Problem 3-14 Comprehensive Ratio Analysis Solution
TS Grewal solutions for Class 12 Accountancy - Analysis of Financial Statements Chapter 3 Accounting RatiosExercise [Pages 91 - 110]
Exercise | Q 1 | Page 91
From the following compute Current Ratio:
| ₹ | ₹ | |||
| Trade Receivable (Sundry Debtors) | 1,80,000 | Bills Payable | 20,000 | |
| Prepaid Expenses | 40,000 | Sundry Creditors | 1,00,000 | |
| Cash and Cash Equivalents | 50,000 | Debentures | 4,00,000 | |
| Marketable Securities | 50,000 | Inventories | 80,000 | |
| Land and Building | 5,00,000 | Expenses Payable | 80,000 |
Exercise | Q 2 | Page 91
Calculate Current Ratio from the following information:
| Particulars | ₹ | Particulars | ₹ | ||
| Total Assets | 5,00,000 | Non-current Liabilities | 1,30,000 | ||
| Fixed Tangible Assets | 2,50,000 | Non-current Investments | 1,50,000 | ||
| Shareholders' Funds | 3,20,000 | ||||
Exercise | Q 3 | Page 91
Current Ratio is 2.5, Working Capital is ₹ 1,50,000. Calculate the amount of Current Assets and Current Liabilities.
Exercise | Q 4 | Page 91
Working Capital is ₹ 9,00,000; Trade payables ₹ 90,000; and Other Current Liabilities are ₹ 2,10,000. Circulate Current Ratio.
Exercise | Q 5 | Page 91
Working Capital ₹ 1,80,000; Total Debts ₹ 3,90,000; Long-Term Debts ₹ 3,00,000.
Calculate Current Ratio.
Exercise | Q 6 | Page 91
Current Assets are ₹ 7,50,000 and Working Capital is ₹ 2,50,000. Calculate Current Ratio.
Exercise | Q 7 | Page 91
Trade Payables ₹ 50,000, Working Capital ₹ 9,00,000, Current Liabilities ₹ 3,00,000. Calculate Current Ratio.
Exercise | Q 8 | Page 92
A company had Current Assets of ₹4,50,000 and Current Liabilities of ₹2,00,000. Afterwards it purchased goods for ₹30,000 on credit. Calculate Current Ratio after the purchase.
Exercise | Q 9 | Page 92
Current Liablilites of a company were ₹1,75,000 and its Current Ratio was 2:1. It paid ₹30,000 to a Creditor. Calculate Current Ratio after payment.
Exercise | Q 10 | Page 92
Ratio of Current Assets (₹3,00,000) to Current Liabilities (₹2,00,000) is 1.5:1. The accountant of the firm is interested in maintaing a Current Ratio of 2:1 by paying off a part of the Current Liabilities. Compute amount of the Current Liabilities that should be paid so that the Current Ratio at the level of 2:1 may be maintained.
Exercise | Q 11 | Page 92
Ratio of Current Assets (₹8,75,000) to Current Liabilities (₹3,50,000) is 2.5:1 The firm wants to maintain Current Ratio of 2:1 by purchasing goods on credit. Compute amount of goods that should be purchased on credit.
Exercise | Q 12 | Page 92
A firm had Current Assets of ₹5,00,000. It paid Current Liabilities of ₹1,00,000 and the Current Ratio became 2:1. Determine Current Liabilities and Working Capital before and after the payment was made.
Exercise | Q 13 | Page 92
State giving reason, whether the Current Ratio will improve or decline or will have no effect in each of the following transactions if Current Ratio is 2:1:
(a) Cash paid to Trade Payables.
(b) Bills Payable discharged.
(c) Bills Receivable endorsed to a creditor.
(d) Payment of final Dividend already declared.
(e) Purchase of Stock-in-Trade on credit.
(f) Bills Receivable endorsed to a Creditor dishonoured.
(g) Purchases of Stock-in-Trade for cash.
(h) Sale of Fixed Assets (Book Value of ₹50,000) for ₹45,000.
(i) Sale of FIxed Assets (Book Value of ₹50,000) for ₹60,000.
Exercise | Q 14 | Page 92
State giving reasons, which of the following transactions would improve, reduce or not change the Current Ratio, if Current Ratio of a company is (i) 1:1; or (ii) 0.8:1:
(a) Cash paid to Trade Payables.
(b) Purchase of Stock-in-Trade on credit.
(c) Purchase of Stock-in-Trade for cash.
(d) Payment of Dividend payable.
(e) Bills Payable discharged.
(f) Bills Receivable endorsed to a Creditor.
(g) Bills Receivable endorsed to a Creditor dishonoured.
Exercise | Q 15 | Page 93
From the following information, calculate Liquid Ratio:
| Particulars | ₹ | Particulars | ₹ | |||
| Current Assets | 2,00,000 | Trade Receivables | 1,10,000 | |||
| Inventories | 50,000 | Current Liabilities | 70,000 | |||
| Prepaid Expenses | 10,000 | |||||
Exercise | Q 16 | Page 93
Quick Assets ₹ 1,50,000; Inventory (Stock) ₹ 40,000; Prepaid Expenses ₹ 10,000; Working Capital ₹ 1,20,000. Calculate Current Ratio.
Exercise | Q 17 | Page 93
Current Assets ₹ 3,00,000; Inventories ₹ 60,000; Working Capital ₹ 2,52,000.
Calculate Quick Ratio.
Exercise | Q 18 | Page 93
Working Capital ₹ 3,60,000; Total :Debts ₹ 7,80,000; Long-term Debts ₹ 6,00,000; Inventories ₹ 1,80,000. Calcltate Liquid Ratio.
Exercise | Q 19 | Page 93
Current Liabilities of a company are ₹ 6,00,000. Its Current Ratio is 3 : 1 and Liquid Ratio is 1 : 1. Calculate value of Inventory.
Exercise | Q 20 | Page 93
X Ltd. has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. If the Inventories is ₹ 24,000; calculate total Current Liabilities and Current Assets.
Exercise | Q 21 | Page 93
X Ltd. has Current Ratio of 4.5 : 1 and a Quick Ratio of 3 : 1. If its inventory is ₹ 36,000, find out its total Current Assets and total Current Liabilities.
Exercise | Q 22 | Page 93
Current Ratio 4; Liquid Ratio 2.5; Inventory ₹ 6,00,000. Calculate Current Liabilities, Current Assets and Liquid Assets.
Exercise | Q 23 | Page 93
Current Liabilities of a company are ₹ 1,50,000. Its Current Ratio is 3 : 1 and Acid Test Ratio (Liquid Ratio) is 1 : 1. Calculate values of Current Assets, Liquid Assets and Inventory.
Exercise | Q 24 | Page 93
Xolo Ltd.'s Liquidity Ratio is 2.5 : 1. Inventory is ₹ 6,00,000. Current Ratio is 4 : 1. Find out the Current Liabilities.
Exercise | Q 25 | Page 93
Current Assets of a company is are ₹ 5,00,000. Its Current Ratio is 2.5 : 1 and Quick Ratio is 1 : 1. Calculate value of Current Liabilities, Liquid Assets and Inventory.
Exercise | Q 26 | Page 93
Quick Ratio of a company is 2:1. State giving reasons, which of the following transactions would
(i) improve, (ii) reduce, (iii) Not change the Quick Ratio:
(a) Purchase of goods for cash;
(b) Purchase of goods on credit;
(c) Sale of goods (costing ₹10,000) for ₹10,000;
(d) Sale of goods (costing ₹10,000) for ₹11,000;
(e) Cash received from Trade Receivables.
Exercise | Q 27 | Page 93
The Quick Ratio of a company is 0.8:1. State with reason, whether the following transactions will increase, decrease or not change the Quick Ratio:
(i) Purchase of loose tools for ₹2,000; (ii) Insurance premium paid in advance ₹500; (iii) Sale of goods on credit ₹3,000; (iv) Honoured a bills payable of ₹5,000 on maturity.
Exercise | Q 28 | Page 94
XYZ Limited's Inventory is ₹3,00,000. Total Liquid Assts are ₹12,00,000 and Quick Ratio is 2:1. Work out Current Ratio.
Exercise | Q 29 | Page 94
Total Assets ₹22,00,000; Fixed Assets ₹10,00,000; Capital Employed ₹20,00,000. There were no Long-term Investments.
Calculate Current Ratio.
Exercise | Q 30 | Page 94
Capital Employed ₹10,00,000; Fixed Assets ₹7,00,000; Current Liablities ₹1,00,000. There are no Long-term Investments. Calculate Current Ratio.
Exercise | Q 31 | Page 94
Following is the Balance Sheet of Crescent Chemical Works Limited as at 31st March, 2019:
| Particulars | Note | ₹ |
| I. EQUITY AND LIABILITIES : 1.Shareholder's Funds : | ||
| (a) Share Capital | 70,000 | |
| (b) Reserves and Surplus | 35,000 | |
| 2. Non-Current Liabilities : | ||
| Long-term Borrowings | 25,000 | |
| 3. Current Liabilities : | ||
| (a) Short-term Borrowings | 3,000 | |
| (b) Trade Payables (Creditors) | 13,000 | |
| (b) Short-term Provisions: Provision for Tax | 4,000 | |
| Total | 1,50,000 | |
| II. ASSETS : | ||
| 1. Non-Current Assets | ||
| (a) Fixed Assets (Tangible) | 45,000 | |
| (b) Non-current Investments | 5,000 | |
| 2. Current Assets | ||
| (a) Inventories (Stock) | 50,000 | |
| (b) Trade Receivables (Debtors) | 30,000 | |
| (c) Cash and Cash Equivalents | 20,000 | |
| Total | 1,50,000 |
Compute Current Ratio and Liquid Ratio
Exercise | Q 32 | Page 94
From the following calculate: (i) Current Ratio; and (ii) Quick Ratio:
| ₹ | ₹ | ||
| Total Debt | 6,00,000 | Long-term Borrowings | 2,00,000 |
| Total Assets | 8,00,000 | Long-term Provisions | 2,00,000 |
| Fixed Assests (Tangible) | 3,00,000 | Inventories | 95,000 |
| Non-current Investment | 50,000 | Prepaid Expenses | 5,000 |
| Long-term Loans and Advances | 50,000 |
Exercise | Q 33 | Page 94
Calculate Debt to Equity Ratio: Equity Share Capital ₹ 5,00,000; General Reserve ₹ 90,000; Accumulated Profits ₹ 50,000; 10% Debentures ₹ 1,30,000; Current Liabilities ₹ 1,00,000.
Exercise | Q 34 | Page 94
Total Assets ₹ 2,60,000; Total Debts ₹ 1,80,000; Current Liabilities ₹ 20,000. Calculate Debt to Equity Ratio.
Exercise | Q 35 | Page 95
From the following information, calculate Debt to Equity Ratio:
| ₹ | |
| 10,000 Equity Shares of ₹ 10 each fully paid | 1,00,000 |
| 5,000; 9% Preference Shares of ₹ 10 each fully paid | 50,000 |
| General Reserve | 45,000 |
| Surplus, i.e., Balance in Statement of Profit and Loss | 20,000 |
| 10% Debentures | 75,000 |
| Current Liabilities | 50,000 |
Exercise | Q 36 | Page 95
When Debt to Equity Ratio is 2, state giving reason, whether this ratio will increase or decrease or will have no change in each of the following cases:
(i) Sale of Land (Book value ₹4,00,000) for ₹5,00,000; (ii) Issue of Equity Shares for the purchase of Plant and Machinery worth ₹10,00,000; (iii) Issue of Preference Shares for redemption of 13% Debentures, worth ₹10,00,000.
Exercise | Q 37 | Page 95
Total Assets ₹12,50,000; Total Debts ₹10,00,000; Current Liabilities ₹5,00,000.
Calculate Debt to Equity Ratio.
Exercise | Q 38 | Page 95
Capital Employed ₹8,00,000; Shareholders' Funds ₹2,00,000. Calculate Debt to Equity Ratio.
Exercise | Q 39 | Page 95
Balance Sheet had the following amounts as at 31st March, 2019:
| ₹ | ₹ | |||
| 10% Preference Share Capital | 5,00,000 | Current Assets | 12,00,000 | |
| Equity Share Capital | 15,00,000 | Current Liabilities | 8,00,000 | |
| Securities Premium Reserve | 1,00,000 | Investments (in other companies) | 2,00,000 | |
| Reserves and Surplus | 4,00,000 | Fixed Assets-Cost | 60,00,000 | |
| Long-term Loan from IDBI @ 9% | 30,00,000 | Depreciation Written off | 14,00,000 |
Calculate ratios indicating the Long-term and the Short-term financial position of the company.
Exercise | Q 40 | Page 95
Calculate Debt to Equity Ratio from the following information:
| ₹ | ₹ | |||
| Fixed Assets (Gross) | 8,40,000 | Current Assets | 3,50,000 | |
| Accumulated Depreciation | 1,40,000 | Current Liabilities | 2,80,000 | |
| Non-current Investments | 14,000 | 10% Long-term Borrowings | 4,20,000 | |
| Long-term Loans and Advances | 56,000 | Long-term Provisions | 1,40,000 |
Exercise | Q 41 | Page 95
Debt to Equity Ratio of a company is 0.5:1. Which of the following suggestions would increase, decrease or not change it:
(i) Issue of Equity Shares:
(ii) Cash received from debtors:
(iii) Redemption of debentures;
(iv) Purchased goods on Credit?
Exercise | Q 42 | Page 95
Assuming That the Debt to Equity Ratio is 2 : 1, state giving reasons, which of the following transactions would (i) increase; (ii) Decrease; (iii) Not alter Debt to Equity Ratio:
Exercise | Q 43 | Page 96
From the following Balance Sheet of ABC Ltd. as at 31st March, 2019, Calculate Debt to Equity Ratio:
| Particulars | ₹ | |
| I. EQUITY AND LIABILITIES | ||
| 1.Shareholder's Funds | ||
| (a) Share Capital: | ||
| (i) Equity Share Capital | 5,00,000 | |
| (ii) 10% Preference Share Capital | 5,00,000 | 10,00,000 |
| (b) Reserves and Surplus | 2,40,000 | |
| 2. Non-Current Liabilities | ||
| Long-term Borrowings (Debentures) | 2,50,000 | |
| 3. Current Liabilities : | ||
| (a) Trade Payables | 4,30,000 | |
| (b) Other Current Liabilities | 20,000 | |
| (c) Short-term Provisions: Provision for Tax | 3,00,000 | |
| Total | 22,40,000 | |
| II. ASSETS | ||
| 1. Non-Current Assets | ||
| Fixed Assets: | ||
| (i) Tangible Assets | 6,40,000 | |
| (ii) Intangible Assets | 1,00,000 | |
| 2. Current Assets | ||
| (a) Inventories | 7,50,000 | |
| (b) Trade Receivables | 6,40,000 | |
| (c) Cash and Cash Equivalents | 1,10,000 | |
| Total | 22,40,000 | |
Exercise | Q 44 | Page 96
Calculate Total Assets to Debt Ratio from the following information:
Long-term Debts ₹ 4,00,000; total Assets ₹ 7,70,000.
Exercise | Q 45 | Page 96
Shareholders' Funds ₹ 1,60,000; Total Debts ₹ 3,60,000; Current Liabilities ₹ 40,000.
Calculate Total Assets to Debt Ratio.
Exercise | Q 46 | Page 96
On the basis of the following information, calculate Total Assets to Debt Ratio:
| Particulars | ₹ | Particulars | ₹ | ||
| Capital Employed | 50,00,000 | Share Capital | 35,00,000 | ||
| Current Liabilities | 20,00,000 | 10% Debentures | 10,00,000 | ||
| Land and Building | 60,00,000 | General Reserve | 3,00,000 | ||
| Trade Receivable | 4,00,000 | Surplus, i.e., Balance in Statement of Profit and Loss | 2,00,000 | ||
| Cash and Cash Equivalents | 5,00,000 | ||||
| Investment (Trade) | 1,00,000 | ||||
Exercise | Q 47 | Page 96
Total Debt ₹ 60,00,000; Shareholders' Funds ₹ 10,00,000; Reserves and Surplus ₹ 2,50,000; Current Assets ₹ 25,00,000; Working Capital ₹ 5,00,000. Calculate Total Assets to Debt Ratio.
Exercise | Q 48 | Page 97
Total Debt ₹15,00,000; Current Liablities ₹5,00,000; Capital Employed ₹15,00,000. Calculate Total Assets to Debt Ratio.
Exercise | Q 49 | Page 97
Calculate Total Assets to Debt Ratio from the following information:
| Particulars | ₹ | Particulars | ₹ | ||
| Total Assets | 15,00,000 | Bills Payable | 60,000 | ||
| Total Debts | 12,00,000 | Bank Overdraft | 50,000 | ||
| Creditors | 90,000 | Outstanding Expenses | 20,000 | ||
Exercise | Q 50 | Page 97
Total Debt ₹12,00,000; Shareholders' Funds ₹2,00,000; Reserves and Surplus ₹50,000; Current Assets ₹5,00,000; Working Capital ₹1,00,000. Calculate Total Assets to Debt Ratio.
Exercise | Q 51 | Page 97
Total Debt ₹12,00,000; Current Liabilities ₹4,00,000; Capital Employed ₹`12,00,000. Calculate Total Assets to Debt Ratio.
Exercise | Q 52 | Page 97
From the following information, calculate Total Assets to Debt Ratio:
| ₹ | ₹ | |||
| Fixed Assets (Gross) | 6,00,000 | Accumulated Depreciation | 1,00,000 | |
| Non-current Investments | 10,000 | Long-term Loans and Advances | 40,000 | |
| Current Assets | 2,50,000 | Current Liabilities | 2,00,000 | |
| Long-term Borrowings | 3,00,000 | Long-term Provisions | 1,00,000 |
Exercise | Q 53 | Page 97
From the following information, calculate Proprietary Ratio:
| Share Capital | ₹ 300000 |
| Reserve and Surplus | ₹ 180000 |
| Non-current Assets | ₹ 1320000 |
| Current Assets | ₹ 600000 |
Exercise | Q 54 | Page 97
From the following infromation, calculate Proprietary Ratio:
| ₹ | |
| Equity Share Capital | 3,00,000 |
| Preference Share Capital | 1,50,000 |
| Reserves and Surplus | 75,000 |
| Debentures | 1,80,000 |
| Trade Payables | 45,000 |
| 7,50,000 | |
| Fixed Assets | 3,75,000 |
| Short-term Inverstments | 2,25,000 |
| Other Current Assets | 1,50,000 |
| 7,50,000 |
Exercise | Q 55 | Page 97
Calculate Proprietary Ratio from the following:
| Equity Shares Capital | ₹ 4,50,000 | 9% Debentures | ₹ 3,00,000 |
| 10% Preference Share Capital | ₹ 3,20,000 | Fixed Assets | ₹ 7,00,000 |
| Reserves and Surplus | ₹ 65,000 | Trade Investment | ₹ 2,45,000 |
| Creditors | ₹ 1,10,000 | Current Assets | ₹ 3,00,000 |
Exercise | Q 56 | Page 98
From the following information, calculate Proprietary Ratio:
| Particulars | Note No. | Amount |
| I. EQUITY AND LIABILITIES 1.Shareholders' Funds | ||
| (a) Share Capital | 6,00,000 | |
| (b) Reserves and Surplus | 1,50,000 | |
| 2. Current Liabilities | ||
| (a) Trade Payables | 1,00,000 | |
| (b) Other Current Liabilities | 50,000 | |
| (c) Short-term Provisions (Provision for Tax) | 1,00,000 | |
| Total | 10,00,000 | |
| II. ASSETS | ||
| 1. Non-Current Assets | ||
| Fixed Assets (Tangible Assets) | 5,00,000 | |
| 2. Current Assets | ||
| (a) Current Investments | 1,50,000 | |
| (b) Inventories | 1,00,000 | |
| (c) Trade Receivables | 1,50,000 | |
| (d) Cash and Cash Equivalents | 1,00,000 | |
| Total | 10,00,000 |
Exercise | Q 57 | Page 98
State with reason, whether the Proprietary Ratio will improve, decline or will not change because of the following transactions if Proprietary Ratio is 0.8 : 1:
(i) Obtained a loan of ₹ 5,00,000 from State Bank of India payable after five years.
(ii) Purchased machinery of ₹ 2,00,000 by cheque.
(iii) Redeemed 7% Redeemable Preference Shares ₹ 3,00,000.
(iv) Issued equity shares to the vendor of building purchased for ₹ 7,00,000.
(v) Redeemed 10% redeemable debentures of ₹ 6,00,000.
Exercise | Q 58 | Page 98
If Profit before Interest and Tax is ₹5,00,000 and interest on Long-term Funds is ₹1,00,000, find Interest Coverage Ratio.
Exercise | Q 59 | Page 98
From the following information, calculate Interest Coverage Ratio: Profit after Tax ₹1,70,000; Tax ₹30,000; Interest on Long-term Funds ₹50,000.
Exercise | Q 60 | Page 98
From the following information, calculate Interest Coverage Ratio:
| ₹ | |
| 10,000 Equity Shares of ₹10 each | 1,00,000 |
| 8% Preference Shares | 70,000 |
| 10% Debentures | 50,000 |
| Long-term Loans from Bank | 50,000 |
| Interest on Long-term Loans from Bank | 5,000 |
| Profit after Tax | 75,000 |
| Tax | 9,000 |
Exercise | Q 61 | Page 99
From the following details, calculate Inventory Turnover Ratio:
| ₹ | |
| Cost of Revenue from Operations (Cost of Goods Sold) | 4,50,000 |
| Inventory in the beginning of the year | 1,25,000 |
| Inventory at the close of the year | 1,75,000 |
Exercise | Q 62 | Page 99
Cost of Revenue from Operations (Cost of Goods Sold) ₹5,00,000; Purchases ₹5,50,000; Opening Inventory ₹1,00,000.
Calculate Inventory Turnover Ratio.
Exercise | Q 63 | Page 99
Calculate Inventory Turnover Ratio from the following information:
Opening Inventory is ₹50,000; Purchases ₹3,90,000; Revenue from Operations, i.e., Net Sales ₹6,00,000; Gross Profit Ratio 30%.
Exercise | Q 64 | Page 99
Calculate Inventory Turnover Ratio from the following:
| ₹ | |
| Opening Inventory | 29,000 |
| Closing Inventory | 31,000 |
| Revenue from Operations, i.e., Sales | 3,20,000 |
| Gross Profit Ratio 25% | |
Exercise | Q 65 | Page 99
From the following information, calculate Inventory Turnover Ratio:
| ₹ | |
| Revenue from Operations | 16,00,000 |
| Average Inventory | 2,20,000 |
| Gross Loss Ratio 5% |
Exercise | Q 66 | Page 99
Revenue from Operations ₹4,00,000; Gross Profit ₹1,00,000; Closing Inventory ₹1,20,000; Excess of Closing Inventory over Opening Inventory ₹40,000. Calculate Inventory Turnover Ratio.
Exercise | Q 67 | Page 99
From the following data, calculate Inventory Turnover Ratio:
Total Sales ₹5,00,000; Sales Return ₹50,000; Gross Profit ₹90,000; Closing Inventory ₹1,00,000; Excess of Closing Inventory over Opening Inventory ₹20,000.
Exercise | Q 68 | Page 99
₹2,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold), during the year. If Inventory Turnover Ratio is 8 times, calculate inventories at the end of the year. Inventories at the end is 1.5 times that of in the beginning.
Exercise | Q 69 | Page 99
Calculate Inventory Turnover Ratio from the following information:
Opening Inventory ₹ 40,000; Purchases ₹ 3,20,000; and Closing Inventory ₹ 1,20,000.
State, giving reason, which of the following transactions would (i) increase, (ii) decrease, (iii) neither increase nor decrease the Inventory Turnover Ratio:
(a) Sale of goods for ₹ 40,000 (Cost ₹ 32,000).
(b) increase in the value of Closing Inventory by ₹ 40,000.
(c) Goods purchased for ₹ 80,000.
(d) Purchases Return ₹ 20,000.
(e) goods costing ₹ 10,000 withdrawn for personal use.
(f) Goods costing ₹ 20,000 distributed as free samples.
Exercise | Q 70 | Page 100
Calculate Inventory Turnover Ratio from the data given Below:
| Inventory in the beginning of the year | Rs 20000 |
| Inventory at the end of the year | Rs 10000 |
| Purchases | Rs 50,000 |
| Carriage Inwards | Rs 5000 |
| Revenue from Operations, i.e., Sales | Rs 100000 |
State the significance of this ratio.
Exercise | Q 71 | Page 100
From the following information, calculate value of Opening Inventory:
| Closing Inventory | = | ₹ 68,000 |
| Total Sales | = | ₹ 4,80,000 (including Cash Sales ₹ 1,20,000) |
| Total Purchases | = | ₹ 3,60,000 (including Credit Purchases ₹ 2,39,200) |
Goods are sold at a profit of 25% on cost.
Exercise | Q 72 | Page 100
From the following information, determine Opening and Closing inventories:
Inventory Turnover Ratio 5 Times, Total sales ₹ 2,00,000, Gross Profit Ratio 25%. Closing Inventory is more by ₹ 4,000 than the Opening Inventory.
Exercise | Q 73 | Page 100
Following figures have been extracted from Shivalika Mills Ltd.
Inventory in the beginning of the year ₹ 60,000.
Inventory at the end of the year ₹ 1,00,000.
Inventory Turnover Ratio 8 times.
Selling price 25% above cost.
Compute amount of Gross Profit and Revenue from Operations (Net Sales).
Exercise | Q 74 | Page 100
Inventory Turnover Ratio 5 times; Cost of Revenue from Operations (Cost of Goods Sold) ₹ 18,90,000. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning.
Exercise | Q 75 | Page 100
₹ 3,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold). Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more than the inventory at the end. Calculate value of Opening and Closing Inventories
Exercise | Q 76 | Page 100
From the following Information, calculate Inventory Turnover Ratio:
Credit Revenue from Operations ₹ 3,00,000; Cash Revenue from Operations ₹ 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. Opening Inventory was 10% of Cost of Revenue from Operations.
Exercise | Q 77 | Page 100
Calculate Inventory Turnover Ratio in each of the following alternative cases:
Case 1: Cash Sales 25% of Credit Sales; Credit Sales ₹3,00,000; Gross Profit 20% on Revenue from Operations, i.e., Net Sales; Closing Inventory ₹1,60,000; Opening Inventory ₹40,000.
Case 2: Cash Sales 20% of Total Sales; Credit Sales ₹4,50,000; Gross Profit 25% on Cost; Opening Inventory ₹37,500; Closing Inventory ₹1,12,500.
Exercise | Q 78 | Page 101
From the following Statement of Profit and Loss for the year ended 31st March, 2019 of Rex Ltd., calculate Inventory Turnover Ratio:
STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019
| Particulars | Note No. | Amount (₹) |
| I. Revenue from Operations (Net Sales) | 6,00,000 | |
| II. Expenses: | ||
| (a) Purchases of Stock-in-Trade | 3,00,000 | |
| (b) Change in Inventory of Stock-in-Trade | 1 | 50,000 |
| (c) Employees Benefit Expenses | 60,000 | |
| (d) Other Expenses | 2 | 45,000 |
| Total Expenses | 4,55,000 | |
| III. Profit before Tax (I-II) | 1,45,000 | |
| IV. Less: Tax | 45,000 | |
| V. Profit after Tax (III-IV) | 1,00,000 |
Notes to Accounts
| Particulars | Amount (₹) |
| I. Change in Inventory of stock-in-Trade | |
| Opening Inventory | 1,25,000 |
| Less: Closing Inventory | 75,000 |
| 50,000 | |
| 2. Other Expenses | |
| Carriage Inwards | 15,000 |
| Miscellaneous Expenses | 30,000 |
| 45,000 |
Exercise | Q 79 | Page 101
| Credit Revenue from Operations, i.e., Net Credit Sales for the year | 1,20,000 |
| Debtors | 12,000 |
| Billls Receivable | 8,000 |
Calculate Trade Receivables Turnover Ratio.
Exercise | Q 80 | Page 101
Calculate Trade Receivables Turnover Ratio from the following information:
| 31st March,2018 (₹) | 31st March,2019 (₹) | |
| Sundry Debtors | 28,000 | 25,000 |
| Bills Receivable | 7,000 | 15,000 |
| Provision for Doubtful Debts | 2,800 | 2,500 |
Total Sales ₹ 1,00,000; Sales Return ₹ 1,500; Cash Sales ₹ 23,500.
Exercise | Q 81 | Page 101
Closing Trade Receivables ₹ 1,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 40,000; Revenue from Operations, i.e., Net Sales ₹ 6,00,000. Calculate Trade Receivables Turnover Ratio.
Exercise | Q 82 | Page 102
Compute Trade Receivables Turnover Ratio from the following:
| 31st March, 2018(₹) | 31st March, 2019(₹) | |
| Revenue from Operations (Net Sales) | 8,00,000 | 7,00,000 |
| Debtors in the beginning of year | 83,000 | 1,17,000 |
| Debtors at the end of year | 1,17,000 | 83,000 |
| Sales Return | 1,00,000 | 50,000 |
Exercise | Q 83 | Page 102
₹ 1,75,000 is the Credit Revenue from Operations, i.e., Net Credit Sales of an enterprise. If Trade Receivables Turnover Ratio is 8 times, calculate Trade Receivables in the Beginning and at the end of the year. Trade Receivables at the end is ₹ 7,000 more than that in the beginning.
Exercise | Q 84 | Page 102
From the following particulars, determine Trade Receivables Turnover Ratio:
| ₹ | |
| Revenue from Operations (Net Sales) | 10,00,000 |
| Credit Revenue from Operations (Credit Sales) | 8,00,000 |
| Trade Receivables | 1,00,000 |
Exercise | Q 85 | Page 102
Closing Trade Receivables ₹ 1,20,000, Revenue from Operations ₹ 14,40,000. Provision for Doubtful Debts ₹ 20,000. Calculate Trade Receivables Turnover Ratio.
Exercise | Q 86 | Page 102
Closing Trade Receivables ₹ 4,00,000; Cash Sales being 25% of Credit Sales; Excess of Closing Trade Receivables over Opening Trade Receivables ₹ 2,00,000; Revenue from Operations, i.e., Revenue from Operations, i.e., Net Sales ₹ 15,00,000. Calculate Trade Receivables Turnover Ratio
[Hint: 1. Net Credit Sales = Total Sales − Cash Sales
2. Opening Trade Receivables = Closing Trade Receivables − Excess of Closing Trade Receivables over Opening Trade Receivables.]
Exercise | Q 87 | Page 102
A firm normally has trade Receivables equal to two months' credit Sales. During the coming year it expects Credit Sales of ₹ 7,20,000 spread evenly over the year (12 months). What is the estimated amount of Trade Receivables at the end of the year?
Exercise | Q 88 | Page 102
A limited company made Credit Sales of ₹ 4,00,000 during the financial period. If the collection period is 36 days and the year is assumed to be 360 days, calculate:
- Trade Receivables Turnover Ratio;
- Average Trade Receivables;
- Trade Receivables at the end when Trade Receivables at the end are more than that in the beginning by ₹ 6,000.
Exercise | Q 89 | Page 102
Cash Revenue from Operations (Cash Sales) ₹ 2,00,000, Cost of Revenue from Operations or Cost of Goods Solds ₹ 3,50,000; Gross Profit ₹ 1,50,000; Trade Receivables Turnover Ratio 3 Times. Calculate Opening and Closing Trade Receivables in each of the following alternative cases;
Case 1 : If Closing Trade Receivables were ₹ 1,00,000 in excess of Opening Trade Receivalbes.
Case 2 : If trade Receivables at the end were 3 times than in the beginning.
Case 3 ; If Trade Receivables at the end were 3 times more than that of in the beginning.
Exercise | Q 90 | Page 103
From the following information, calculate Opening and Closing Trade Receivables, if Trade Receivables Turnover Ratio is 3 Times:
(i) Cash Revenue from Operations is 1/3rd of Credit Revenue from Operations.
(ii) Cost of Revenue from Operations is ₹3,00,000.
(iii) Gross Profit is 25% of the Revenue from Operations.
(iv) Trade Receivables at the end are 3 Times more than that of in the beginning.
Exercise | Q 91 | Page 103
Calculate Trade Receivables Turnover Ratio in each of the following alternative cases:
Case 1: Net Credit Sales ₹4,00,000; Average Trade Receivables ₹1,00,000.
Case 2: Revenue from Operations (Net Sales) ₹30,00,000; Cash Revenue from Operations, i.e., Cash Sales ₹6,00,000; Opening Trade Receivables ₹2,00,000; Closing Trade Receivables ₹6,00,000.
Case 3: Cost of Revenue from Operations or Cost of Goods Sold ₹3,00,000; Gross Profit on Cost 25%; Cash Sales 20% of Total Sales; Opening Trade Receivables ₹50,000; Closing Trade Receivables ₹1,00,000.
Case 4: Cost of Revenue from Operations or Cost of Goods Sold ₹4,50,000; Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales, Opening Trade Receivables ₹90,000; Closing Trade Receivables ₹60,000.
Exercise | Q 92 | Page 103
From the information given below, calculate Trade Receivables Turnover Ratio:
Credit Revenue from Operations, i.e., Credit Sales ₹8,00,000; Opening Trade Receivables ₹1,20,000; and Closing Trade Receivables ₹2,00,000.
State giving reason, which of the following would increase, decrease or not change Trade Receivables Turnover Ratio:
(i) Collection from Trade Receivables ₹40,000.
(ii) Credit Revenue from Operations, i.e., Credit Sales ₹80,000.
(iii) Sales Return ₹20,000.
(iv) Credit Purchase ₹1,60,000.
Exercise | Q 93 | Page 103
Calculate Trade Payables Turnover Ratio and Average Debt payment Period from the following information:
| 1st April, 2018 ₹ | 31st March, 2019 ₹ | |
| Sundry Creditors | 1,50,000 | 4,50,000 |
| Bills Payable | 50,000 | 1,50,000 |
Total Purchases ₹ 21,00,000; Purchases Return ₹ 1,00,000; Cash Purchases ₹ 4,00,000.
Exercise | Q 94 | Page 103
Calculate Trade payables Turnover Ratio from the following information:
Opening Creditors ₹ 1,25,000; Opening Bills Payable ₹ 10,000; Closing Creditors ₹ 90,000; Closing bills Payable ₹ 5,000; Purchases ₹ 9,50,000; Cash Purchases ₹ 1,00,000; Purchases Return ₹ 45,000.
Exercise | Q 95 | Page 103
Calculate Trade Payables Turnover Ratio for the year 2018-19 in each of the alternative cases:
Case 1 : Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000; Purchases Return ₹ 60,000; Cash Purchases ₹ 90,000.
Case 2 : Opening Trade Payables ₹ 15,000; Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000.
Case 3 : Closing Trade Payables ₹ 45,000; Net Purchases ₹ 3,60,000.
Case 4 : Closing Trade Payables (including ₹ 25,000 due to a supplier of machinery) ₹ 55,000; Net Credit Purchases ₹ 3,60,000.
Exercise | Q 96 | Page 104
From the following information, calculate Working Capital Turnover Ratio:
| ₹ | |
| Cost of Revenue from Operations (Cost of Goods Sold) | 10,00,000 |
| Current Assets | 5,00,000 |
| Current Liabilities | 3,00,000 |
Exercise | Q 97 | Page 104
Revenue from Operations: Cash Sales ₹ 5,00,000; Credit Sales ₹ 6,00,000; Sales Return ₹ 1,00,000. Current Assets ₹ 3,00,000; Current Liabilities ₹ 1,00,000. Calculate Working Capital Turnover Ratio.
Exercise | Q 98 | Page 104
Equity Share Capital ₹ 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales `33 1/3`%; Cost Revenue from Operatins or Cost of Goods Sold ₹ 20,00,000; Current Assets ₹ 10,00,000; Current Liabilities ₹ 2,50,000. Calculate Working Capital Turnover Ratio
Exercise | Q 99 | Page 104
Gross Profit at 25% on cost; Gross profit ₹ 5,00,000; Equity Share Capital ₹ 10,00,000; Reserves and Surplus 2,00,000; Long-term Loan 3,00,000; Fixed Assets (Net) ₹ 10,00,000. Calculate Working Capital Turnover Ratio
Exercise | Q 100 | Page 104
Capital Employed ₹ 12,00,000; Net Fixed Assets 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations ₹ 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.
Exercise | Q 101 | Page 104
Calculate Working Capital Turnover Ratio from the following information:
Revenue from Operations ₹ 30,00,000; Current Assets ₹ 12,50,000; Total Assets ₹ 20,00,000; Non-current Liabilities ₹ 10,00,000, Shareholders' Funds ₹ 5,00,000.
Exercise | Q 102 | Page 104
A company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was ₹ 5,00,000; Equity Share Capital of the company was ₹ 10,00,000; Reserves and Surplus ₹ 2,00,000; Long-term Loan ₹ 3,00,000 and Non-current Assets were ₹ 10,00,000.
Compute the 'Working Capital Turnover Ratio' of the company.
Exercise | Q 103 | Page 104
Compute Gross Profit Ratio from the following information:
Cost of Revenue from Operations (Cost of Goods Sold) ₹5,40,000; Revenue from Operations (Net Sales) ₹6,00,000.
Exercise | Q 104 | Page 104
From the following, calculate Gross Profit Ratio:
Gross Profit:₹50,000; Revenue from Operations ₹5,00,000; Sales Return: ₹50,000.
Exercise | Q 105 | Page 104
Compute Gross Profit Ratio from the following information:
Revenue from Operations, i.e., Net Sales = ₹4,00,000; Gross Profit 25% on Cost.
Exercise | Q 106 | Page 105
Calculate Gross Profit Ratio from the following data:
Cash Sales are 20% of Total Sales; Credit Sales are ₹5,00,000; Purchases are ₹4,00,000; Excess of Closing Inventory over Opening Inventory ₹25,000.
Exercise | Q 107 | Page 105
From the following information, calculate Gross Profit Ratio:
| ₹ | ₹ | |||
| Credit Sales | 5,00,000 | Decrease in Inventory | 10,000 | |
| Purchases | 3,00,000 | Returns Outward | 10,000 | |
| Carriage Inwards | 10,000 | Wages | 50,000 | |
| Rate of Credit Sale to Cash Sale | 4:1 |
Exercise | Q 108 | Page 105
Calculate Gross Profit Ratio from the following data:
Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales.
Exercise | Q 109 | Page 105
(i) Revenue from Operations: Cash Sales ₹4,20,000; Credit Sales ₹6,00,000; Return ₹20,000. Cost of Revenue from Operations or Cost of Goods Sold ₹8,00,000. Calculate Gross Profit Ratio.
(ii) Average Inventory ₹1,60,000; Inventory Turnover Ratio is 6 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.
(iii) Opening Inventory ₹1,00,000; Closing Inventory ₹60,000; Inventory Turnover Ratio 8 Times; Selling Price 25% above cost. Calculate Gross Profit Ratio.
Exercise | Q 110 | Page 105
Gross Profit Ratio of a company is 25%. State giving reason, which of the following transactions will (a) increase or (b) decrease or (c) not alter the Gross Profit Ratio.
(i) Purchases of Stock-in-Trade ₹50,000.
(ii) Purchases Return ₹15,000.
(iii) Cash Sale of Stock-in-Trade ₹40,000.
(iv) Stock-in-Trade costing ₹20,000 withdrawn for personal use.
(v) Stock-in-Trade costing ₹15,000 distributed as free sample.
Exercise | Q 111 | Page 105
Cost of Revenue from Operations (Cost of Goods Sold) ₹3,00,000. Operating Expenses ₹1,20,000. Revenue from Operations: Cash Sales ₹5,20,000; Return ₹20,000. Calculate Operating Ratio.
Exercise | Q 112 | Page 105
Operating Ratio 92%; Operating Expenses ₹94,000; Revenue from Operations ₹6,00,000; Sales Return ₹40,000. Calculate Cost of Revenue from Operations (Cost of Goods Sold).
Exercise | Q 113 | Page 105
(i) Cost of Revenue from Operations (Cost of Goods Sold) ₹2,20,000; Revenue from Operations (Net Sales) ₹3,20,000; Selling Expenses ₹12,000; Office Expenses ₹8,000; Depreciation ₹6,000. Calculate Operating Ratio.
(ii) Revenue from Operations, Cash Sales ₹4,00,000; Credit Sales ₹1,00,000; Gross Profit ₹1,00,000; Office and Selling Expenses ₹50,000. Calculate Operating Ratio.
Exercise | Q 114 | Page 105
From the following information, calculate Operating Ratio:
| Cost of Revenue | Revenue from Operation: | |||
| from Operations (Cost of Goods Sold) | ₹52,000 | Gross Sales | ₹ 88,000 | |
| Operating Expenses | ₹18,000 | Sales Return | ₹ 8,000 |
Exercise | Q 115 | Page 106
Calculate Cost of Revenue from Operations from the following information:
Revenue from Operations ₹ 12,00,000; Operating Ratio 75%; Operating Expenses ₹ 1,00,000.
Exercise | Q 116 | Page 106
Calculate Operating Ratio from the following information:
Operating Cost ₹ 6,80,000; Gross Profit 25%; Operating Expenses ₹ 80,000.
Exercise | Q 117 | Page 106
Calculate Operating Profit Ratio from the following information:
| Opening Inventory | ₹1,00,000 | Closing Inventory | ₹1,50,000 | |
| Purchases | ₹ 10,00,000 | Loss by fire | ₹ 20,000 | |
| Revenue from Operations, i.e., Net Sales | ₹ 14,70,000 | Dividend Received | ₹ 30,000 | |
| Administrative and Selling Expenses | ₹ 1,70,000 |
Exercise | Q 118 | Page 106
Calculate Operating Profit Ratio from the Following:
| ₹ | |
| Revenue from Operations (Net Sales) | 5,00,000 |
| Cost of Revenue from Operations (Cost of Goods Sold) | 2,00,000 |
| Wages | 1,00,000 |
| Office and Administrative Expenses | 50,000 |
| Interest on Borrowings | 5,000 |
Exercise | Q 119 | Page 106
What will be the Operating Profit Ratio, if Operating Ratio is 82.59%?
Exercise | Q 120 | Page 106
Calculate Operating Profit Ratio,in each of the following alternative cases:
Case 1: Revenue from Operations (Net Sales) ₹ 10,00,000; Operating Profit ₹ 1,50,000.
Case 2: Revenue from Operations (Net Sales) ₹ 6,00,000; Operating Cost ₹ 5,10,000.
Case 3: Revenue from Operations (Net Sales) ₹ 3,60,000; Gross Profit 20% on Sales; Operating Expenses ₹ 18,000
Case 4: Revenue from Operations (Net Sales) ₹ 4,50,000; Cost of Revenue from Operations ₹ 3,60,000; Operating Expenses ₹ 22,500.
Case 5: Cost of Goods Sold, i.e., Cost of Revenue from Operations ₹ 8,00,000; Gross Profit 20% on Sales; Operating Expenses ₹ 50,000.
Exercise | Q 121 | Page 106
Revenue from Operations ₹ 9,00,000; Gross Profit 25% on Cost; Operating Expenses ₹ 45,000. Calculate Operating Profit Ratio.
Exercise | Q 122 | Page 106
Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. Calculate Operating Profit Ratio.
Exercise | Q 123 | Page 106
Cash Sales ₹ 2,20,000; Credit Sales ₹ 3,00,000; Sales Return ₹ 20,000; Gross Profit ₹ 1,00,000; Operating Expenses ₹ 25,000; Non-operating incomes ₹ 30,000; Non-operating Expenses ₹ 5,000. Calculate Net Profit Ratio.
Exercise | Q 124 | Page 106
Revenue from Operations, i.e., Net Sales ₹ 6,00,000. Calculate Net Profit Ratio.
Exercise | Q 125 | Page 106
Revenue from Operations, i.e., Net Sales ₹ 8,20,000; Return ₹ 10,000; Cost of Revenue from Operations (Cost of Goods Sold) ₹ 5,20,000; Operating Expenses ₹ 2,09,000; Interest on Debentures ₹ 40,500; Gain (Profit) on Sale of a Fixed Asset ₹ 81,000. Calculate Net Profit Ratio.
Exercise | Q 126 | Page 107
Revenue from Operations ₹ 4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses ₹ 2,000; Non-operating Income ₹22,000. Calculate Net Profit Ratio.
Exercise | Q 127 | Page 107
Calculate Return on Investment (ROI) from the following details: Net Profit after Tax ₹ 6,50,000; Rate of Income Tax 50%; 10% Debentures of ₹ 100 each ₹ 10,00,000; Fixed Assets at cost ₹ 22,50,000; Accumulated Depreciation on Fixed Assets up to date ₹ 2,50,000; Current Assets ₹ 12,00,000; Current Liabilities ₹ 4,00,000.
Exercise | Q 128 | Page 107
Net Profit before Interest and Tax ₹2,50,000; Capital Employed ₹10,00,000. Calculate Return on Investment.
Exercise | Q 129 | Page 107
Net Profit before Interest and Tax ₹6,00,000; Net Fixed Assets ₹20,00,000; Net Working Capital ₹10,00,000; Current Assets ₹11,00,000. Calculate Return on Investment.
Exercise | Q 130 | Page 107
Net Profit before Interest and Tax ₹4,00,000; 15% Long-term Debt ₹8,00,000; Shareholders' Funds ₹4,00,000. Calculate Return on Investment.
Exercise | Q 131 | Page 107
y Ltd.'s profit after interest and tax was ₹ 1,00,000. Its Current Assets were ₹ 4,00,000; Current Liabilities ₹ 2,00,000 ; Fixed Assets ₹ 6,00,000 and 10% Long-term Debt ₹ 4,00,000. The rate of tax was 20%. Calculate 'Return on Investment' of Y Ltd.
Exercise | Q 132 | Page 107
From the following Balance Sheet of Global Ltd., you are required to calculate Return on Investment for the year 2018-19:
BALANCE SHEET OF GLOBAL LTD.
as at 31st March, 2019
| Particulars | Note No. | Amount ₹ |
| I. EQUITY AND LIABILITIES 1.Shareholder's Funds | ||
| (a) Share Capital–Equity Shares of ₹ 10 each Fully paid | 5,00,000 | |
| (b) Reserves and Surplus | 4,20,000 | |
| 2. Non-Current Liabilities | ||
| 15% Long-term Borrowings | 16,00,000 | |
| 3. Current Liabilities | 8,00,000 | |
| Total | 33,20,000 | |
| II. ASSETS | ||
| 1. Non-Current Assets | ||
| (a) Fixed Assets | 16,00,000 | |
| (b) Non-Current Investments: | ||
| (i) 10% Investments | 2,00,000 | |
| (ii) 10% Non-trade Investments | 1,20,000 | |
| 2. Current Assets | 14,00,000 | |
| Total | 33,20,000 |
Additional Information: Net Profit before Tax for the year 2018-19 is rs 9,72,000.
Exercise | Q 133 | Page 108
Following is the Balance Sheet of the Bharati Ltd. as at 31st March, 2019:
| Particulars | Note No. | Amount (₹) | |
| I. EQUITY AND LIABILITIES 1.Shareholder's Funds | |||
| (a) Share Capital | 7,50,000 | ||
| (b) Reserves and Surplus: | |||
| Surplus, i.e., Balance in Statement of Profit and Loss: | |||
| Opening Balance | 6,30,000 | 20,88,000 | |
| Add: Transfer from Statement of Profit and Loss | 14,58,000 | ||
| 2. Non-Current Liabilities | |||
| 15% Long-term Borrowings | 24,00,000 | ||
| 3. Current Liabilities | 12,00,000 | ||
| Total | 64,38,000 | ||
| II. ASSETS | |||
| 1. Non-Current Assets | |||
| (a) Fixed Assets | 27,00,000 | ||
| (b) Non-Current Investments: | |||
| (i) 10% Investments | 3,00,000 | ||
| (ii) 10% Non-trade Investments | 1,80,000 | ||
| 2. Current Assets | 32,58,000 | ||
| Total | 64,38,000 | ||
You are required to calculate Return on Investment for the year 2018-19 with reference to Opening Capital Employed.
Exercise | Q 134 | Page 108
State with reason whether the following transactions will increase, decrease or not change the 'Return on Investment' Ratio:
(i) Purchase of machinery worth ₹10,00,000 by issue of equity shares.
(ii) Charging depreciation of ₹25,000 on machinery.
(iii) Redemption of debentures by cheque ₹2,00,000.
(iv) Conversion of 9% Debentures of ₹1,00,000 into equity shares.
Exercise | Q 135 | Page 108
Opening Inventory ₹80,000; Purchases ₹4,30,900; Direct Expenses ₹4,000; Closing Inventory ₹1,60,000; Administrative Expenses ₹21,100; Selling and Distribution Expenses ₹40,000; Revenue from Operations, i.e., Net Sales ₹10,00,000. Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio.
Exercise | Q 136 | Page 108
Following information is given about a company:
| ₹ | ₹ | |||
| Revenue From Operations, i.e., Net Sales Gross Profit | 1,50,000 | Opening Inventory | 29,000 | |
| Cost of Revenue From Operations | 30,000 | Closing Inventory | 31,000 | |
| (Cost of Goods Sold) | 1,20,000 | Debtors | 16,000 |
From the above information, calculate following ratios:
(i) Gross Profit Ratio,
(ii) Inventory Turnover Ratio, and
(iii) Trade Receivables Turnover Ratio.
Exercise | Q 137 | Page 109
From the following information, calculateany two of the following ratios:
(i) Current Ratio;
(ii) Debt to Equity Ratio; and
(iii) Operating Ratio.
Revenue from Operations (Net Sales) ₹ 1,00,000; cost of Revenue from Operations (Cost of Goods Sold) was 80% of sales; Equity Share Capital ₹ 7,00,000; General Reserve ₹ 3,00,000; Operating Expenses ₹ 10,000; Quick Assets ₹ 6,00,000; 9% Debentures ₹ 5,00,000; Closing Inventory ₹ 50,000; Prepaid Expenses ₹ 10,000 and Current Liabilities ₹ 4,00,000.
Exercise | Q 138 | Page 109
From the following information, calculate Inventory Turnover Ratio; Operating Ratio and Working Capital Turnover Ratio:
Opening Inventory ₹ 28,000; Closing Inventory ₹ 22,000; Purchases ₹ 46,000; Revenue from Operations, i.e., Net Sales ₹ 80,000; Return ₹10,000; Carriage Inwards ₹ 4,000; Office Expenses ₹ 4,000; Selling and Distribution Expenses ₹ 2,000; Working Capital ₹ 40,000.
Exercise | Q 139 | Page 109
From the following calculate:
(a) Current Ratio; and
(b) Working Capital Turnover Ratio.
| ₹ | ||
| (i) | Revenue from Operations | 1,50,000 |
| (ii) | Total Assets | 1,00,000 |
| (iii) | Shareholders' Funds | 60,000 |
| (iv) | Non-current Liabilities | 20,000 |
| (v) | Non-current Assets | 50,000 |
Exercise | Q 140 | Page 109
Calculate following ratios on the basis of the following information:
(i) Gross Profit Ratio;
(ii) Current Ratio;
(iii) Acid Test Ratio; and
(iv) Inventory Turnover Ratio.
| ₹ | ₹ | |||
| Gross Profit | 50,000 | Revenue from Operations | 1,00,000 | |
| Inventory | 15,000 | Trade Receivables | 27,500 | |
| Cash and Cash Equivalents | 17,500 | Current Liabilities | 40,000 |
Exercise | Q 141 | Page 109
Calculate following ratios on the basis of the given information:
(i) Current Ratio;
(ii) Acid Test Ratio;
(iii) Operating Ratio; and
(iv) Gross Profit Ratio.
| ₹ | ₹ | |||
| Current Assets | 70,000 | Revenue from Operations (Sales) | 1,20,000 | |
| Current Liabilities | 35,000 | Operating Expenses | 40,000 | |
| Inventory | 30,000 | Cost of Goods Sold or Cost of Revenue from Operations | 60,000 |
Exercise | Q 142 | Page 110
From the information given below, calculateany threeof the following ratio:
(i) Gross Profit Ratio;
(ii) Working Capital Turnover Ratio:
(iii) Debt to Equity Ratio; and
(iv) Proprietary Ratio.
| ₹ | ₹ | |||
| Revenue from Operations (Net Sales) | 5,00,000 | Current Liabilities | 1,40,000 | |
| Cost of Revenue from Operations (Cost of Goods Sold) | 3,00,000 | Paid-up Share Capital | 2,50,000 | |
| Current Assets | 2,00,000 | 13% Debentures | 1,00,000 |
Exercise | Q 143 | Page 110
On the basis of the following information calculate:
(i) Debt to Equity Ratio; and
(ii) Working Capital Turnover Ratio.
| Information: | ₹ | ₹ | |||
| Revenue from Operations: | (a) Cash Sales | 40,00,000 | Paid-up Share Capital | 17,00,000 | |
| (b) Credit Sales | 20,00,000 | 6% Debentures | 3,00,000 | ||
| Cost of Goods Sold | 35,00,000 | 9% Loan from Bank | 7,00,000 | ||
| Other Current Assets | 8,00,000 | Debentures Redemption Reserve | 3,00,000 | ||
| Current Liabilities | 4,00,000 | Closing Inventory | 1,00,000 |
Exercise | Q 144 | Page 110
From the following, calculate (a) Debt to Equity Ratio; (b) Total Assets to Debt Ratio; and (c) Proprietary Ratio:
| Equity Share Capital | ₹ 75,000 | Debentures | ₹ 75,000 | |
| Preference Share Capital | ₹ 25,000 | Trade Payable | ₹ 40,000 | |
| General Reserve | ₹ 45,000 | Outstanding Expenses | ₹ 10,000 | |
| Balance in Statement of Profit and Loss | ₹ 30,000 |
Exercise | Q 145 | Page 110
From the following information related to Naveen Ltd., calculate (a) Return on Investment and (b) Total Assets to Debt Ratio:
Information: Fixed Assets ₹ 75,00,000; Current Assets ₹ 40,00,000; Current Liabilities ₹ 27,00,000; 12% Debentures ₹ 80,00,000 and Net Profit before Interest, Tax and Dividend ₹ 14,50,000.
Exercise | Q 146 | Page 110
Calculate Current Ratio, Quick Ratio and Debt to Equity Ratio from the figures given below:
| Particulars | ₹ | ||
| Inventory | 30,000 | ||
| Prepaid Expenses | 2,000 | ||
| Other Current Assets | 50,000 | ||
| Current Liabilities | 40,000 | ||
| 12% Debentures | 30,000 | ||
| Accumulated Profits | 10,000 | ||
| Equity Share Capital | 1,00,000 | ||
| Non-current Investments | 15,000 |
Exercise | Q 147 | Page 110
From the following informations, calculate Return on Investment (or Return on Capital Employed):
| Particulars | ₹ | ||
| Share Capital | 5,00,000 | ||
| Reserves and Surplus | 2,50,000 | ||
| Net Fixed Assets | 22,50,000 | ||
| Non-current Trade Investments | 2,50,000 | ||
| Current Assets | 11,00,000 | ||
| 10% Long-term Borrowings | 20,00,000 | ||
| Current Liabilities | 8,50,000 | ||
| Long-term Provision | NIL |
Problem 3-14 Comprehensive Ratio Analysis Solution
Source: https://www.shaalaa.com/textbook-solutions/c/ts-grewal-solutions-class-12-accountancy-analysis-of-financial-statements-chapter-3-accounting-ratios_1669
0 Response to "Problem 3-14 Comprehensive Ratio Analysis Solution"
Post a Comment