbGaaGPaVdqaaiaabsfaca qGYbGaaeyyaiaabsgacaqGLbGaaeiiaiaabkfacaqGLbGaae4yaiaa bwgacaqGPbGaaeODaiaabggacaqGIbGaaeiBaiaabwgacaqGZbGaae iiaiaabsfacaqG1bGaaeOCaiaab6gacaqGVbGaaeODaiaabwgacaqG YbGaaeiiaiaabkfacaqGHbGaaeiDaiaabMgacaqGVbGaaeiiaiaab2 dacaqGGaWaaSaaaeaacaqGdbGaaeOCaiaabwgacaqGKbGaaeyAaiaa bshacaqGGaGaaeOCaiaabwgacaqG2bGaaeyzaiaab6gacaqG1bGaae yzaiaabccacaqGMbGaaeOCaiaab+gacaqGTbGaaeiiaiaab+gacaqG WbGaaeyzaiaabkhacaqGHbGaaeiDaiaabMgacaqGVbGaaeOBaiaabo hacaqGGaGaaeiiaiaabccacaaMc8oabaGaaeyqaiaabAhacaqGLbGa aeOCaiaabggacaqGNbGaaeyzaiaabccacaqG0bGaaeOCaiaabggaca qGKbGaaeyzaiaabccacaqGYbGaaeyzaiaabogacaqGLbGaaeyAaiaa bAhacaqGHbGaaeOyaiaabYgacaqGLbGaae4CaiaabccacaqGGaGaaG PaVdaaaeaacaqGbbGaaeODaiaabwgacaqGYbGaaeyyaiaabEgacaqG LbGaaeiiaiaabsfacaqGYbGaaeyyaiaabsgacaqGLbGaaeiiaiaabk facaqGLbGaae4yaiaabwgacaqGPbGaaeODaiaabggacaqGIbGaaeiB aiaabwgacaqGGaGaaeypaiaabccadaWcaaqaaiaabwdacaqGSaGaae imaiaabcdacaqGSaGaaeimaiaabcdacaqGWaGaaeiiaiaabUcacaqG GaGaaeynaiaabYcacaqG2aGaaeimaiaabYcacaqGWaGaaeimaiaabc dacaqGGaGaaeiiaiaabccacaaMc8oabaGaaeOmaiaabccacaqGGaGa aGPaVdaacaaMc8UaaGPaVlaab2dacaaMc8UaaGPaVlaabcgacaqG1a GaaeilaiaabodacaqGWaGaaeilaiaabcdacaqGWaGaaeimaaqaaiaa bsfacaqGYbGaaeyyaiaabsgacaqGLbGaaeiiaiaabkfacaqGLbGaae 4yaiaabwgacaqGPbGaaeODaiaabggacaqGIbGaaeiBaiaabwgacaqG ZbGaaeiiaiaabsfacaqG1bGaaeOCaiaab6gacaqGVbGaaeODaiaabw gacaqGYbGaaeiiaiaabkfacaqGHbGaaeiDaiaabMgacaqGVbGaaeii aiaab2dacaqGGaWaaSaaaeaacaqGYaGaaeinaiaabYcacaqGWaGaae imaiaabYcacaqGWaGaaeimaiaabcdacaqGGaGaaeiiaiaaykW7aeaa caqG1aGaaeilaiaabodacaqGWaGaaeilaiaabcdacaqGWaGaaeimai aabccacaaMc8oaaiaaykW7caaMc8UaaeypaiaaykW7caaMc8UaaGPa VlaabsdacaqGUaGaaeynaiaabodacaaMc8UaaGPaVlaabshacaqGPb GaaeyBaiaabwgacaqGZbGaaGPaVdaaaa@287B@

Q.26 From the following Balance Sheet and other Information, Calculate following ratios:

(i) Debt-Equity Ratio

(ii) Working Capital Turnover Ratio

(iii) Trade Receivables Turnover Ratio

Balance Sheet as at March 31, 2017
Particulars
I. Equity and Liabilities:
1.Shareholder’s funds
a) Share capital 10,00,000
b) Reserves and surplus 7,00,000
c) Money received against share warrants 2,00,000
2. Non-Current Liabilities
Long term borrowings 12,00,000
3. Current liabilities
a) Trade payables 5,00,000
Total 36,00,000
II. Assets
1. Non-current Assets
Fixed assets
Tangible assets 18,00,000
2. Current Assets
  1. Inventories
4,00,000
  1. Trade Receivables
9,00,000
  1. Cash & cash equivalents
5,00,000
Total 36,00,000

Additional Information:
Revenue from Operations: ₹18,00,000

Ans.

Debt equity Ratio = Debt Equity = 12,00,000 19,00,000 =12:19 Debt = Long term borrowings =12, 00,000 Equity = Share capital + Reserves and surplus + Money received against share warrants = 10, 00,000 + 7,00,000 +2,00,000 =19, 00,000 Working Capital Turnover Ratio = Revenue from operations Working Capital Working Capital=18,00,0005,00,000=13,00,000 Working Capital Turnover Ratio= 18,00,000 13,00,000 =1.4times Trade Receivables Turnover Ratio = Credit revenue from operations Average trade receivables Trade Receivables Turnover Ratio = 18,00,000 9,00,000 =2times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGebGaaeyzaiaabkgacaqG0bGaaeii aiaabwgacaqGXbGaaeyDaiaabMgacaqG0bGaaeyEaiaabccacaqGsb 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Q.27 From the following information, calculate the following ratios:
(i) Liquid Ratio
(ii) Inventory turnover ratio
(iii) Return on investment

Inventory in the beginning: ₹50,000
Inventory at the end: ₹60,000
Net profit = ₹2,17,900
10% Debentures = ₹2,50,000
Revenue from operations: ₹4,00,000
Gross Profit: ₹1,94,000
Cash & Cash Equivalents: ₹40,000
Money received against share warrants = ₹20,000
Trade Receivables: ₹1,00,000
Trade Payables: ₹1,90,000
Other Current Liabilities: ₹70,000
Share Capital: ₹2,00,000
Reserves and Surplus: ₹1,20,000
(Balance in the Statement of Profit & Loss)

Ans.

Liquid Ratio = Liquid Assets Current Liabilities = 40,000+1,00,000 1,90,000+70,000 = 1,40,000 2,60,000 =7:13=0.54:1 Inventory Turnover Ratio = Cost of revenue from operations Average inventory Average Inventory = 50,000 + 60,000 2 =55,000 Cost of reve. from operations = 4,00,000 1,94,000= ₹2,06,000 Inventory Turnover Ratio = 2,06,000 55,000 =3.74times Return on Investment = Profit before interest and tax/ Capital employed×100 Profit before interest and tax = Rs. 2,17,900 + 25,000 = Rs. 2,42,900. 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Q.28 From the following, calculate (a) Debt-equity Ratio (b) Total Assets to Debt Ratio (c) Proprietary Ratio.
Equity Share Capital: ₹75,000
Share application money pending allotment ₹25,000
General Reserve: ₹45,000
Balance in the Statement of Profit & Loss: ₹30,000
Debentures: ₹75,000
Trade Payables: ₹40,000
Outstanding Expenses: ₹10,000

Ans.

Debt equity Ratio = Debt Equity = 75,000 1,75,000 = 3 7 =0.43:1 Debt = Debentures =75,000 Equity = Equity share capital + Share application money pending allotment + general reserve + balance in statement of profit and loss = 75,000+25,000+45,000 +30,000 =1,75,000 Total assets to debts ratio = Total Assets Debt = 3,00,000 75,000 =4:1 Total assets = Total liabilities Total liabilities = Equity + Debt + current liabilities = 1,75,000 + 75,000 + 50,000 =3,00,000 Proprietary ratio = Proprietors’ Funds Total Assets = 1,75,000 3,00,000 = 7 12 =0.58:1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGebGaaeyzaiaabkgacaqG0bGaaeii aiaabwgacaqGXbGaaeyDaiaabMgacaqG0bGaaeyEaiaabccacaqGsb 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Q.29 Cost of Revenue from Operations is ₹1,50,000. Operating expenses are ₹60,000. Revenue from Operations is ₹2,50,000. Calculate Operating Ratio.

Ans.

Operating Ratio = Operatingcost Net revenue from operations x100 Oper.cost=Costofrev. from oper.+oper.exp. = ₹2,10,000 ₹2,50,000 x100=84% MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedu uDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wD YLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYf gasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9 q8WqFfea0=yr0RYxir=Jbba9q8aq0=yq=He9q8qqQ8frFve9Fve9Ff 0dmeaabaqaaiaacaGaaeqabaWaaqaafaaakqaabeqaaiabb+eapjab bchaWjabbwgaLjabbkhaYjabbggaHjabbsha0jabbMgaPjabb6gaUj abbEgaNjabbccaGiabbkfasjabbggaHjabbsha0jabbMgaPjabb+ga VjabbccaGiabb2da9iabbccaGmaalaaabaGaee4ta8KaeeiCaaNaee yzauMaeeOCaiNaeeyyaeMaeeiDaqNaeeyAaKMaeeOBa4Maee4zaCMa aGPaVlaaykW7cqqGJbWycqqGVbWBcqqGZbWCcqqG0baDcqqGGaaicq qGGaaicaaMc8oabaGaeeOta4KaeeyzauMaeeiDaqNaeeiiaaIaeeOC aiNaeeyzauMaeeODayNaeeyzauMaeeOBa4MaeeyDauNaeeyzauMaee iiaaIaeeOzayMaeeOCaiNaee4Ba8MaeeyBa0MaeeiiaaIaee4Ba8Ma eeiCaaNaeeyzauMaeeOCaiNaeeyyaeMaeeiDaqNaeeyAaKMaee4Ba8 MaeeOBa4Maee4CamNaeeiiaaIaeeiiaaIaaGPaVdaacaaMc8UaaGPa VlabbIha4jaaykW7caaMc8UaeeymaeJaeeimaaJaeeimaadabaGaee 4ta8KaeeiCaaNaeeyzauMaeeOCaiNaeeOla4IaaGPaVlaaykW7cqqG JbWycqqGVbWBcqqGZbWCcqqG0baDcaaMc8UaaGPaVlabb2da9iaayk W7caaMc8Uaee4qamKaee4Ba8Maee4CamNaeeiDaqNaaGPaVlaaykW7 cqqGVbWBcqqGMbGzcaaMc8UaeeOCaiNaeeyzauMaeeODayNaeeOla4 IaeeiiaaIaeeOzayMaeeOCaiNaee4Ba8MaeeyBa0MaeeiiaaIaee4B a8MaeeiCaaNaeeyzauMaeeOCaiNaeeOla4IaaGPaVlabbUcaRiaayk W7cqqGVbWBcqqGWbaCcqqGLbqzcqqGYbGCcqqGUaGlcaaMb8UaaGza VlaaygW7caaMb8UaaGzaVlaaykW7caaMc8UaeeyzauMaeeiEaGNaee iCaaNaeeOla4cabaGaeeypa0JaaGPaVpaalaaabaGaeeOmaiJaeeil aWIaeeymaeJaeeimaaJaeeilaWIaeeimaaJaeeimaaJaeeimaaJaaG PaVdqaaiabbkdaYiabbYcaSiabbwda1iabbcdaWiabbYcaSiabbcda WiabbcdaWiabbcdaWaaacaaMc8UaaGPaVlabbIha4jaaykW7caaMc8 UaeeymaeJaeeimaaJaeeimaaJaaGPaVlaaykW7cqqG9aqpcaaMc8Ua eeioaGJaeeinaqJaeeyjaucaaaa@151F@

Q.30 Calculate the following ratio on the basis of following information:

(i) Gross Profit Ratio

(ii) Current Ratio

(iii) Acid Test Ratio

(iv) Inventory Turnover Ratio

(v) Fixed Assets Turnover Ratio

Gross profit: ₹50,000

Revenue from Operations: ₹1,00,000

Inventory: ₹15,000

Trade Receivables: ₹27,500

Cash & Cash Equivalents: ₹17,500

Current Liabilities: ₹40,000

Land & Building: ₹50,000

Plant & Machinery: ₹30,000

Furniture: ₹20,000

Ans.

Gross Profit Ratio = GrossProfit Net revenue from operations x100 Gross Profit Ratio == ₹50,000 ₹1,00,000 x100=50% Current Ratio = Current Assets Current Liabilities Current Assets=₹15,000+₹27,500 + ₹17,500=₹60,000 = ₹60,000 ₹40,000 = 3 2 =1.5:1 Liquid Ratio = Liquid Assets Current Liabilities Liquid Assets=₹27,500 + ₹17,500=₹45,000 = ₹45,000 ₹40,000 = 9 8 =1.12:1 Inventory Turnover Ratio = Cost of revenue from operations Average inventory Cost of reve. from operations = ₹1,00,000 – ₹50,000= ₹50,000 Inventory Turnover Ratio = ₹50,000 ₹15,000 =3.33times Fixed Assets Turnover Ratio = Revenue from operations Net fixed assets Net fixed assets = 50,000+30,000+20,000= ₹1,00,000 Inventory Turnover Ratio = ₹1,00,000 ₹1,00,000 =1:1 MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfKttLearuGu1bxzLbIrVjxyKLwyUbqedu uDJXwAKbYu51MyVXgatCvAUfeBSjuyZL2yd9gzLbvyNv2CaeHbd9wD YLwzYbItLDharyavP1wzZbItLDhis9wBH5garqqr1ngBPrgifHhDYf gasaacH8srps0lbbf9q8WrFfeuY=Hhbbf9v8qqaqFr0xc9pk0xbba9 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Q.31 From the following information, Calculate Gross profit ratio, Inventory Turnover Ratio and Trade Receivables Ratio.

Revenue from Operations: ₹3,00,000

Cost of Revenue from Operations: ₹2,40,000

Inventory at the end: ₹62,000

Gross Profit: ₹60,000

Inventory in the beginning: ₹58,000

Trade Receivables: ₹32,000

Ans.

Gross Profit Ratio = GrossProfit Net revenue from operations x100 Gross Profit = ₹3,00,000 – ₹2,40,000 = ₹60,000 Gross Profit Ratio == ₹60,000 ₹3,00,000 x100=20% Inventory Turnover Ratio = Cost of revenue from operations Average inventory Average Inventory = ₹58,000 + ₹62,000 2 =₹60,000 Inventory Turnover Ratio = ₹2,40,000 ₹60,000 =4times Trade Receivables Turnover Ratio = Credit revenue from operations Average trade receivables Trade Receivables Turnover Ratio = ₹3,00,000 ₹32,000 =9.4times MathType@MTEF@5@5@+= feaahqart1ev3aaatCvAUfeBSjuyZL2yd9gzLbvyNv2CaerbwvMCKf MBHbqeduuDJXwAKbYu51MyVXgaruWqVvNCPvMCG4uz3bqefqvATv2C G4uz3bIuV1wyUbqeeuuDJXwAKbsr4rNCHbGeaGqiVu0Je9sqqrpepC 0xbbL8F4rqqrFfpeea0xe9Lq=Jc9vqaqpepm0xbba9pwe9Q8fs0=yq aqpepae9pg0FirpepeKkFr0xfr=xfr=xb9adbaqaaeaacaGaaiaabe qaamaaeaqbaaGceaqabeaacaqGhbGaaeOCaiaab+gacaqGZbGaae4C aiaabccacaqGqbGaaeOCaiaab+gacaqGMbGaaeyAaiaabshacaqGGa GaaeOuaiaabggacaqG0bGaaeyAaiaab+gacaqGGaGaaeypaiaabcca daWcaaqaaiaabEeacaqGYbGaae4BaiaabohacaqGZbGaaGPaVlaayk W7caaMc8UaaeiuaiaabkhacaqGVbGaaeOzaiaabMgacaqG0bGaaeii aiaabccacaaMc8oabaGaaeOtaiaabwgacaqG0bGaaeiiaiaabkhaca qGLbGaaeODaiaabwgacaqGUbGaaeyDaiaabwgacaqGGaGaaeOzaiaa bkhacaqGVbGaaeyBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaae yyaiaabshacaqGPbGaae4Baiaab6gacaqGZbGaaeiiaiaabccacaaM c8oaaiaaykW7caaMc8UaaeiEaiaaykW7caaMc8Uaaeymaiaabcdaca qGWaaabaGaae4raiaabkhacaqGVbGaae4CaiaabohacaqGGaGaaeiu aiaabkhacaqGVbGaaeOzaiaabMgacaqG0bGaaeiiaiaab2dacaqGGa Gaae4maiaabYcacaqGWaGaaeimaiaabYcacaqGWaGaaeimaiaabcda caqGGaGaaeylaiaabccacaqGYaGaaeilaiaabsdacaqGWaGaaeilai aabcdacaqGWaGaaeimaiaabccacaqG9aGaaeiiaiaabcgacaqG2aGa aeimaiaabYcacaqGWaGaaeimaiaabcdaaeaacaqGhbGaaeOCaiaab+ gacaqGZbGaae4CaiaabccacaqGqbGaaeOCaiaab+gacaqGMbGaaeyA aiaabshacaqGGaGaaeOuaiaabggacaqG0bGaaeyAaiaab+gacaqGGa Gaaeypaiaab2dacaaMc8+aaSaaaeaacaqG2aGaaeimaiaabYcacaqG WaGaaeimaiaabcdacaaMc8oabaGaae4maiaabYcacaqGWaGaaeimai aabYcacaqGWaGaaeimaiaabcdaaaGaaGPaVlaaykW7caqG4bGaaGPa VlaaykW7caqGXaGaaeimaiaabcdacaaMc8UaaGPaVlaab2dacaaMc8 UaaGPaVlaabkdacaqGWaGaaeyjaaqaaiaabMeacaqGUbGaaeODaiaa bwgacaqGUbGaaeiDaiaab+gacaqGYbGaaeyEaiaabccacaqGubGaae yDaiaabkhacaqGUbGaae4BaiaabAhacaqGLbGaaeOCaiaabccacaqG sbGaaeyyaiaabshacaqGPbGaae4BaiaabccacaqG9aGaaeiiamaala aabaGaae4qaiaab+gacaqGZbGaaeiDaiaabccacaqGVbGaaeOzaiaa bccacaqGYbGaaeyzaiaabAhacaqGLbGaaeOBaiaabwhacaqGLbGaae iiaiaabAgacaqGYbGaae4Baiaab2gacaqGGaGaae4BaiaabchacaqG LbGaaeOCaiaabggacaqG0bGaaeyAaiaab+gacaqGUbGaae4Caiaabc cacaqGGaGaaeiiaiaaykW7aeaacaqGbbGaaeODaiaabwgacaqGYbGa aeyyaiaabEgacaqGLbGaaeiiaiaabMgacaqGUbGaaeODaiaabwgaca qGUbGaaeiDaiaab+gacaqGYbGaaeyEaiaabccacaqGGaGaaGPaVdaa aeaacaqGbbGaaeODaiaabwgacaqGYbGaaeyyaiaabEgacaqGLbGaae iiaiaabMeacaqGUbGaaeODaiaabwgacaqGUbGaaeiDaiaab+gacaqG YbGaaeyEaiaabccacaqGGaGaaeypaiaabccadaWcaaqaaiaabwdaca qG4aGaaeilaiaabcdacaqGWaGaaeimaiaabccacaqGRaGaaeiiaiaa bAdacaqGYaGaaeilaiaabcdacaqGWaGaaeimaiaabccacaqGGaGaae iiaiaaykW7aeaacaqGYaGaaeiiaiaabccacaaMc8oaaiaaykW7caaM c8UaaeypaiaaykW7caaMc8UaaeiyaiaabAdacaqGWaGaaeilaiaabc dacaqGWaGaaeimaaqaaiaabMeacaqGUbGaaeODaiaabwgacaqGUbGa aeiDaiaab+gacaqGYbGaaeyEaiaabccacaqGubGaaeyDaiaabkhaca qGUbGaae4BaiaabAhacaqGLbGaaeOCaiaabccacaqGsbGaaeyyaiaa bshacaqGPbGaae4BaiaabccacaqG9aGaaeiiamaalaaabaGaaeOmai aabYcacaqG0aGaaeimaiaabYcacaqGWaGaaeimaiaabcdacaqGGaGa aeiiaiaaykW7aeaacaqG2aGaaeimaiaabYcacaqGWaGaaeimaiaabc dacaqGGaGaaGPaVdaacaaMc8UaaGPaVlaab2dacaaMc8UaaGPaVlaa ykW7caqG0aGaaGPaVlaaykW7caqG0bGaaeyAaiaab2gacaqGLbGaae 4CaiaaykW7aeaacaqGubGaaeOCaiaabggacaqGKbGaaeyzaiaabcca caqGsbGaaeyzaiaabogacaqGLbGaaeyAaiaabAhacaqGHbGaaeOyai aabYgacaqGLbGaae4CaiaabccacaqGubGaaeyDaiaabkhacaqGUbGa ae4BaiaabAhacaqGLbGaaeOCaiaabccacaqGsbGaaeyyaiaabshaca qGPbGaae4BaiaabccacaqG9aGaaeiiamaalaaabaGaae4qaiaabkha caqGLbGaaeizaiaabMgacaqG0bGaaeiiaiaabkhacaqGLbGaaeODai aabwgacaqGUbGaaeyDaiaabwgacaqGGaGaaeOzaiaabkhacaqGVbGa aeyBaiaabccacaqGVbGaaeiCaiaabwgacaqGYbGaaeyyaiaabshaca qGPbGaae4Baiaab6gacaqGZbGaaeiiaiaabccacaqGGaGaaGPaVdqa aiaabgeacaqG2bGaaeyzaiaabkhacaqGHbGaae4zaiaabwgacaqGGa GaaeiDaiaabkhacaqGHbGaaeizaiaabwgacaqGGaGaaeOCaiaabwga caqGJbGaaeyzaiaabMgacaqG2bGaaeyyaiaabkgacaqGSbGaaeyzai aabohacaqGGaGaaeiiaiaaykW7aaaabaGaaeivaiaabkhacaqGHbGa aeizaiaabwgacaqGGaGaaeOuaiaabwgacaqGJbGaaeyzaiaabMgaca qG2bGaaeyyaiaabkgacaqGSbGaaeyzaiaabohacaqGGaGaaeivaiaa bwhacaqGYbGaaeOBaiaab+gacaqG2bGaaeyzaiaabkhacaqGGaGaae OuaiaabggacaqG0bGaaeyAaiaab+gacaqGGaGaaeypaiaabccadaWc aaqaaiaabodacaqGSaGaaeimaiaabcdacaqGSaGaaeimaiaabcdaca qGWaGaaeiiaiaabccacaaMc8oabaGaae4maiaabkdacaqGSaGaaeim aiaabcdacaqGWaGaaeiiaiaaykW7aaGaaGPaVlaaykW7caqG9aGaaG PaVlaaykW7caaMc8Uaaeyoaiaab6cacaqG0aGaaGPaVlaaykW7caqG 0bGaaeyAaiaab2gacaqGLbGaae4CaiaaykW7aaaa@20A1@

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