Chapter 5 Accounting Ratios Solutions
Question - 11 : - Current Ratio is 3.5:1. Working Capital is ₹ 90,000. Calculate the amount of Current Assets and Current Liabilities.
Answer - 11 : -
or, Current Assets = 3.5 Current Liabilities (1)
Working Capital = Current Assets − Current Liabilities
Working Capital = 90,000
or, Current Assets − Current Liabilities = 90,000
or, 3.5 Current Liabilities − Current Liabilities = 90,000 (from 1)
or, 2.5 Current Liabilities = 90,000
Question - 12 : - Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the inventory is 36,000, calculate current liabilities and current assets.
Answer - 12 : -
or,
or, 4.5 Current Liabilities = Current Assets
or,
or, 3 Current Liabilities = Quick Assets
Quick Assets = Current Assets − Inventory = Current Assets − 36,000Quick Assets = Current Assets – Inventory = Current Assets – 36,000
Current Assets − Quick Assets = 36,000
or, 4.5 Current Liabilities − 3 Current Liabilities = 36,000
or, 1.5 Current Liabilities = 36,000
or, Current Liabilities = 24,000
Current Assets = 4.5 Current Liabilities
Question - 13 : - Current liabilities of a company are ₹ 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.
Answer - 13 : -
Or, 4 × 75,000 = Current Assets
Or, Current Assets = 3, 00,000
Or,
Liquid Assets = 75,000
Inventory = Current Assets − Liquid Assets
= 3, 00,000 − 75,000
= 2, 25,000
Question - 14 : - Handa Ltd. has inventory of ₹ 20,000. Total liquid assets are ₹ 1, 00,000 and quick ratio is 2:1. Calculate current ratio.
Answer - 14 : -
or,
Current Assets = Liquid Assets + Inventory
= 1, 00,000 + 20,000
= 1, 20,000
Question - 15 : - Calculatedebt equity ratio from the following information:
| | ₹ |
| Total Assets | 15,00,000 |
| Current Liabilities | 6,00,000 |
| Total Debts | 12,00,000 |
Answer - 15 : -
Long Term Debts = Total Debts − Current Liabilities
Or,
Question - 16 : - Calculate Current Ratio if:
Inventory is ₹ 6, 00,000; Liquid Assets ₹ 24, 00,000; Quick Ratio 2:1.
Answer - 16 : -
Or,
Current Assets = Liquid Assets + Inventory
Question - 17 : - ComputeStock Turnover Ratio from the following information:
| | ₹ |
| Net Revenue from Operations | 2,00,000 |
| Gross Profit | 50,000 |
| Inventory at the end | 60,000 |
| Excess of inventory at the end over inventory in the beginning | 20,000 |
Answer - 17 : -
Question - 18 : - Calculatefollowing ratios from the following information:
(i)Current ratio (ii) Acid test ratio (iii) Operating Ratio (iv) Gross ProfitRatio
| ₹ |
| 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 |
Answer - 18 : -
iv)
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:
| | ₹ |
| 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 |
Answer - 19 : - (i)
Question - 20 : - Compute Gross Profit Ratio, Working Capital Turnover Ratio, Debt Equity Ratio and Proprietary Ratio from the following information: | | ₹ |
| Paid-up Share Capital | 5,00,000 |
| Current Assets | 4,00,000 |
| Revenue from Operations | 10,00,000 |
| 13% Debentures | 2,00,000 |
| Current Liabilities | 2,80,000 |
| Cost of Revenue from Operations | 6,00,000 |
Answer - 20 : -