# TS Grewal solutions for Class 12 Accountancy - Analysis of Financial Statements chapter 3 - Accounting Ratios [Latest edition]

## Chapter 3: Accounting Ratios

Exercise
Exercise [Pages 91 - 110]

### TS Grewal solutions for Class 12 Accountancy - Analysis of Financial Statements Chapter 3 Accounting Ratios Exercise [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;

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 NoteNo. ₹ 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:

(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

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

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 year is assumed to be 360 days, calculate:
(iii) 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.
(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
Exercise | Q 137 | Page 109

From the following information, calculate any 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, calculate any three of 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

Exercise

## TS Grewal solutions for Class 12 Accountancy - Analysis of Financial Statements chapter 3 - Accounting Ratios

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