Management Accounting Ts Grewal 2017 for Class 12 Commerce Accountancy Chapter 3 - Ratio Analysis

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$\begin{array}{l}\text{(i) Current Ratio}\\ \text{Current Assets}=\text{Total Assets}-\text{Fixed Assets}-\text{Non-Current Investment\hspace{0.17em}-\hspace{0.17em}Long term Loans and Advances}\\ =\text{8,00,000}-\text{3,00,000}-\text{50,000}-\text{50,000}=\text{Rs 4,00,000}\\ \text{Current Liabilities}=\text{Total Debt -\hspace{0.17em}Non}-\text{Current Liabilities}\\ =\text{6,00,000}-\text{2,00,000}-\text{2,00,000}=\text{Rs 2,00,000}\\ \mathrm{Current} \mathrm{}\mathrm{Ratio}=\frac{\mathrm{Current} \mathrm{}\mathrm{Assets}}{\mathrm{Current} \mathrm{}\mathrm{Liabilities}}\\ =\frac{\text{4,00,000}}{\text{2,00,000}}=2:1\\ \text{(ii) \hspace{0.17em}Quick\hspace{0.17em}Ratio }\\ \text{Quick Assets}=\text{Current Assets}-\text{Stock}-\text{Prepaid Expenses}\\ =\text{4,00,000}-\text{95},000-5,000=\text{Rs 3,00,000}\\ \mathrm{Quick} \mathrm{}\mathrm{Ratio}=\frac{\mathrm{Quick}\mathrm{} \mathrm{Assets}}{\mathrm{Current} \mathrm{}\mathrm{Liabilities}}\\ \text{ =}\frac{3,00,000}{2,00,000}=1.5:1\end{array}$

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$\mathrm{Debt} \mathrm{Equity} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Equity}}$
 

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$\mathrm{Debt} \mathrm{Equity} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Equity}}$
 

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Let’s take Debt = Rs. 50,000 and Equity = Rs. 1, 00,000

1. Issue of Shares say Rs 20,000, So

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$\begin{array}{l}\text{Debt}=\text{Long Term Borrowings}+\text{Long Term Provisions}\\ \text{ =\hspace{0.17em}4,20,000+1,40,000\hspace{0.17em}=\hspace{0.17em}Rs 5,60,000}\\ \text{Equity}=\text{Total Assets\hspace{0.17em}-\hspace{0.17em}Total Debts}\\ \text{ =\hspace{0.17em}(8,40,000\hspace{0.17em}-1,40,000+14,000+56,000+3,50,000)\hspace{0.17em}- (4,20,000 -1,40,000\hspace{0.17em}-2,80,000)= Rs 2,80,000}\\ \mathrm{Debt} \mathrm{}\mathrm{to}\mathrm{} \mathrm{Equity} \mathrm{}\mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Equity}}\\ \text{ =}\frac{5,60,000}{2,80,000}=2:1\end{array}$

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$\mathrm{Debt} \mathrm{Equity} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Equity}}$
 

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$\mathrm{Debt} \mathrm{Equity} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Equity}}$
 

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$\begin{array}{l}\text{Debt to Equity Ratio}=\frac{\text{Debt}}{\text{Equity}}\\ \text{ =}\frac{8,00,000}{4,00,000}=2:1\\ \text{Debt}=\text{Long Term Borrowings}+\text{Long Term Provision}\\ \text{ =5,00,000+3,00,000 = Rs 8,00,000}\end{array}$

$\begin{array}{l}\text{Proprietary Ratio}=\frac{\text{Shareholder's Funds}}{\text{Total Assets}}\times 100\\ \text{ =}\frac{4,00,000}{16,00,000}\times 100=25\%\\ \text{Shareholders' Funds/Equity}=\text{Non-Current Assets + Working Capital}-\text{Non-Current Liabilities}\\ \text{ = 8,00,000 + 4,00,000 }-\text{ 8,00,000 = Rs 4,00,000}\\ \text{Working Capital = 8,00,000 }-\text{ 4,00,000 = 4,00,000}\end{array}$

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$$\begin{gathered} \mathrm{Debt} \mathrm{to} \mathrm{Total} \mathrm{Assets} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Total}\hspace{0.17em}\mathrm{Assets}} \\ =\frac{10,00,000}{25,00,000}=0.4:1 \end{gathered}$$

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$$\begin{gathered} \mathrm{Debts} \mathrm{to} \mathrm{Total} \mathrm{Assets} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Total}\hspace{0.17em}\mathrm{Assets}} \\ =\frac{12,00,000}{44,00,000}=0.27:1 \end{gathered}$$
 

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$\begin{array}{l}\text{Debt to Total Assets Ratio}=\frac{\text{Debt}}{\text{Total Assets}}\\ \text{ =}\frac{24,00,000}{42,00,000}=0.57:1\\ \text{Total Assets}=\text{Shareholder's Funds + Total Debt}\\ =\text{6,00,000 + 36,00,000}=\text{Rs 42,00,000}\\ \mathrm{Debt}\mathrm{}=\mathrm{}\mathrm{Total} \mathrm{}\mathrm{Debt}\mathrm{}–\mathrm{}\mathrm{Current}\mathrm{} \mathrm{Liabilities}=36,00,000–12,00,000=\mathrm{}\mathrm{Rs}24,00,000\\ \mathrm{Current} \mathrm{}\mathrm{Liabilities}\mathrm{}=\mathrm{}\mathrm{Current} \mathrm{}\mathrm{Asset}\mathrm{}–\mathrm{}\mathrm{Working}\mathrm{} \mathrm{Capital}\mathrm{}=15,00,000–3,00,000=\mathrm{Rs}12,00,000\end{array}$

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$\begin{array}{l}\text{Debt to Total Assets Ratio}=\frac{\text{Debt}}{\text{Total Assets}}\\ \text{ =}\frac{12,00,000}{24,00,000}=0.5:1\\ \text{Debt}=\text{Long term Debt + Long term Provision}\\ =9\text{,00,000 + 3,00,000}=\text{Rs 12,00,000}\\ \text{Total Assets}=18,00\text{,000 }–\text{ 3,00,000 + 30,000 + 1,20,000 + 7,50,000}=\text{Rs 24,00,000}\end{array}$

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$$\begin{gathered} \mathrm{Debt} \mathrm{to} \mathrm{Total} \mathrm{Assets} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Total} \mathrm{Assets}} \\ =\frac{2,00,000}{11,00,000}=0.18:1 \end{gathered}$$

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$\begin{array}{l}\text{Debt to Equity Ratio}=\frac{\text{Debt}}{\text{Equity}}\\ \text{ =}\frac{16,50,000-6,00,000}{13,50,000}=0.78:1\\ \text{Equity}=\text{Total Assets }–\text{Total Debts}\\ =\text{30,00,000 }–\text{16,50,000}=\text{Rs 13,50,000}\end{array}$

$\begin{array}{l}\text{Debt to Total Assets Ratio}=\frac{\text{Debt}}{\text{Total Assets}}\\ \text{ =}\frac{16,50,000-6,00,000}{30,00,000}=0.35:1\end{array}$

$\begin{array}{l}\text{Proprietary Ratio}=\frac{\text{Shareholder's Funds}}{\text{Total Assets}}\times 100\\ \text{ =}\frac{13,50,000}{30,00,000}\times 100=45\%\end{array}$

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$$\begin{gathered} \mathrm{Interest} \mathrm{Coverage} \mathrm{Ratio} = \frac{\mathrm{Profit} \mathrm{before} \mathrm{Interest} \mathrm{and} \mathrm{Tax}}{\mathrm{Interest} \mathrm{on} \mathrm{Long}-\mathrm{term} \mathrm{Debts}} \\ \mathrm{Interest} \mathrm{Coverage} \mathrm{Ratio} = \frac{7,20,000*}{1,00,000} = 7.2 \mathrm{Times} \\ *\mathrm{Profit} \mathrm{after} \mathrm{Interest} \mathrm{but} \mathrm{before} \mathrm{Tax} =6,20,000 \\ Add: \mathrm{Interest} =\underline{1,00,000 } \\ \mathrm{Profit} \mathrm{before} \mathrm{Interest} \mathrm{and} \mathrm{Tax} = \mathrm{Rs} 7,20,000 \end{gathered}$$

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$\begin{array}{l}\text{Trade Receivables Turnover Ratio}=\frac{\text{Net Credit Revenue From Operations}}{\text{Average Trade Receivables}}\\ \text{ = }\frac{6,00,000}{1,50,000}=4\text{ times}\\ \text{Net Credit revenue From Operations}=\text{Collection from Trade Receivables + Discount Allowed + Closing Trade Receivables }-\text{Opening Trade Receivables}\\ \text{ = 5,34,000 + 6,000 + 1,80,000 }–\text{1,20,000 = Rs 6,00,000}\\ \text{Average Trade Receivables}=\frac{1,20,000+1,80,000}{2}=\text{Rs 1,50,000}\end{array}$

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$\begin{array}{l}\text{Trade Receivable Turnover Ratio =}\frac{\text{Credit Revenue from Operations}}{\text{Average Trade Receivables}}\\ \text{ 3 =}\frac{3,00,000}{\text{Average Trade Receivables}}\\ \text{Average Trade Receivables = }\frac{3,00,000}{3}=\text{Rs 1,00,000}\\ \text{Average Trade Receivables}=\frac{\text{Opening Trade Receivables}+\text{Closing Trade Receivables}}{2}\\ \text{ 1,00,000 =}\frac{x+4x}{2}\\ \text{So, x would be Rs 40,000 }\\ \therefore \text{Opening receivables would be Rs 40,000 and,}\\ \text{ Closing Receivables would be Rs 1,60,000}(40,000\times 4)\\ \text{Revenue from Operations}=\text{3,00,000+}\frac{25}{75}\times 3,00,000=\text{Rs 4,00,000}\\ \text{Credit Revenue from Operations}=\text{Total Revenue from Operations}-\text{Cash Revenue from Operations}\\ \text{ x}=\text{4,00,000-}\frac{1}{3}x\\ \text{Credit Revenue from Operations}=\text{Rs 3,00,000}\end{array}$

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$\begin{array}{l}\text{Trade Receivables Turnover Ratio}=\frac{\text{Net Credit Revenue From Operations}}{\text{Average Trade Receivables}}\\ \text{ 3}=\frac{3,00,000}{\text{Average Trade Receivables}}\\ \text{Average Trade Receivables}=\text{Rs 1,00,000}\\ \text{1,00,000}=\frac{\frac{1}{3}\times \text{Closing Trade Receivables}+\text{Closing Trade Receivables}}{2}\\ \text{Closing Trade Receivables}=2,00,000\times \frac{3}{4}=\text{Rs 1,50,000}\\ \text{Opening Trade Receivables}=\text{1,50,000}\times \frac{1}{3}=\text{Rs 50,000}\\ Note\text{:}\\ \text{Revenue From Operations}=\text{Cost of revenue From Operations + Gross Profit}\\ \text{ = 3,00,000 + 1,00,000}=\text{Rs 4,00,000}\\ \text{Gross Profit = 3,00,000}\times \frac{25}{75}=Rs1,00,000\\ \text{Revenue From Operations}=\text{Credit revenue From Operations}+\text{Cash revenue From Operations }\\ \text{4,00,000 = Credit revenue From Operations + }\frac{1}{3}\times \text{Credit revenue From Operations}\\ \text{Credit revenue From Operations}=4,00,000\times \frac{3}{4}=\text{Rs 3,00,000}\end{array}$

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$\begin{array}{l}\text{Trade Payables Turnover Ratio}=\frac{\text{Net Credit Purchases}}{\text{Average Trade Payables}}\\ \text{ 3}=\frac{3,00,000}{\text{Average Trade Payables}}\\ \text{Average Trade Payables}=\text{Rs 1,00,000}\\ \text{1,00,000}=\frac{\text{Opening Trade Payables}+\text{3 Opening Trade Payables}}{2}\\ \text{Opening Trade Payables}=2,00,000\times \frac{1}{4}=\text{Rs 50,000}\\ \text{Closing Trade Payables}=\text{50,000}\times 3=\text{Rs 1,50,000}\\ Note\text{:}\\ \text{Cost of Revenue From Operations}=\text{ Revenue From Operations }–\text{Gross Profit}\\ \text{ = 4,00,000}–\text{1,00,000}=\text{Rs 3,00,000}\\ \text{Gross Profit = 4,00,000}\times \frac{25}{100}=Rs1,00,000\\ \text{Cost Revenue From Operations}=\text{Opening Inventory}+\text{Purchases-Closing Inventory }\\ \text{ 3,00,000 = 5,00,000 + Purchases}–\text{6,00,000 = Rs 4,00,000}\\ \text{Cash Purchases = 4,00,000}\times \frac{1}{4}=Rs1,00,000\\ \text{Purchases}=\text{Cash Purchases}+\text{Credit Purchases}\\ 4,00,000=1,00,000+\text{Credit Purchases}\\ \text{Credit Purchases}=\text{Rs 3,00,000}\end{array}$

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$\begin{array}{l}\text{Trade Payables Turnover Ratio}=\frac{\text{Net Credit Purchases}}{\text{Average Trade Payables}}\\ \text{ 4}=\frac{3,20,000}{\text{Average Trade Payables}}\\ \text{Average Trade Payables}=\text{Rs 80,000}\\ \text{80,000}=\frac{\text{Opening Trade Payables}+4\text{ Opening Trade Payables}}{2}\\ \text{Opening Trade Payables}=1,60,000\times \frac{1}{5}=\text{Rs 32,000}\\ \text{Closing Trade Payables}=32\text{,000}\times 4=\text{Rs 1,28,000}\\ Note\text{:}\\ \text{Cost of Revenue From Operations}=\text{ Revenue From Operations }–\text{Gross Profit}\\ \text{ = 4,00,000 }–\text{1,00,000}=\text{Rs 3,00,000}\\ \text{Gross Profit = 4,00,000}\times \frac{25}{100}=\text{Rs\hspace{0.17em}}1,00,000\\ \text{Cost Revenue From Operations}=\text{Opening Inventory}+\text{Purchases}–\text{Closing Inventory }\\ \text{ 3,00,000 = 5,00,000 + Purchases }–\text{6,00,000 = Rs 4,00,000}\\ \text{Purchases}=\text{Cash Purchases}+\text{Credit Purchases}\\ 4,00,000=\frac{1}{4}\times \text{Credit Purchases}+\text{Credit Purchases}\\ \text{Credit Purchases}=\text{Rs 3,20,000}\end{array}$

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$$\begin{gathered} \mathrm{Working} \mathrm{Capital} \mathrm{Turnover} \mathrm{Ratio} = \frac{\mathrm{Revenue} \mathrm{from} \mathrm{Operations}}{\mathrm{Working} \mathrm{Capital}} \\ \mathrm{Working} \mathrm{Capital} \mathrm{Turnover} \mathrm{Ratio} = \frac{21,00,000}{3,50,000} = 6 \mathrm{Times} \\ \mathrm{Revenue} \mathrm{from} \mathrm{Operations} = \mathrm{Sales} - \mathrm{Sales} \mathrm{Return} \\ \mathrm{Revenue} \mathrm{from} \mathrm{Operations} = 23,00,000 - 2,00,000 = \mathrm{Rs} 21,00,000 \\ \mathrm{Working} \mathrm{Capital} = \mathrm{Current} \mathrm{Assets} - \mathrm{Current} \mathrm{Liabilities} \\ \mathrm{Working} \mathrm{Capital} = 6,00,000 - 2,50,000 = \mathrm{Rs} 3,50,000 \\ \mathrm{Current} \mathrm{Assets} = \mathrm{Marketable} \mathrm{Securities} + \mathrm{Inventory} + \mathrm{Sundry} \mathrm{Debtors} + \mathrm{Bills} \mathrm{Receivable} + \mathrm{Cash} \mathrm{at} \mathrm{Bank} + \mathrm{Cash} \mathrm{in} \mathrm{Hand} \\ \mathrm{Current} \mathrm{Assets} = 1,50,000 + 50,000 + 2,00,000 +50,000 +1,00,000 +50,000 = \mathrm{Rs} 6,00,000 \\ \mathrm{Current} \mathrm{Liabilities} = \mathrm{Bills} \mathrm{Payable} + \mathrm{Sundry} \mathrm{Creditors} + \mathrm{Provision} \mathrm{for} \mathrm{Tax} \\ \mathrm{Current} \mathrm{Liabilities} = 30,000 +2,00,000 + 20,000 = \mathrm{Rs} 2,50,000 \end{gathered}$$

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$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ =\frac{9,00,000}{1,50,000}=6\text{ times}\\ \text{Average Inventory}=\frac{\text{1,00,0000}+2,00,000}{2}=\text{Rs 1,50,000}\\ \text{Cost of Revenue From Operations}=\text{ Revenue From Operations }–\text{Gross Profit}\\ \text{ =11,25,000 }–\text{2,25,000}=\text{Rs 9,00,000}\\ \text{Gross Profit}=\text{11,25,000}\times \frac{25}{125}=\text{Rs }2,25,000\end{array}$

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Let Cost of Goods Sold be = x

Cost of Goods Sold = x = Rs 3,84,000

Cost of Goods Sold = Opening Inventory (Stock) + Purchases − Closing Inventory (Stock)

3,84,000 = Opening Inventory + 3,60,000 − 68,000

Opening Inventory = 3,84,000 − 2,92,000 = Rs 92,000

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Sales = 2,00,000

Gross Profit = 25% on Sales

Cost of Goods Sold = Total Sales − Gross Profit

= 2,00,000 − 50,000 = 1,50,000

Let Opening Inventory = x

Closing Inventory = x + 4,000

Opening Inventory = x = Rs 28,000

Closing Inventory = x + 4,000 = 28,000 + 4,000 = Rs 32,000

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$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ \text{ 8}=\frac{\text{Cost of Revenue From Operations}}{48,000}\\ \text{Cost of Revenue From Operations}=\text{Rs 3,84,000}\\ \text{Cost of Revenue From Operations}=\text{ Revenue From Operations }–\text{Gross Profit}\\ \text{ 3,84,000 = Revenue From Operations\hspace{0.17em}}–\text{96,000}\\ \text{Revenue From Operations}=\text{Rs 4,80,000}\\ \text{Gross Profit}=\text{3,84,000}\times \frac{25}{100}=Rs96,000\\ \text{Average Inventory}=\frac{\text{60,0000}+36,000}{2}=\text{Rs 48,000}\\ \text{Gross Profit Ratio =}\frac{\text{Gross Profit}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{96,000}{4,80,000}\times 100=20\%\end{array}$

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$$\begin{gathered} \mathit{G}\mathit{i}\mathit{v}\mathit{e}\mathit{n}: \\ \mathrm{Operating} \mathrm{Cost}=\mathrm{Rs} 3,40,000 \\ \mathrm{Operating} \mathrm{Expenses}=\mathrm{Rs} 40,000 \\ \mathrm{Gross} \mathrm{Profit} \mathrm{Ratio}=25\% \\ \mathit{F}\mathit{i}\mathit{n}\mathit{d}\mathit{ }\mathit{o}\mathit{u}\mathit{t}: \mathrm{Operating} \mathrm{Ratio} \\ \mathrm{Operating} \mathrm{Cost}=\mathrm{Cost} \mathrm{of} \mathrm{Revenue} \mathrm{from} \mathrm{Operations}+\mathrm{Operating} \mathrm{Expenses} \\ 3,40,000=\mathrm{Cost} \mathrm{of} \mathrm{Revenue} \mathrm{from} \mathrm{Operations}+40,000 \\ \mathrm{Cost} \mathrm{of} \mathrm{Revenue} \mathrm{from} \mathrm{Operations}=\mathrm{Rs} 3,00,000 \\ \mathrm{Gross} \mathrm{Profit}=\frac{1}{4}\mathrm{th} \mathrm{of} \mathrm{sales}=\frac{1}{3}\mathrm{rd} \mathrm{of} \mathrm{cost} \\ \mathrm{Gross} \mathrm{Profit}=\frac{1}{3}\times 3,00,000=\mathrm{Rs} 1,00,000 \\ \mathrm{Gross} \mathrm{Profit} \mathrm{Ratio}=\frac{\mathrm{Gross} \mathrm{Profit}}{\mathrm{Net} \mathrm{Sales}}\times 100 \\ 25=\frac{1,00,000}{\mathrm{Net} \mathrm{Sales}}\times 100 \\ \mathrm{Net} \mathrm{Sales}=\mathrm{Rs} 4,00,000 \\ \mathrm{Operating} \mathrm{Ratio}=\frac{\mathrm{Operating} \mathrm{Cost}}{\mathrm{Net} \mathrm{Sales}}\times 100 \\ =\frac{3,40,000}{4,00,000}\times 100=85\% \end{gathered}$$

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$\begin{array}{l}\text{Operating Ratio}=\frac{\text{Cost of Revenue from Operations}+\text{Operating Expenses}}{\text{Revenue from Operations}}\times 100\\ \text{ =}\frac{3,60,000+45,000}{4,50,000}\times 100=90\%\\ \text{Cost of Revenue from Operations}=\text{Revenue from Operations}-\text{Gross Profit}\\ =4,50\text{,000 - 90,000}=\text{Rs 3,60,000}\\ \text{Gross Profit = 4,50,000}\times \frac{25}{125}\text{\% = Rs 90,000 }\end{array}$

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$\begin{array}{l}\text{Earning Per Share}=\frac{\text{Earning Available to Equity Shareholders}}{\text{Number of Equity Shares}}\\ \text{ =}\frac{2,70,000-27,000}{80,000}=\text{Rs 3.04 per share}\\ \text{Price-Earning Ratio = }\frac{\text{Market Price Per Share}}{\text{Earning Per Share}}=\frac{40}{3.04}=13.16\text{ times}\\ \mathrm{Note}\mathrm{}:\mathrm{}\mathrm{Dividend}\mathrm{} \mathrm{on} \mathrm{}\mathrm{Preference} \mathrm{}\mathrm{Shares}=\mathrm{Rs} \mathrm{}27,000 \mathrm{}(\mathrm{}9\% \mathrm{of} \mathrm{}3,00,000)\end{array}$

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Net Profit after Tax (as per Statement of Profit and Loss) = 45,000

Provision for Taxation = 10,000

Net Profit before Interest and Tax = 45,000 + 10,000 = 55,000

Capital Employed = Share Capital + Reserves and Surplus + Long-term Borrowings

= 2,00,000 + 1,00,000 + 1,00,000 = 4,00,000

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Net Fixed Assets = Fixed Assets (at cost) − Accumulated Depreciation

= 22,50,000 − 2,50,000 = 20,00,000

Capital Employed = Net Fixed Assets + Current Assets − Current Liabilities

= 20,00,000 + 12,00,000 − 4,00,000

= 28,00,000

Interest on 10% Debentures = 10% of 10,00,000 = 1,00,000

Let Profit before Tax be = x

Profit after Tax = Profit Before Tax − Tax

Tax Rate = 50%

∴ Tax = 0.5 x

x − 0.5 x = 6,50,000

x = 13,00,000

Net Profit before Tax = x = 13,00,000

Profit before Interest and Tax = Profit before Tax + Interest on Long-term Debt

= 13,00,000 + 1,00,000

= 14,00,000

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Net Profit before Interest and Tax = 2,50,000

Capital Employed = 10,00,000

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Net Profit before Interest and Tax = 6,00,000

Capital Employed = Net Fixed Assets + Net Working Capital

= 20,00,000 + 10,00,000 = 30,00,000

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Net Profit before Interest and Tax = 4,00,000

Capital Employed = 15% long-term Debt + Shareholders’ Funds

= 8,00,000 + 4,00,000 = 12,00,000

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$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ \text{ 4}=\frac{2,25,000}{\text{Average Inventory}}\\ \text{Average Inventory}=\text{Rs 56,250}\\ \text{Average Inventory}=\frac{\text{Opening Inventory}+\text{Closing Inventory}}{2}\\ 56,250=\frac{\text{Opening Inventory}+(\text{Opening Inventory}+20,000)}{2}\\ \text{Opening Inventory}=\text{Rs 46,250}\\ \text{Closing Inventory = Rs 66,250}\\ \text{Quick Ratio = }\frac{\text{Current Assets }-\text{Closing Inventory}}{\text{Current Liabilities}}\\ 0.75=\frac{\text{Current Assets}-66,250}{40,000}\\ \text{Current Assets}=\text{Rs 96,250}\end{array}$

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Let Debt to be Rs. 2, 00,000 and Equity = Rs. 1, 00,000

  a) Sale of Land book value Rs. 5,00,000, So

 

  

 

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$\left(\mathrm{i}\right) \mathrm{Debt} \mathrm{to} \mathrm{Equity} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Equity}}=\frac{3,00,000}{12,00,000}=1:4$

$$\begin{gathered} \left(\mathrm{ii}\right) \mathrm{Proprietary} \mathrm{Ratio}=\frac{\mathrm{Shareholders}\text{'} \mathrm{Funds}}{\mathrm{Total} \mathrm{Assets}} \\ =\frac{12,00,000}{18,00,000}\times 100=66.67\% \end{gathered}$$

$$\begin{gathered} \left(\mathrm{iii}\right) \mathrm{Debt} \mathrm{to} \mathrm{Total} \mathrm{Assets} \mathrm{Ratio}=\frac{\mathrm{Debt}}{\mathrm{Total} \mathrm{Assets}} \\ =\frac{3,00,000}{18,00,00}=0.17:1 \end{gathered}$$
 

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$\begin{array}{l}\text{Debt to Equity Ratio}=\frac{\text{Debt}}{\text{Equity}}\\ \text{ =}\frac{2,00,000}{7,00,000}=0.29:1\\ \text{Equity}=\text{Equity Share Capital}+\text{Reserve \& Surplus}\\ \text{ =5,50,000 + 50,000 + 1,00,000 = Rs 7,00,000}\end{array}$

$\begin{array}{l}\text{Working Capital Turnover Ratio}=\frac{\text{Revenue from Operations}}{\text{Working Capital}}\\ \text{ = }\frac{15,00,000}{1,00,000}=15\text{ times}\\ \text{Working capital}=(1,45,0000+55,0000)-1,00,000=\text{Rs 1,00,000}\end{array}$

$\begin{array}{l}\text{Return on Investment}=\frac{\text{Profit Before Interest \& Tax}}{\text{Capital Employed}}\times 100\\ \text{ =}\frac{2,18,000}{9,00,000}\times 100=24.22\mathrm{\%}\\ \text{Capital Employed}=\text{Non-Current Assets}+\text{Current Assets}-\text{Current Liabilities}\\ \text{ = 6,50,000 + 1,50,000 + 2,00,000 }-\text{1,00,000 = Rs 9,00,000}\\ \mathrm{Profit} \mathrm{}\mathrm{before} \mathrm{}\mathrm{Tax} \mathrm{}\mathrm{and} \mathrm{}\mathrm{Interest}\mathrm{}=\mathrm{}\mathrm{Profit} \mathrm{after} \mathrm{Tax}\mathrm{}+\mathrm{}\mathrm{Tax}\mathrm{}+\mathrm{}\mathrm{Interest}\\ \mathrm{}=\mathrm{}1,00,000+\mathrm{}1,00,000\mathrm{}+\mathrm{}18,000\mathrm{}=\mathrm{}\mathrm{Rs}\mathrm{}2,18,000\end{array}$

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$\begin{array}{l}\text{Operating Ratio}=\frac{\text{Cost of Revenue from Operations}+\text{Operating Expenses}}{\text{Revenue from Operations}}\times 100\\ \text{ =}\frac{13,20,000+2,20,000}{22,00,000}\times 100=70\%\\ \text{Cost of Revenue from Operations}=\text{Revenue from Operations}-\text{Gross Profit}\\ =10,00\text{,000 +12,00,000}-\text{8,80,000}=\text{Rs 13,20,000}\\ \text{Gross Profit = 22,00,000}\times 40\text{\%}=8,80,000\end{array}$

$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ =\frac{13,20,000}{1,60,000}=8.25\text{ times}\\ \text{Average Inventory}=\frac{\text{1,50,000}+\text{1,70,000}}{2}=\text{Rs 1,60,000 }\end{array}$

$\begin{array}{l}\text{Proprietary Ratio}=\frac{\text{Shareholder's Funds}}{\text{Total Assets}}\times 100\\ \text{ =}\frac{6,00,000}{8,00,000}\times 100=75\%\\ \text{Shareholder's Funds/Equity}=\text{Non-Current Assets + Working Capital}-\text{Non-Current Liabilities}\\ \text{ = 5,00,000 + 1,00,000 = Rs 6,00,000}\end{array}$

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$$\begin{gathered} \mathrm{Inventory} \mathrm{Turnover} \mathrm{Ratio} \left(2015\right) = \frac{\mathrm{Cost} \mathrm{of} \mathrm{Revenue} \mathrm{from} \mathrm{Operations}}{\mathrm{Average} \mathrm{Stock}} \\ \mathrm{or}, \mathrm{Inventory} \mathrm{Turnover} \mathrm{Ratio} \left(2015\right) = \frac{42,000}{14,000} = 3 \mathrm{Times} \end{gathered}$$

$$\begin{gathered} \mathrm{Inventory} \mathrm{Turnover} \mathrm{Ratio} \left(2016\right) = \frac{\mathrm{Cost} \mathrm{of} \mathrm{Revenue} \mathrm{from} \mathrm{Operations}}{\mathrm{Average} \mathrm{Stock}} \\ \mathrm{or}, \mathrm{Inventory} \mathrm{Turnover} \mathrm{Ratio} \left(2016\right) = \frac{50,000}{20,000} = 2.5 \mathrm{Times} \end{gathered}$$

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$\begin{array}{l}\text{Return on Investment}=\frac{\text{Profit Before Interest \& Tax}}{\text{Capital Employed}}\times 100\\ \text{ =}\frac{14,50,000}{88,00,000}=16.48\%\\ \text{Capital Employed}=\text{Non-Current Assets}+\text{Current Assets}-\text{Current Liabilities}\\ \text{ = 75,00,000 + 40,00,000}-\text{27,00,000 = Rs 88,00,000}\end{array}$

$\begin{array}{l}\mathrm{Debt}\mathrm{}\mathrm{to}\mathrm{}\mathrm{Total}\mathrm{}\mathrm{Asset}\mathrm{}\mathrm{Ratio}\mathrm{}=\mathrm{}\frac{\mathrm{Debt}}{\mathrm{Total}\mathrm{Assets}}\\ =\frac{80,00,000}{1,15,00,000}=0.6956:1\\ \mathrm{Debt}=12\mathrm{\%}\mathrm{Debentures}\mathrm{}=\mathrm{Rs}80,00,000\\ \mathrm{Total}\mathrm{Assets}=\mathrm{Fixed}\mathrm{Assets}+\mathrm{Current}\mathrm{Assets}=75,00,000+40,00,000\\ =\mathrm{Rs}\mathrm{}1,15,00,000\end{array}$

Answer:

$\begin{array}{l}\text{Return on Investment}=\frac{\text{Profit Before Interest \& Tax}}{\text{Capital Employed}}\times 100\\ \text{ =\hspace{0.17em}\hspace{0.17em}}\frac{2,00,000}{6,40,000}=31.25\%\\ \text{Capital Employed}=\text{Shareholders' Funds\hspace{0.17em}}+\text{\hspace{0.17em}Long Term Debts}\\ \text{ =2,40,000\hspace{0.17em}+\hspace{0.17em}4,00,000\hspace{0.17em}=\hspace{0.17em}Rs 6,40,000}\\ \text{Profit Before Interest \& Tax}=1,40,000+60,000=\text{Rs 2,00,000}\end{array}$

Answer:

$\begin{array}{l}\text{Return on Investment}=\frac{\text{Profit Before Interest \& Tax}}{\text{Capital Employed}}\times 100\\ \text{ =}\frac{11,00,000}{80,00,000}=13.75\%\\ \text{Profit Before Interest \& Tax}=6,00,000+4,00,000(6,00,000\times \frac{40}{60})+1,00,000=\text{Rs 11,00,000}\end{array}$

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1.
$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ =\frac{3,15,000}{\text{29,500}}=10.68\text{ times}\\ \text{Average Inventory}=\frac{\text{Opening Inventory}+\text{Closing Inventory}}{2}\\ =\frac{24,000+35,000}{2}=\text{Rs 29,500}\\ \text{Cost of Revenue From Operations}=\text{\hspace{0.17em}Opening Inventory}+Purchases-\text{Closing Inventory}\\ =24,000+3,26,000-35,000=\text{Rs 3,15,000}\\ \end{array}$

2.
$\begin{array}{l}\text{Gross Profit Ratio =}\frac{\text{Gross Profit}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{2,25,000}{5,40,000}\times 100=41.67\%\\ \text{Gross Profit}=\text{Revenue From Operations\hspace{0.17em}}-Costof\text{\hspace{0.17em}Revenue From Operations}\\ =5,40,000-3,15,000=\text{Rs 2,25,000}\end{array}$

3.
$\begin{array}{l}\mathrm{Working}\mathrm{} \mathrm{Capital}\mathrm{} \mathrm{Turnover} \mathrm{}\mathrm{Ratio}\mathrm{}=\frac{\mathrm{Revenue} \mathrm{}\mathrm{From} \mathrm{}\mathrm{Operations}}{\mathrm{Working} \mathrm{}\mathrm{Capital}}\times 100\\ =\frac{5,40,000}{2,350}=229.79\mathrm{} \mathrm{times}\\ \mathrm{Working}\mathrm{}\mathrm{Capital}=\mathrm{Current}\mathrm{Assets}-\mathrm{Current}\mathrm{Liabilities}\\ =1,01,900-99,550=\mathrm{Rs} \mathrm{}2,350\end{array}$

4.
$\begin{array}{l}\text{ Current Ratio}=\frac{\text{Current Assets}}{\text{Current Liabilities}}\\ =\frac{\text{1,01,900}}{\text{99,550}}=1.024\text{:1}\end{array}$

5.
$\begin{array}{l}\text{Quick Ratio}=\frac{\text{Quick Assets}}{\text{Current Liabilities}}\\ =\frac{\text{1,01,900}-\text{35,000}}{99,550}=0.67\text{:1}\end{array}$

6.
$\begin{array}{l}\text{Net Profit Ratio=}\frac{\text{Net Profit}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{98,000}{5,40,000}\times 100=18.15\%\\ \end{array}$

7.
$\begin{array}{l}\text{Debt to Equity Ratio}=\frac{\text{Debt}}{\text{Equity}}\\ \text{ =}\frac{40,000}{2,66,700}=0.15:1\\ \text{Equity}=\text{Share Capital}+\text{Reserve \& Surplus}\\ \text{ \hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}=1,85,000+81,700\hspace{0.17em}=\hspace{0.17em}Rs 2,66,700}\end{array}$

8.
$\begin{array}{l}\text{Trade Receivables Turnover Ratio}=\frac{\text{Net Credit revenue From Operations}}{\text{Average Trade Receivables}}\\ \text{ =}\frac{3,24,000}{50,000}=6.48\text{ times}\\ \text{Net Credit revenue From Operations}=5,40,000\times \frac{60}{100}\text{ =Rs 3,24,000}\\ \text{Average Inventory}=\frac{\text{Opening Inventory}+\text{Closing Inventory}}{2}\\ \text{Average Trade Receivables}=\frac{54,000+46,000}{2}=\text{Rs 50,000}\end{array}$

9.
$\begin{array}{l}\mathrm{Proprietary} \mathrm{}\mathrm{Ratio}=\frac{\mathrm{Shareholder}\text{'}\mathrm{s} \mathrm{}\mathrm{Funds}}{\mathrm{Total}\mathrm{} \mathrm{Assets}}\times 100\\ =\frac{2,66,700}{4,06,250}=0.66:1\\ \mathrm{Shareholder}\text{'}\mathrm{s}\mathrm{} \mathrm{Funds}=\mathrm{Share}\mathrm{Capital}+\mathrm{Reserves}\mathrm{and}\mathrm{Surplus}\\ =1,85,000+81,700=\mathrm{Rs}2,66,700\end{array}$

10.
$\begin{array}{l}\text{Debt to Total Assets Ratio}=\frac{\text{Debt}}{\text{Total Assets}}\\ \text{ =}\frac{40,000}{4,06,250}=0.098:1\end{array}$

11.
$\begin{array}{l}\mathrm{Earning}\mathrm{} \mathrm{Per} \mathrm{}\mathrm{Share}=\frac{\mathrm{Earning} \mathrm{}\mathrm{Available}\mathrm{} \mathrm{to}\mathrm{} \mathrm{Equity} \mathrm{}\mathrm{Shareholders}}{\mathrm{Number} \mathrm{}\mathrm{of} \mathrm{}\mathrm{Equity} \mathrm{}\mathrm{Shares}}\\ \mathrm{}=\frac{98,000-4,800}{12,500}=\mathrm{Rs}\mathrm{}7.456\mathrm{} \mathrm{per}\mathrm{} \mathrm{share}\\ \mathrm{Earning} \mathrm{}\mathrm{Available} \mathrm{}\mathrm{to} \mathrm{}\mathrm{Equity} \mathrm{}\mathrm{Shareholders}=\mathrm{Net}\mathrm{Profit}-\mathrm{Dividend}\mathrm{of}\mathrm{Preference}\mathrm{Shareholders}\\ \\ \end{array}$

12.
$\begin{array}{l}\mathrm{Return} \mathrm{}\mathrm{on} \mathrm{}\mathrm{Investment}=\frac{\mathrm{Profit} \mathrm{}\mathrm{Before}\mathrm{} \mathrm{Interest} \& \mathrm{}\mathrm{Tax}}{\mathrm{Capital}\mathrm{} \mathrm{Employed}}\times 100\\ \mathrm{}=\frac{1,43,200}{3,06,700}=46.69\mathrm{\%}\\ \mathrm{Profit} \mathrm{}\mathrm{Before} \mathrm{}\mathrm{Interest} \mathrm{}\& \mathrm{}\mathrm{Tax}=\mathrm{NetProfit}+\mathrm{Tax}\mathrm{Expenses}+\mathrm{Interest}\mathrm{on}\mathrm{Debentures}\\ =98,000+42,000+3,200=\mathrm{Rs}\mathrm{}1,43,200\end{array}$

13.
$\text{Price-Earning Ratio=}\frac{\text{Market Price Per Share}}{\text{Earning Per Share}}=\frac{37.28}{7.456}=5\text{ times}$

Answer:

$\begin{array}{l}\text{Operating Ratio}=\frac{\text{Cost of Revenue from Operations}+\text{Operating Expenses}}{\text{Revenue from Operations}}\times 100\\ \text{ =}\frac{13,20,000+2,20,000}{22,00,000}\times 100=70\%\\ \text{Cost of Revenue from operations}=\text{Revenue from Operations}-\text{Gross Profit}\\ =10,00\text{,000 + 12,00,000 }-\text{8,80,000}=\text{Rs 13,20,000}\\ \text{Gross Profit = 22,00,000}\times 40\text{\%}=Rs\text{ 8,80,000 }\end{array}$

$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ =\frac{13,20,000}{1,60,000}=8.25\text{ times}\\ \text{Average Inventory}=\frac{\text{1,50,000}+\text{1,70,000}}{2}=\text{Rs 1,60,000 }\end{array}$

Answer:

A.
$\begin{array}{l}\text{Trade Receivables Turnover Ratio}=\frac{\text{Net Credit revenue From Operations}}{\text{Average Trade Receivables}}\\ =\frac{6,00,000}{\text{1,60,000}}=3.75\text{ times}\\ \text{Average Trade Receivables}=\frac{1,20,000+2,00,000}{2}=\text{Rs 1,60,000}\\ \text{Revenue From Operations}=\text{Cash revenue From Operations + Credit revenue From Operations}\\ \text{ 8,40,000 =0.4 Credit revenue From Operations + Credit revenue From Operations }\\ \text{Credit revenue From Operations}=8,40,000\times \frac{1}{1.4}=\text{Rs 6,00,000}\end{array}$

B.
$\begin{array}{l}\text{Interest Coverage Ratio}=\frac{\text{Profit Before Interest \& Tax}}{\text{Interest}}\\ =\frac{7,82,000}{72,000}=10.86\text{ times}\\ \text{Profit Before Interest \& Tax}=4,97,000+2,13,000(4,97,000\times \frac{30}{70})+72,000\text{\hspace{0.17em}\hspace{0.17em}=\hspace{0.17em}Rs 7,82,000}\\ \end{array}$

 

Answer:

$\begin{array}{l}\text{Current Ratio = }\frac{\text{Current Assets}}{\text{Current Liabilities}}\\ 2.5=\frac{\text{CA}}{\text{CL}}\\ 2.5\text{ CL}=\text{CA}\\ \text{Working Capital = CA}-\text{CL}\\ 1,20,000=2.5\text{ CL}-\text{CL}\\ \text{CL}=\text{Rs 80,000}\\ \text{CA = 80,000}\times \text{2.5 = Rs 2,00,000}\\ \text{Quick Ratio = }\frac{\text{Current Assets}-\text{Closing Stock}}{\text{Current Liabilities}}\\ 1.5=\frac{2,00,000-\text{Closing Stock}}{80,000}\\ \text{Closing Stock}=\text{Rs 80,000}\\ \text{Quick Assets\hspace{0.17em}=\hspace{0.17em}Current Assets }-\text{Closing Stock}=2,00,000-80,000=\text{Rs 1,20,000}\\ \text{Inventory Turnover Ratio\hspace{0.17em}=\hspace{0.17em}}\frac{\text{Cost of Revenue from Operations}}{\text{Average Stock}}\\ 3=\frac{3,00,000}{\text{Average Stoc}k}\\ \text{Average Stock\hspace{0.17em}= Rs 1,00,00}\\ 1,00,000=\frac{\text{Opening stock\hspace{0.17em}+\hspace{0.17em}80,000}}{2}\\ \text{Opening stock}=\text{Rs 1,20,000}\end{array}$

Answer:

1.
$\begin{array}{l}\mathrm{Current} \mathrm{}\mathrm{Ratio}=\frac{\mathrm{Current} \mathrm{}\mathrm{Assets}}{\mathrm{Current} \mathrm{}\mathrm{Liabilities}}\mathrm{}=\frac{16,40,000}{8,40,000}\mathrm{}=2:1\mathrm{}\\ \mathrm{Current}\mathrm{} \mathrm{Assets}=\mathrm{Inventories}+\mathrm{Current}\mathrm{Investments}+\mathrm{Trade}\mathrm{Receivables}+\mathrm{Cash}\mathrm{and}\mathrm{Bank}\mathrm{Balances}\\ \mathrm{Prepaid}\mathrm{Expenses}+\mathrm{}\mathrm{Short}\mathrm{} \mathrm{term}\mathrm{} \mathrm{Loans} \mathrm{}\mathrm{and} \mathrm{}\mathrm{Advances}\\ =\mathrm{}7,90,000+20,000+8,00,000+10,000+10,000+10,000=\mathrm{Rs}16,40,000\\ \mathrm{Current} \mathrm{}\mathrm{Liabilities}=\mathrm{Trade} \mathrm{}\mathrm{payables}\mathrm{}+\mathrm{}\mathrm{Short} \mathrm{}\mathrm{term} \mathrm{}\mathrm{Bank}\mathrm{} \mathrm{Loan}\mathrm{}+\mathrm{}\mathrm{Other} \mathrm{}\mathrm{Current} \mathrm{}\mathrm{Liabilities}\\ +\mathrm{Provision}\mathrm{} \mathrm{for}\mathrm{}\mathrm{Taxation}\mathrm{}+\mathrm{}\mathrm{Provision} \mathrm{}\mathrm{for}\mathrm{} \mathrm{Doubtful} \mathrm{}\mathrm{Debts}\\ =\mathrm{}2,00,000+80,000+2,80,000+2,40,000+40,000=\mathrm{Rs}8,40,000\end{array}$

2.
$\begin{array}{l}\mathrm{Quick} \mathrm{}\mathrm{Ratio}=\frac{\mathrm{Quick}\mathrm{} \mathrm{Assets}}{\mathrm{Current} \mathrm{}\mathrm{Liabilities}}\\ \mathrm{}=\frac{16,40,000-7,90,000-10,000}{8,40,000}\mathrm{}=1:1\\ \mathrm{Quick} \mathrm{}\mathrm{Assets}=\mathrm{Current}\mathrm{Assets}\mathrm{}-(\mathrm{Inventories}+\mathrm{Prepaid}\mathrm{Expenses})\\ =16,40,000-7,90,000-10,000=\mathrm{Rs} \mathrm{}8,40,000\end{array}$

3.
$\begin{array}{l}\text{Debt to Equity Ratio}=\frac{\text{Debt}}{\text{Equity}}\\ \text{ =}\frac{16,00,000}{8,00,000}=2:1\\ \text{Equity}=\text{Share Capital}+\text{Reserve \& Surplus}\\ \text{ =2,00,000+2,00,000+1,60,000+2,40,000\hspace{0.17em}=\hspace{0.17em}Rs 8,00,000}\\ \text{Debt}=12\mathrm{\%} \mathrm{Debentures}+\text{\hspace{0.17em}Long\hspace{0.17em}term Provisions}\\ =10,00,000+6,00,000=\mathrm{Rs}16,00,000\\ \end{array}$

4.
$\begin{array}{l}\text{Debt to Total Assets Ratio}=\frac{\text{Debt}}{\text{Total Assets}}\\ \text{ =}\frac{16,00,000}{16,40,000+10,00,000+4,00,000}=0.5:1\end{array}$

5.
$\begin{array}{l}\text{Proprietary Ratio}=\frac{\text{Shareholder's Funds}}{\text{Total Assets}}\times 100\\ \text{ =}\frac{8,00,000}{32,40,000}=.25:1\\ \text{Total Assets\hspace{0.17em}}=\text{\hspace{0.17em}Fixed Assets + Non-Current Investments + Long term Loans and Advances + Inventories}\\ \text{ + Current Investments+ Trade Receivables + Cash and Bank Balances }\\ \text{ + Prepaid Expenses + Short term Loans and Advances = Rs 32,40,000}\end{array}$

6.
$\begin{array}{l}\text{Interest Coverage Ratio}=\frac{\text{Profit before Interest \&Tax}}{\text{Total Interest}}\\ \text{ =}\frac{6,00,000}{1,20,000}=5\text{ times}\\ \text{Profit before Interest \&Tax\hspace{0.17em}}=\text{\hspace{0.17em}Profit after Interest \&Tax\hspace{0.17em}+ Tax + Interest on Debentures}\\ =2,40,000+2,40,000+1,20,000=\text{\hspace{0.17em}Rs 6,00,000}\end{array}$

7.
$\begin{array}{l}\text{Inventory Turnover Ratio}=\frac{\text{Cost of Revenue From Operations}}{\text{Average Inventory}}\\ =\frac{12,00,000}{5,00,000}=2.4\text{ times}\\ \text{Average Inventory}=\frac{\text{Opening Inventory}+\text{Closing Inventory}}{2}\\ =\frac{2,10,000+7,90,000}{2}=\text{Rs 5,00,000}\\ \text{Cost of Revenue From Operations}=\text{\hspace{0.17em}Opening Inventory + Purchases }-\text{ Closing Inventory }\\ \text{\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}=}2,10,000+17,80,000-7,90,000=\text{Rs 12,00,000}\\ \end{array}$

8.
$\begin{array}{l}\text{Trade Receivables Turnover Ratio}=\frac{\text{Net Credit revenue From Operations}}{\text{Average Trade Receivables}}\\ \text{ =}\frac{16,00,000}{8,00,000}=2\text{ times}\\ \text{Net Credit Revenue From Operations}=\text{Total Revenue From Operations}-\text{ Cash Revenue From Operations}\\ =20,00,000-4,00,000\text{=Rs 16,00,000}\\ \end{array}$

9.
$\begin{array}{l}\text{Trade Payables Turnover Ratio}=\frac{\text{Net Credit Purchases}}{\text{Average Trade Payables}}\\ \text{ =}\frac{17,80,000}{2,00,000}=8.9\text{ times}\\ \end{array}$

10.
$\begin{array}{l}\text{Working Capital Turnover Ratio=}\frac{\text{Revenue From Operations}}{\text{Working Capital}}\times 100\\ \text{ =}\frac{20,00,000}{8,00,000}=2.5\text{ times}\\ \text{Working Capital}=16,40,000-8,40,000=\text{Rs 8,00,000}\end{array}$

11.
$\begin{array}{l}\text{Gross Profit Ratio=}\frac{\text{Gross Profit}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{8,00,000}{20,00,000}\times 100=40\%\\ \text{Gross Profit}=\text{\hspace{0.17em}Revenue From Operations\hspace{0.17em}}-\text{\hspace{0.17em}Cost of Revenue From Operations}\\ =20,00,000-12,00,000=\text{Rs 8,00,000}\end{array}$

12.
$\begin{array}{l}\text{Net Profit Ratio=}\frac{\text{Net Profit}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{2,40,000}{20,00,000}\times 100=12\%\end{array}$

13.
$\begin{array}{l}\text{Operating Ratio=}\frac{\text{Cost of Revenue From Operations+Operating Expenses}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{12,00,000+2,00,000}{20,00,000}\times 100=70\%\\ \end{array}$

14.
$\begin{array}{l}\text{Operating Profit Ratio =}\frac{\text{Operating Profit}}{\text{Revenue From Operations}}\times 100\\ \text{ =}\frac{6,00,000}{20,00,000}\times 100=30\%\\ \text{Operating Profit\hspace{0.17em}}=\text{\hspace{0.17em}Gross Profit}-\text{Operating Expenses}\\ \text{\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}\hspace{0.17em}=}8,00,000-2,00,000=\text{\hspace{0.17em}Rs }6,00,000\end{array}$