Advertisement Remove all ads

From the Following Information Calculate: (I) Gross Profit Ratio (Ii) Inventory Turnover Ratio (Iii) - Accountancy

Numerical

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:

 

 

Rs

Revenue from Operations

25,20,000

Net Profit

3,60,000

Cast of Revenue from Operations

19,20,000

Long-term Debts

9,00,000

Trade Payables

2,00,000

Average Inventory

8,00,000

Current Assets

7,60,000

Fixed Assets

14,40,000

Current Liabilities

6,00,000

Net Profit before Interest and Tax

8,00,000

 

Advertisement Remove all ads

Solution

(i) `"Gross Profit Ratio" = "Gross profit"/"Net Revenue from Operations"xx" 100`

`"Gross Profit " = "Net Revenue From Operations" - "Cost of revenue From Operatons"`

                        = `25,20,000 - 19,20,000`

                        = `6,00,000`

`"Gross Profit Ratio" = "6,00,000"/"25,20,000"xx" = 23.81`

(ii) `"Inventory Turnover Ratio" = "Cost of Revenue from Opearions"/"Average Inventory"`

                                                    =`"19,20,000"/"8,00,000"`

                                                    = `2.4 "times"`

(iii) `"Current Ratio " = "Current Assets"/"Current Liablities"`

`"Current Assets" = "Liquid assets" + "Inventory"`

                            = `7,60,000 + 8,00,000`

                             = `15,60,000`

`"Current Ratio" = "15,60,000"/"6,00,000" = 2.6/1 = 2.6 ; 1`

(iv)  `"Liquid Ratio" = "Liquid Assets"/" Current Liablities"`

                                = `"7,60,000"/"6,00,000"`

                                = `1.27/1`

                                 = `1.27 : 1`

(v) `"Net Profit Ratio" = "Net Profit"/"Net Revenue From operations"xx" 100`

                                    = `"3,60,000"/"25,20,000"xx" 100`

                                     = `14.28%`

(vi) `"Working capital ratio" = "Revenue from operations"/"working capital"`

`"working capital" = "current assets" - "current liablities"`

                             = `15,60,000 - 6,00,000`

                             = `9,60,000`

`"Working capital ratio" = "25,20,000"/"9,60,000"`

                                      = `2.625"times"`

Note: There is a misprint in the question given in the textbook. The figure of Rs '760,000' represents the value of 'Liquid Assets' and not 'Current Assets'. The above solution has been worked out accordingly and the answer given as per the textbook is same as per the above solution.

  Is there an error in this question or solution?
Advertisement Remove all ads

APPEARS IN

NCERT Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
Chapter 5 Accounting Ratios
Numerical Questions | Q 11 | Page 230
Advertisement Remove all ads
Advertisement Remove all ads
Share
Notifications

View all notifications


      Forgot password?
View in app×