## Accounting Ratios

2. A company had Current Assets Rs.  3,00,000 and Current Liabilities Rs.  1,40,000. Afterwards, it purchased goods worth Rs.  20,000 on credit. Calculate the Current Ratio after the purchase of goods. Marks-2/4, CBSE:2018-19/Main/02/Q-21* Answer Next Back

5. X Ltd. has a current ratio 3.5:1 and quick ratio of 2:1. If excess of current assets over quick assets represented by Inventory is 24,000, calculate current assets and current liabilities. Marks-2/4, CBSE:2016-17/Sample/Q-21 Answer Next Back

6. Current Liabilities Rs. 1,50,000, Current Assets Rs. 2,80,000, Inventories Rs. 40,000, Advance Tax Rs. 30,000, and Prepaid Rent Rs. 10,000. Calculate Quick Ratio. Marks-3, CBSE:2019-20/Main/02/Q-30(i)* Answer Next Back

7. From the following data, calculate Current ratio and Liquid Ratio Liquid Assets â‚¹ 75,000 Inventories (Includes Loose Tools of â‚¹20,000) â‚¹ 35,000 Prepaid expenses â‚¹10,000 Working Capital â‚¹ 60,000 Marks-4, CBSE:2018-19/Sample/Q-21* Answer Next Back

8. Quick ratio of a company is 1 : 1. State, with reason, whether the following transactions will increase, decrease or not change the ratio: (i) Paid insurance premium in advance Rs.  10,000. (ii) Purchased goods on credit Rs.  8,000. (iii) Issued fully paid equity shares of Rs.  1,00,000. (iv)...

9. The Quick Ratio of a company is 1.5 : 1. State, giving reasons, which of the following transactions will improve, reduce or not change the quick ratio: (i) Purchase of goods for cash (ii) Bills payable paid at maturity (iii) Sale of goods costing Rs.  18,000 for Rs.  16,000...

10. 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: (1) Purchase of loose tools Rs.  2,000. (2) Insurance premium paid in advance Rs.  500. (3) Sale of goods on credit Rs.  3,000....

12. The Debt Equity ratio of a company is 1 : 2. State whether â€˜Issue of bonus sharesâ€™ will increase, decrease or not change the Debt Equity Ratio. Marks-2/4, CBSE:2018-19/Main/01/Q-21* Answer Next Back

13. Calculate the Current Ratio and Debt-Equity Ratio from the following information: Rs. Non-Current Assets 16,00,000 Current Assets 4,00,000 Working Capital 2,00,000 Non-Current Liabilities 12,00,000 Marks-3, CBSE:2019-20/Main/03/Q-30* Answer Next Back

14. Assuming that the Debt to Equity ratio of a company is 0Â·50, state whether this ratio would increase, decrease or remain unchanged in the following cases: (i) Purchase of fixed assets on a credit of 3 months (ii) Issue of new shares for cash (iii) Purchased machinery and paid...

15. Calculate â€˜Total Assets to Debt ratioâ€™ from the following information: Rs. Equity Share Capital 4,00,000 Long Term Borrowings 1,80,000 Surplus i.e. Balance in statement of Profit and Loss 1,00,000 General Reserve 70,000 Current Liabilities 30,000 Long Term Provisions 1,20,000 Marks-2/4, CBSE:2018-19/Main/01/Q-21* Answer Next Back

16. Calculate the â€˜Total Assets to Debt Ratioâ€™ from the following information: Rs. Current Assets 11,00,000 Working Capital 6,50,000 Shareholderâ€™s Fund 7,50,000 Total Debt 19,50,000 Reserves and Surplus 2,50,000 Marks-3, CBSE:2019-20/Main/01/Q-30* Answer Next Back

17. From the following information of Shiva Ltd., calculate total assets to debt ratio: Equity Share Capital Rs. 5,00,000 9% Preference Share Capital Rs. 4,00,000 Fixed Assets Rs. 12,00,000 Non-Current Investments Rs. 1,50,000 Reserves and Surplus Rs. 2,40,000 Current Assets Rs. 1,90,000 Current Liabilities Rs. 1,00,000 Marks-4, CBSE:2018-19/Main/04/Q-22* Answer Next...

18. From the following balances obtained from the books of Heera Ltd. calculate proprietary ratio: Rs. Plant and Machinery 10,00,000 Land and Building 6,00,000 Motor Car 8,00,000 Furniture 1,50,000 Stock 4,50,000 Debtors 90,000 Cash at Bank 3,40,000 Non-Current Liabilities 10,00,000 Current Liabilities 6,20,000 Marks-4, CBSE:2018-19/Main/05/Q-22* Answer Next Back

19. The net profit after interest and tax of a company was Rs.  1,20,000; Rate of income tax is 40%. The company has 10% debentures of Rs.  1,00,000. Calculate interest coverage ratio. Marks-2/4, CBSE:2016-17/Comp-AI/Q-21 Answer Next Back

20. From the following information calculate Interest Coverage Ratio : Net profit after interest and tax Rs.  1,20,000; Rate of income tax 40%; 15% debentures Rs.  1,00,000; 12% Mortgage loan Rs.  1,00,000. Marks-2/4, CBSE:2018-19/Main/02/Q-21* Answer Next Back

21. From the following information, calculate â€˜Interest coverage Ratioâ€™: Profit after interest and tax Rs. 6,00,000 10% Debentures Rs. 8,00,000 Rate of Income Tax 40%  Marks-3, CBSE:2019-20/Main/04/Q-30* Answer Next Back

22. From the following details calculate Interest Coverage Ratio: Net profit after tax – â‚¹ 7,00,000 6% debentures of â‚¹ 20,00,000 Tax Rate 30% Marks 3, CBSE:2019-20/Sample/Q-30* Answer Next Back

23. For the year ended March 31, 2017, Net Profit after tax of K X Limited was Rs. 6,00,000. The company has Rs. 40,00,000 12% Debentures of Rs. 100 each. Calculate Interest Coverage Ratio assuming 40% tax rate. State its significance also. Will the Interest Coverage Ratio change if during...

25. From the following information related to a company calculate inventory turnover ratio: Opening inventory Rs.  20,000; Closing inventory Rs.  22,000; Purchases Rs.  80,000; Wages Rs.  9,000; Carriage outwards Rs.  2,000; Returns outwards Rs.  1,000; Revenue from operations Rs.  80,000; Carriage inwards Rs.  4,000; Rent Rs.  5,000. Marks-2/4, CBSE:2016-17/Comp-AI/Q-21 Answer...

26. From the following information, calculate Inventory Turnover Ratio. Revenue from Operations: 4,00,000, Average Inventory: 55,000, The rate of Gross Loss on Revenue from Operations was 10%. Marks-2/4, CBSE:2016-17/Sample/Q-21 Answer Next Back

27. Calculate Revenue from operations of BN Ltd. From the following information: Current assets Rs. 8,00,000 Quick ratio is 1.5 : 1 Current ratio is 2 : 1 Inventory turnover ratio is 6 times. Goods were sold at a profit of 25% on cost. Marks-2/4, CBSE:2018-19/Main/01/Q-21* Answer Next Back

28. Average Inventory Rs. 60,000, Revenue from Operations Rs. 6,00,000, the rate of Gross Loss on Sales is 10%. Calculate the Inventory Turnover Ratio. Marks-3, CBSE:2019-20/Main/02/Q-30(i)* Answer Next Back

29. A company had a liquid ratio of 1.5:1 and a current ratio of 2:1. Its inventory turnover ratio was 6 times. It had total current assets of Rs. 2,00,000. Find out revenue from operations if the goods are sold at 25% profit on cost.  Marks-3, CBSE:2019-20/Main/05/Q-30* Answer Next Back

30. From the following information obtained from the books of Kundan Ltd., calculate the inventory turnover ratio for the years 2015 âˆ’ 16 and 2016 â€“ 17: 2015 â€“ 16 Rs. 2016 â€“ 17 Rs. Inventory on 31st March 7,00,000 17,00,000 Revenue from operations 50,00,000 75,00,000 (Gross profit is 25%...

32. Rate of Gross profit on Revenue from operations of a company is 25%. Its Gross profit is Rs.  5,00,000. Its Shareholdersâ€™ Funds are Rs.  25,00,000; Non-current Liabilities are Rs.  8,00,000 and Non-current Assets are Rs.  23,00,000. Calculate its Working Capital Turnover Ratio. Marks-2/4, CBSE:2018-19/Comp/Q-20* Answer Next Back

33. A company earns Gross profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was Rs.  5,00,000; Equity Share Capital of the company was Rs.   10,00,000; Reserves and Surplus Rs.   2,00,000; Long Term Loan Rs.   3,00,000 and Non Current Assets were...

34. Rate of Gross profit on cost of a company is 25%. Its Gross profit is Rs.  5,00,000. Its shareholdersâ€™ Funds are Rs.  12,00,000; Current liabilities are Rs.  3,00,000 and Current Assets are Rs.  10,00,000. Calculate its Working Capital Turnover ratio. Marks-2/4, CBSE:2016-17/Comp-DL/-21 Answer Next Back

37. From the following information, determine the opening inventory and the closing inventory: Inventory Turnover Ratio = 5 times Revenue from Operations = Rs. 8,00,000 Gross Profit Ratio = 25% Closing inventory was Rs. 20,000 more than the opening inventory.  Marks-3, CBSE:2019-20/Main/03/Q-30* Answer Next Back

38. The Revenue from operations of a firm is Rs. 6,00,000. Its inventory turnover ratio is 3 times. If gross profit ratio is 25%, calculate its opening inventory and closing inventory. The opening inventory is 25% of closing inventory.  Marks-3, CBSE:2019-20/Main/04/Q-30* Answer Next Back

39. Calculate the amount of opening trade receivables and closing trade receivables from the following information: Trade receivables turnover ratio 8 times Cost of revenue from operations Rs. 4,80,000 The amount of credit revenue from operations is Rs. 2,00,000 more than cash revenue from operations. Gross profit ratio is 20%....

40. Calculate opening and closing trade receivables from the following information: Trade Receivable turnover ratio 4 times; Cost of Revenue from Operations Rs.  3,20,000; Gross profit ratio 20%; Closing trade receivables were Rs.  15,000 more than opening trade receivables; cash revenue from operations being 33â…“ % of credit revenue from...

41. Calculate amount of Opening Trade Receivables and Closing Trade Receivables from the following figures: Trade Receivable Turnover ratio 5 times Cost of Revenue from Operations â‚¹ 8,00,000 Gross Profit ratio 20% Closing Trade Receivables were â‚¹ 40,000 more than in the beginning Cash sales being Â¼ times of Credit...

43. The Operating ratio of a company is 60%. State whether â€˜Purchase of goods costing Rs.  20,000â€™ will increase, decrease or not change the operating ratio. Marks-2/4, CBSE:2018-19/Main/01/Q-21* Answer Next Back

44. From the given information, calculate the following ratios: (i) Operating Ratio (ii) Inventory Turnover Ratio Information: Cash Revenue from Operations Rs. 10,00,000 Credit Revenue from Operations 120% of Cash Revenue from Operations Operating Expenses 10% of Total Revenue from Operations Rate of Gross Profit 40% Opening Inventory Rs. 1,50,000...

45. The operating ratio of a company is 80%. State whether the following transactions will increase, decrease or not change the ratio: (i) Purchased goods on credit Rs.  20,000 (ii) Paid wages Rs.  5,000 (iii) Redeemed Rs.  8,000, 9% debentures (iv) Sold goods Rs.  50,000 for cash Marks-4, CBSE:2018-19/Main/04/Q-22* Answer...

46. Net profit after interest and tax of M Ltd. was Rs. 1,00,000. Its Current Assets were Rs. 4,00,000 and Current Liabilities were Rs. 2,00,000. Tax rate was 50%. Its Total Assets were Rs. 10,00,000 and 10% Long term debt was Rs. 4,00,000. Calculate Return on Investment. Marks-2/4, CBSE:2018-19/Comp/Q-20* Answer...

47. Y Ltdâ€™s profits after interest and tax was Rs.   1,00,000. Its Current Assets were Rs.   4,00,000; Current Liabilities Rs.   2,00,000; Fixed Assets Rs.   6,00,000 and 10% Long term debt Rs.   4,00,000. The rate of tax was 20%. Calculate â€˜Return on Investmentâ€™ of Y Ltd....

48. Net profit after interest and tax Rs.  1,00,000; Current assets Rs.  4,00,000; Current liabilities Rs.  2,00,000; Tax rate 20%; Fixed assets Rs.  6,00,000; 10% Long term debt Rs.  4,00,000. Calculate Return on Investment. Marks-2/4, CBSE:2016-17/Comp-DL/-21 Answer Next Back

49. From the following information obtained from the books of P. Ltd., calculate, (i) Return on Investment, and (ii) Debt-Equity Ratio: Information: Net Profit after interest and tax Rs. 6,00,000; 6% Debentures Rs. 10,00,000; Capital employed Rs. 20,00,000, and Tax rate 40%.  Marks-3, CBSE:2019-20/Main/02/Q-30* Answer Next Back

(i) X Ltd. has a current ratio of 3 : 1 and quick ratio of 2 : 1. The excess of current assets over quick assets are â‚¹24,000. Calculate current assets and current liabilities. (ii) From the following information, compute â€˜Total Assets to Debt Ratioâ€™: Marks-3, CBSE:2019-20/Compartment/Q-30* Answer : Next...

Calculate proprietary ratio, if Total assets to Debt ratio is 2:1. Debt is â‚¹5,00,000. Equity shares capital is 0.5 times of debt. Preference Shares capital is 25% of equity share capital. Net profit before tax is â‚¹10,00,000 and rate of tax is 40%. Marks-3, CBSE:2020-21/Sample/Q-30* Answer : Next Back

From the following information, calculate â€˜Interest Coverage Ratio. Profit after interest and taxÂ  Â  Â â‚¹7,50,000 Rate of income taxÂ  Â  Â  25% 9 % DebenturesÂ  Â  Â â‚¹8,00,000 Marks-3, CBSE:2020-21/Sample/Q-30* Answer : Next Back

(i) Calculate Revenue from operations of BN Ltd.’ from the following information: Current AssetsÂ  Â  Â â‚¹8,00,000 Quick ratioÂ  Â  Â 1.5 : 1 Current ratioÂ  Â  Â 2 : 1 Inventory turnover ratioÂ  Â  6 times Goods were sold at a profit of 25% on cost. (ii) The operating ratio of a...

The debt equity ratio of M Ltd. is 2:1. State with reasons whether the following transactions will increase, decrease or not change the debt equity ratio: (i) Obtained a loan from 1CICI Bank â‚¹1,00,000 payable after 5 yrs. (ii) Purchased machinery for cash â‚¹1,50,000. (ii) Redeemed 9% debentures â‚¹1,00,000, (iv)...

Calculate Gross Profit Ratio from the following information: Average Inventory â‚¹1,60,000; Inventory Turnover Ratio 8 times, Average Trade Receivables â‚¹2,00,000; Trade Receivables Turnover Ratio 6 times and Cash Sales 25% of Total Sales. Marks-4, CBSE:2022-23/Zone-3/Set-1/Q-33* Answer : Next Back

From the following information, calculate Working Capital Turnover Ratio: Capital EmployedÂ  Â  â‚¹1,00,000 Non-Current AssetsÂ  Â  â‚¹80,000 Cost of Revenue from OperationsÂ  Â  â‚¹3,20,000 Gross Profit RatioÂ  Â 20% Marks-4, CBSE:2022-23/Zone-3/Set-1/Q-33* Answer : Next Back

(a) Y Ltd. has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. If excess of current assets over quick assets represented by inventory is â‚¹48,000, calculate current assets and current liabilities. (b) Calculate Debt to Equity Ratio: Shareholder FundsÂ  Â  Â  Â â‚¹2,00,000 Reserves and...

The Current Ratio of a company is 2 : 1. State giving reasons which of the following transactions would improve, reduce or not change the ratio: (a) Purchase of goods for cash â‚¹60,000 (b) Purchase of fixed assets for cash â‚¹2,00,000 (c) Sale of goods costing â‚¹20,000 for â‚¹23,000 on...

From the following information, calculate the value of opening and closing inventory: Inventory Turnover Ratio = 4 times Gross Profit = 20% on Revenue from operations Revenue from operations = â‚¹10,00,000 Opening inventory is 25% of the inventory at the end. Marks-4, CBSE:2022-23/Zone-5/Set-1/Q-33* Answer : Next Back

Debt-Equity Ratio of Z Ltd. is 2: 1. State with reason whether the following transactions will improve, decline or will not change the debt-equity ratio: (i) Conversion of 3,00,000, 9% debentures into equity shares. (ii) Cash received from debtors â‚¹1,00,000 (iii) Redemption of 10,00,000, 11% debentures. (iv) Purchase of goods...

These ratios are calculated to determine the ability of the business to service its debt in the long run. Identify and state the significance of three such ratios. Marks-3, CBSE:2022-23/Compartment/Q-32 Answer : Next Back

(i)From the following information, calculate Operating Ratio: Revenue from Operations : â‚¹10,00,000 Cost of Revenue from Operations : â‚¹4,00,000 Selling expenses : â‚¹80,000 Administrative expenses : â‚¹1,20,000 (ii)From the following details, calculate Interest Coverage Ratio: Net Profit before Tax : â‚¹2,00,000 10% Long term debt : â‚¹5,00,000 Tax rate 40%...

The Current Ratio of Zenith Ltd. is 2 : 1. State giving reasons, which of the following transactions will improve, reduce or not change the current ratio: Payment to creditors â‚¹20,000 Purchased goods on credit â‚¹80,000 Cash received from debtors â‚¹15,000 Issue of Equity Shares â‚¹5,00,000 Marks-4, CBSE:2022-23/Compartment/Q-33* Answer :...

a) A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It had total current assets of â‚¹8,00,000. Find out annual sales if goods are sold at 25% profit on cost. b) Calculate debt to capital employed ratio from the following...

Calculate Gross Profit Ratio from the following information: Inventory Turnover Ratio: Â Â Â Â Â Â Â Â Â Â Â Â Â Â  6 times Average Inventory: Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â  Â Â Â Â Â Â Â Â  â‚¹4,00,000 Goods are sold at a profit of 25% on cost Marks-4, CBSE:2022-23/Zone-1/Set-1/Q-33* Answer : Next Back

The Current Ratio of a company is 2 : 1. State giving reasons, which of the following transactions would improve, reduce or not change the ratio: (a) Purchased goods on credit â‚¹40,000 (b) Sale of furniture of â‚¹8,000 at a loss of â‚¹2,000 (c) Cash received from trade receivables â‚¹15,000...

Determine Return on Investment and Net Assets Turnover ratio from the following information: – Profits after Tax were â‚¹6,00,000; Tax rate was 40%; 15% Debentures were of â‚¹20,00,000; 10% Bank Loan was â‚¹20,00,000; 12% Preference Share Capital â‚¹30,00,000; Equity Share Capital â‚¹40,00,000; Reserves and Surplus were â‚¹10,00,000; Sales â‚¹3,75,00,000 and...

Debt to Capital Employed ratio is 0.3:1. State whether the following transactions, will improve, decline or will have no change on the Debt to Capital Employed Ratio. Also give reasons for the same. Sale of Equipments costing â‚¹10,00,000 for â‚¹9,00,000. Purchased Goods on Credit for â‚¹1,00,000 for a credit of...