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# Calculate Following Ratios from the Following Information: (I) Current Ratio (Ii) Acid Test Ratio (Iii) Operating Ratio (Iv) Gross Profit Ratio - Accountancy

ConceptTypes of Ratios

#### Question

Calculate following ratios from the following information:

(i) Current ratio (ii) Acid test ratio (iii) Operating Ratio (iv) Gross Profit Ratio

 Rs Current Assets 35,000 Current Liabilities 17,500 Inventory 15,000 Operating Expenses 20,000 Revenue from Operations 60,000 Cost of Goods Sold 30,000

#### Solution

i) "Current Ratio" = "Current Assets"/"Current Liablities"

"Current Ratio" = "35,000"/"17,500" = 2 ; 1

ii) "Acid Test Ratio" = "Liquid Assets"/"Current Liablities"

"Liquid Assets" = "Current Assets" - "Inventory"

= "35,000 - 15,000"

= 20,000

"Acid test ratio" = "20,000"/"17,500" = "1.143/1 = 1.143 : 1

iii) "Operating Ratio" = ("Cost of goods sold" + "Operating Expenses")/"Net Revenue from Operations"xx" 100

=("30,000 + 20,000")/"60,000"xx" 100

="50,000"/"60,000"xx" 100 = 83.33%

iv) "Gross Profit Ratio" = "Gross Profit"/"Net Revenue from Operations"xx" 100

"Gross Profit " = "Net Revenue from Operations" - "Cost of goods Sold"

= 60,000 - 30,000

= 30,000

"Gross Profit Ratio" = "30,000"/"60,000"xx" 100 = 50%

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Solution Calculate Following Ratios from the Following Information: (I) Current Ratio (Ii) Acid Test Ratio (Iii) Operating Ratio (Iv) Gross Profit Ratio Concept: Types of Ratios.
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