Question 79. 70,000 + Rs. 3,00,000 Rs. Opening Inventory Rs. Step by Step answers to all the exercise questions are provided by experts to help you prepare better in your examination. 60,000Inventory Turnover Ratio = (Rs. Q4. of the company is 25%. 10,000 and the 'Revenue from Operations' are Rs. Accounting Ratios class 12 Notes Accountancy in PDF are available for free download in myCBSEguide mobile app. 8,92,000. 25,000 (Cost Rs. Trade Receivables Turnover Ratio =(Rs.19,50,000 )/(rs.3,90,000)= 5 timesSo, the Trade Receivables Turnover Ratio is 5 times. 1,20,000, Below is the Calculation of Current Assets:-Current Assets = Working Capital + Current LiabilitiesCurrent Assets = Rs. 2,00,000, Calculation of Operating Expenses:-Operating Expenses = Office and Administrative Expenses + Selling ExpensesOperating Expenses = Rs. 8,20,000 )/2Average trade Receivables = Rs. Calculate Inventory Turnover Ratio. 3,00,000. 2,50,000 + Rs. 80,000Inventory Turnover Ratio = (Cost of Revenue from Operations )/(Average Inventory)8 =(Cost of Revenue from Operations )/(Rs.80,000), Cost of Revenue from Operations = Rs. The ratio estimation formula is Current Ratio = (Current Assets)/ (Current Liabilites) Quick Ratio:- The Fast Ratio shows whether the company is in a position to pay its existing obligations immediately or within a month. Question 29. 3,50,000; Sales from Operations Returns (Sales Returns) Rs. 1,00,000, Calculation of Average Inventory:-Average Inventory = (Opening Inventory+Closing inventory )/2Average Inventory = (Rs.75,000+ Rs.1,00,000 )/2Average Inventory = Rs. 3,90,000. But in this case the quick ratio is .78: 1, hence, the short- term financial position cannot be said to be satisfactory. 5,40,000 Rs. 4,00,000Credit Sales from Operation activity Rs. 5,20,000Opening Inventory = Rs. This is a very important chapter as accounting ratios are utilized almost in all types of conditions in the future so that you are able to clearly understand the financial situation of a company. (ii) sale of goods on credit Rs. 5,00,000 Working Capital Rs. 4,68,000. Excess of Closing Trade Receivables over Opening Trade Receivables Rs. This results in higher costs of transportation, the blocking of funds and losses on goods accounts being redundant or capable of un-sale. Question 50. 50,000 is repaid, the Long-Term Debts will be reduced by Rs. What does debts-equity ratio indicate? 7,20,000 Rs. 63,00,000. 75,00,000) 100Return on Capital Employed = 16%So, the Return on Capital Employed is 16%, Working Note:-Interest on Loan = Rs. State the main limitation of Current Ratio. 40,000. Solution 151(1) Calculation of Current Ratio:Formula for Current Ratio:Current Ratio = (current Assets )/(Current Liabilities)Current Assets = Inventory + cash & Cash Equivalents + Short term InvestmentsCurrent Assets = Rs. 46,000 + Rs. 3,00,000, Below is the Calculation of Average Inventory:-Average Inventory = (Opening Inventory + Closing Inventory )/2Average Inventory = (Rs. Following are the details available: , If the closing inventory is more by Rs. 2,40,000 (3 )/4Opening Inventory = Rs. Solution144Calculation of Current Assets; Current Liabilities and Liquid Assets:The given information: Current Ratio= 2.8Liquid Ratio = 1.6.Difference between Current ratio and Liquid Ratio is inventory.Hence, Inventories is 2.8 1.6 = 1.2.If Inventory is 2, Current Assets =2.8If Inventory is 1, Current Assets = 2.8/1.2If Inventory is 48,000,Current Assets = 2.8/1.2Rs.48,000= Rs. 5,00,000 Rs. 2,25,000 Rs. 50,000=Rs. 40,000; Office Expenses Rs. 32,000So, the Current Assets is Rs, 56,000Current Liabilities is Rs. 12,00,000 20/( 120)Gross Profit = Rs. 120Sales from Operations is Rs. 5,000, Solution173The Calculation of Trade Receivables Turnover Ratio:Trade Receivables Turnover Ratio =(Rs.1460,000 )/(Rs.2,92,000) = 5 times=(Rs.60,000)/(Rs.5,000+Rs.5,000)=(Rs.60,000 )/(Rs.10,000)= 6 timesSo, the Trade Receivables Turnover Ratio: 6 times. 1,60,000= Rs. Ratio 30% of Sales from OperationsYou are informed that closing trade receivables were three times than that in the beginning. 5,80,000 = Opening Inventory + Rs. From the following compute (a) Current Ratio (b) Quick Ratio: Current Assets= Current Investments + Inventories (except loose tools) + Trade Receivables + Short term loans & Advances + Prepaid Insurance + Advance Payment of Tax + cash and cash equivalents=Rs. Ramsukha Das 20,000Purchase = Rs. 52,000; Sales from Operations Rs. 3,00,000. 6,00,000, G.P. The Current Ratio of a Company is 0.8:1. 2,00,000= Rs. 40,000.So, the value of Inventory is 40,000. 4,50,000. 1,20,000Gross Profit = Rs. It provides users with crucial financial information and points out the areas which require investigation. In an organization where the product turnover ratio is high, products may be sold at a low profit margin and the profitability may be very high even then.A poor inventory turnover ratio means that for such a long time, inventory does not sell easily and stays lying in the godown. Rs. 1,08,000And Inventories is RS. 1,65,00,000, Calculation of Liquid Liabilities:-Current Liabilities = Current Assets Net Working CapitalCurrent Liabilities = Rs3,96,00,000 Rs. 8,96,000 Rs. Question 100. 5,60,000; Gross Profit 40% on cost. 70,000Current Assets = Liquid Assets + Inventory= RS. 80,000; Cash revenue from Operations Rs. 5,95,000Gross profit = Rs. Compute the amount of gross profit and Sales from operations. Trade receivables included a debtor sh. 48,000. 100 is sold for Rs. Solution 36:Calculation of Debt-Equity Ratio:-Total Assets to Debt ratio = (Total assets )/( Debt )Total Assets to Debt Ratio = 63,00,000/( 35,00,000)Total Assets to Debt Ratio = 1.8:1So, the Debt Equity Ratio is 0.57:1. 12,00,000)/(Rs. 18,000 Rs. 2,42,000, Calculation of Gross Profit:-Gross Profit = Revenue from Operations Returns Inwards Cost of Revenue from OperationsGross Profit = Rs. 4 0 obj 5,000Closing Trade Receivables = Rs. Calculation for the Year of 2017:-Calculation of Trade receivable turnover ratio:-Trade receivables turnover Ratio = (Net Credit Revenue from Operations )/(Average Trade Receivables )Trade receivables turnover Ratio =(60,00,000 )/(8,00,000 )Trade receivables turnover Ratio = 7.5 TimesSo, the trade receivables turnover Ratio is 7.5 Times. Comment: A reasonable interest-coverage ratio is 6 or 7, but this companys actual ratio is 4. Question 183. 40,000Inventory Turnover Ratio = (Rs.1,60,000)/(Rs.40,000)=4 timesSo, The Inventory turnover Ratio is 4 times. 2,00,000Total Sales from Operations will be = 1,00/(66 2/3) RS.2,00,000= 100 3/2002,00,000= Rs. 24,50,000 + Rs. Calculate Current Assets, Current Liabilities and Inventory. 6,00,000 Rs. Essay 21,000; Sales from Operations Rs. 3,60,000Proprietary Ratio = (Rs.1,90,000 )/( Rs.3,60,000 ) = .5278 or 52.78%So, the Proprietary ratio is 52.78%. Quick ratio 3; Current Assets Rs. 4,20,000, Current Assets Rs. iv. 1,12,000, Below is the calculation of Average Inventory:Average Inventory = (Opening Inventory+Closing Inventory)/2Average Inventory = (56,000 + 44,000)/2Average Inventory = 1,00,000/2Average Inventory = Rs. Calculation of Closing Inventory:Cost of Sales from operations = Opening Inventory + Purchases Closing InventoryHence, Closing Inventory = Opening Inventory + Purchases Cost Of Sales from Operations= RS. 1,10,000, Calculation of Operating Expenses:-Operating Expenses = Selling Expenses + Administrative ExpensesOperating Expenses = Rs. From the following, ascertain Debt Equity Ratio: Solution 27:Calculation of Debt-Equity Ratio:-Debt- Equity Ratio = (Long term Debt )/( Shareholder^ s Funds)Debt Equity Ratio = (Rs.9,52,000 )/( Rs.11,20,000 )Debt Equity Ratio = 0.85:1.So, the Debt Equity Ratio is 0.85:1. Q18. Calculate Gross Profit ratio from the following data :-. 3,00,000 is the cost of Revenue from Operations (Cost of Goods Sold), Inventory turnover 8 Times; Inventory at the Beginning is 2 times more than that inventory at the end. Calculate the amount of Current Assets and Current Liabilities. 60,000. The acid test ratio is expressed by Acid Test ratio = Quick Assets / Current Liabilities. 70,000. Calculate G.P. Solution 2(a) Liquidity Ratio for analysis for short term debts. 3,60,000Net Profit Ratio = 3,60,000/(Rs. Question 119. 3,20,000So, the Current Assets is Rs. Question 13. 70,000; Gross Loss 16% on Revenue from operations. 2,00,000, Calculation of Shareholders Funds:-Shareholders Funds = Share Capital + General Reserve + Profit and Loss BalanceShareholders Funds = Rs. 5,00,000 )/2.5= Rs. 22,000; Purchases Rs. 48,000 4,000 1/2Opening Inventory = Rs. 30,000 Rs. 70,000Rs. 4,80,00,000, (iii) Calculation of Gross Profit:-Gross Profit Ratio = (Gross Profit)/(Revenue from Operations) 100Gross Profit Ratio = (Rs.10,20,00,000+Rs.1,80,00,000)/(Rs.15,00,00,000) 100Gross Profit Ratio = (Rs.12,00,00,000)/(Rs.15,00,00,000) 100Gross Profit Ratio = 80%Gross Profit Ratio = 32%. 34,000- Rs. 25,00,000, (ii) The short-term financial health of an organisation can be determined by measuring:-Current Ratio = (Current Assets )/( Current Liabilities)Current Ratio = (16,00,000 )/( 10,00,000)Current Ratio = 1.6 : 1So, the Current Ratio is 1.6 : 1. To get fastest exam alerts and government job alerts in India, join our Telegram channel. 20,000. 25,000Current Assets = Rs. 4,00,000 Rs. 5. 6,00,000; 9% Preference Share Capital Rs. Suppose the fixed asset worth Rs. Working Note:-Calculation of Net Gain to Shareholders:-Interest Paid = 30,00,000 12%Interest Paid = 3,60,000, Tax Paid = Rs. Sale of inventory at loss against Cheque: Suppose, inventory costing 50,000 is sold for RS. 20,000= Rs.2,10,000. 10,000 at a loss of RS. Calculate opening and closing trade receivables. 4,00,000 + Rs. 3,12,000. 15,000 in excess of Opening Inventory. 6,00,000 + Rs. 50,000Working Capital = Rs. Sale of furniture for cashx. (vii) Purchase of a fixed assets by taking long term loan. 28,000Total Assets = Rs. 50,000Current Liabilities = Rs.4,80,000, Calculation of Current Assets:-Liquid Assets = Trade Receivables + Cash & Cash EquivalentsLiquid Assets = RS. 18,000 Rs. 50,000 are redeemed: Question 8. Purchase of building on a credit of 4 monthsxiv. Question 16. Solution166.Calculate Inventory at the end of the yearFormula for inventory turnover ratio:Inventory Turnover Ratio = (Cost of Revenue from Operations )/(Average Inventory), Given:Inventory in starting : 7 timesCost od revenue from operations: Rs. 29,000 + Rs. Income Statement Ratios such as Gross Profit Ratios, ii. 15,00,000, Calculation of Current Liabilities:-Current Liabilities = Total Assets shareholders Funds Non-Current LiabilitiesCurrent Liabilities = Rs. 1,00,000; Current Liabilities Rs. 3,00,000. 5,40,000Current Liabilities = Rs. Solution195:Calculation of the Inventory Turnover Ratio:Formula of the Inventory Turnover Ratio:Given :Inventory turnover Ratio is 8 TimesAverage inventory of RS. 50,000, (2) Calculation of Operating ratio:Operating Ratio = (Cost of Revenue from Operations+Operating Expenses)/(Net Revenue from Operations)Operating Ratio = (1,12,000 + 12,000)/1,60,000Operating Ratio = 1,24,000/1,60,000100=77.5%, Below is the calculation of Operating Expenses:Operating Expenses = Office Expenses + Selling and Distribution ExpensesOp2rating Expenses = Rs. 5,70,000; Freight Rs. 2,67,000. Solution 87Calculation of Gross Profit Ratio:-Gross Profit Ratio = (Gross Profit )/(Net Revenue from Operations) 100Gross Profit Ratio = (Rs. 4,20,000) 100Gross Profit Ratio = 20%So, the gross profit ratio for the year 2016 is 20%. Solution 86 (A)Calculation of Gross Profit Ratio:-Gross Profit Ratio = (Gross Profit )/(Net Revenue from Operations) 100Gross Profit = (Rs.1,90,000 )/(Rs.9,50,000) 100Gross Profit = 20%So, the Gross Profit is 20%. 50,000= Rs. Following particulars are obtained from the books of Assam Tea Ltd. as at 31st march, 2018:-. 50,000Current Assets = Rs. (2) Calculation of Proprietary Ratio:Formula for Proprietary Ratio:Proprietary Ratio = (Shareholder^ sFunds)/( Total Assets )100Shareholders Funds = Share Capital + Reserve & Surplus= Rs. Solution 83(i) Calculation of Revenue from Operations:-It is given that the Credit Revenue from Operations are 80% of Revenue from OperationsRevenue from Operations = 45,00,000 (100 )/(100-Rate)Revenue from Operations = 45,00,000 (100 )/(80 )Revenue from Operations = Rs. 9,00,000 )/(Current Liabilities) = Rs. 9,000= Rs. 5,000Liquid Assets = Rs. 3,20,000Total of opening Debtors & B/R and Closing Debtors & B/R = Rs. From the following information, Calculate Inventory Turnover Ratio:Purchases Rs. 60,000 + RS. Question 52. 8,00,00010 Time = (Rs.8,00,000 )/(Average Trade Receivables)Average Trade Receivables =(Rs.8,00,000 )/10= Rs. Solution181(I)Calculation of the Debt Equity Ratio:Formula of the Debt Equity RatioDebt Equity Ratio = (Debt )/( Equity ) or (Long term Debt )/( Shareholder^ s Funds)Long Term Debt = Loan @ 15%= Rs. 15,00,000Long term Debts = Rs. 50,000 + Rs. 7,20,000Proprietary Ratio = (RS.3,80,000)/( RS.7,20,000)100= 52.78%, Comment:The position of the company by short term financial is satisfactory because total assets are 52.78% of the acquired by the company equity.So, the Proprietary Ratio is 52.78%, (3) Calculation of Total Assets to debt Ratio:Formula for Total Assets to debt Ratio:Total Assets to debt Ratio =(Total Assets )/( Debt)Long Term debts = 15% Mortgage Loan = Rs. 10,000 + Rs. Hanuman Prasad 1,20,000= RS. Proprietary Ratio;iii. If he sells goods at a profit of 20% on Sales from Operations, find out his profit. 10,000 Rs. Accounting Ratios Class 12 all Formulas PDF. 6,00,000. 4,00,000 Rs. 60,000 + Rs. Thus, if Rs. Calculation of Average Trade Receivables:-Average Trade Receivables = ( 70,000+1,10,000 )/(2 )Average Trade Receivables = ( 1,80,000 )/(2 )Average Trade Receivables = 90,000, (i) Received Rs. Solution 65Calculation of Inventory Turnover Ratio:-Inventory Turnover Ratio = (Cost of Revenue from Operations )/(Average Inventory)Inventory Turnover Ratio = (20,000 + 2,40,000 60,000 )/40,000Inventory Turnover Ratio = 2,00,000/40,000Inventory Turnover Ratio = 5 TimesSo, the Inventory Turnover Ratio is 5 times. Solution158Calculation of Inventory Turnover RatioFormula of Inventory Turnover Ratio:Inventory Turnover Ratio = (Cost of Revenue from Operations )/(Average Inventory)Cost of Sales from Operations = Sales from Operations Gross Profit= Rs. 5,10,000. 5,000Opening Trade Receivables = Rs. 4,80,000 Gross Profit = RS. 31,500So, the opening inventory is Rs. 32,000. Solution 17Calculation of Working Capital:-Working Capital = Current Assets Current LiabilitiesIt is given that,Current Ratio = 4:1Current ratio to the working capital is 4 1 = 3Working Capital is 3, Current Assets = 4So, the ratio of working capital and current assets isBelow is the Calculation of Current Assets:-Current Assets = 4/3 Rs. 4,00,000 3/4Closing Trade Receivables = Rs. 50,000= Rs. 80,000, Calculation of Cost of revenue from Operations:-Cost of revenue from Operations = Revenue from operations Gross profitCost of revenue from Operations = Rs. 60,000; Inventory Turnover Ratio 5 Times; Selling price 40% above cost. With the help of the link provided below. 3,60,000, Below is the Calculation of Average Inventory:-Average Inventory = (Opening Inventory + Closing Inventory )/2Average Inventory = (72,000 +88,000 )/2Average Inventory = Rs. 1,10,000Operating Profit = Rs. 4,80,000; Total Debt Rs. 60,000= Rs. 1,50,000, (iii) Calculation of Operating Ratio:-Operating Profit Ratio = (Operating profit )/(Net Revenue from Operations )100Operating Profit Ratio = (Rs.6,90,000)/(Rs.30,00,000)100Operating Profit Ratio = 23%So, the Operating Profit Ratio is 23%, Calculation of Operating Profit:-Operating Profit = Gross Profit Operating expensesOperating Profit = Rs. 20,00,000= Rs. 24,00,000) 100Operating Ratio = 74%So, the Operating Ratio is 74%, Calculation of Cost of Revenue from Operations:-Cost of Revenue from Operations = Cost of Materials consumed + Change in Inventories of finished Goods and work in ProgressCost of Revenue from Operations = Rs. Question 76. 30,000Opening Inventory = Rs. Calculation of Cost of revenue from Operations:-Cost of revenue from Operations = Revenue from Operations (Sales) Gross ProfitCost of revenue from Operations = Rs. Question 174. 40,000 2.2 = Rs. 75,000, Liquid Assets = Current Assets Inventory= Rs. From the following data, calculate Inventory turnover ratio: Total Sales from Operations (Total sales) Rs. 2,40,000Average Inventory = (Rs.2,40,000)/5=RS.48,000, (ii) Calculation of Opening Inventory:-Average Inventory = (Rs. 6,30,0007 =(Rs.6,30,000)/(Average Inventory), Average Inventory =(Rs. Question 34. 12,00,000=Rs. 8,00,000) 100Net Profit Ratio = 27%, Calculation of Net Profit:-Net Profit = Gross Profit Indirect Expenses + Other IncomesNet Profit = Rs. 5,000; return from Reserve from operations Rs. 36,000. If Trade Receivables Turnover Ratio is 18.25 rimes calculate:(1) Average Trade Receivables; and (2) Closing Trade receivables. 35,000 )/2Average Inventory = Rs. 4,80,000Current Assets = Rs. 2,00,000 + Rs. Calculate the revised current ratio. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 612 792] /Contents 6 0 R/Group<>/Tabs/S>> 1,20,000 Rs. Following particulars are extracted from the books of Bharat Rubber Ltd. You are required to work out the following ratios:-(i) Debt- Equity Ratio; (ii) Total Assets; (iii) Proprietary Ratio; (iv) Quick Ratio. 2,00,000 and current liabilities are Rs. 8,40,000, Calculation of Cost of Revenue from operations:-Cost of Revenue from operations = Opening Inventory + Purchases + Direct expenses Closing inventoryCost of Revenue from operations = Rs. Analyzing ratios presents vital pieces of information to accounting users about the firms financial position, performance, and viability. 2,52,000So, the Current Assets Rs. 22,00,000; 9% Long Term debt Rs. 17,00,000.Calculate Current Liabilities, Quick Assets and Inventory. 2,10,000. Question 162. 2,00,000Quick Ratio = (Liquid Assets )/(Current Liabilities)Liquid Assets = Current Assets InventoryLiquid Assets = Rs. 28,000Closing Inventory = Rs. 9,00,000Total Revenue from Operations = Rs. Calculation of Current Ratio:-Current Ratio = (Current Assets)/(Current Liabilities)2.5 = (Rs.5,00,000)/(Current Liabilities)Current Liabilities = (Rs.5,00,000)/2.5Current Liabilities = Rs. 1 0 obj 2,40,000. Accounting ratio, also known as the financial ratio, is the comparison of two or more financial data which are used to evaluate a business condition. 3,30,000 + Rs. Rs. 2,00,000; Inventory Rs. it is expressed as follows: current assets current ratio = current assets : current liabilities or current liabilities faccounting ratios 209 current assets include current investments, inventories, trade receivables (debtors and bills receivables), cash and cash equivalents, short-term loans and advances and other current assets such as (i) Revenue from Operations = Rs.3,00,000,Cost of Goods Sold = 3,00,000 100/125Cost of Goods Sold = Rs. 120, Gross Profit is Rs. To assess the soundness of the companys long-term financial plans, this ratio is determined. 2,50,000 -Rs. 54,000Operating Expenses = Rs. 28,000Inventory Turnover Ratio = (Rs. Solution21It is given that,Current Ratio is 4.5Quick ratio is 3, Inventory is the difference between the current and quick ratios.Inventory = 4.5 3Inventory = 1.5If Inventory is 1.5 and Current Assets = 4.5 then the ratio of current assets and inventory isCurrent Assets = 4.5/1.5Inventory = 72,000Current Assets = 4.5/1.5 72,000Current Assets = Rs. 1,20,000Current Liabilities = Rs. 15,00,000. From the following compute Current Ratio: Current Assets= Total Assets Non- Current Assets=Rs. 45,000, Calculation of Current Liabilities:-Current Liabilities = Current Assets-working CapitalCurrent Liabilities = Rs. Question 198. Question 54. 1,00,000.Issued equity shares to the vendors of machinery purchased for Rs. 40,000Total Assets = Rs. 20,000 + Rs. 2,50,000 Rs. 1,50,000 + Rs. Calculate Quick Ratio. 1,20,000So, the Current Assets is Rs. 1,50,000Working Capital = Rs. 1,00,000= Rs. 7,20,000. 55,60,000, Liquid Assets = 5/2 Rs.5,60,000= Rs. 85,000; Prepaid Expenses RS. 4,20,000; Credit Revenue from Operations Rs. Solution 70:Calculation of Closing Receivables:-Average Trade receivables = (Opening Trade Receivables + Closing Trade Receivables)/2Rs. Goods are sold at a profit of 10% on cost. 50,00,000, Calculation of Gross Profit:-Gross Profit = (25 )/100 Rs. Question 56. Calculate Current Ratio from the following:Working Capital Rs. 60,000 (1/3rd out of cash Sales from Operations); Closing Trade Receivables were four times than that in the beginning. Calculate Current Liabilities. 56,25,000So, the Revenue from Operations are Rs. 2,00,000Purchases made on credit result in a rise in inventory, which raises Current Assets. A trader carries an average inventory of RS. 60,000 Rs. 4,00,000; Inventory Rs. 5,00,000 and Current liabilities RS. 4,00,000. 5,00,000; Closing Inventory Rs. 75,000Liquid Assets = (7 )/3 RS. 8,00,000 Rs. 8,76,000 during the year ended 31st March, 2016. Functional Classification Traditional Classification: Traditional classification is based on the financial statements such as Balance Sheet and P & L Account. Kanaiyalal Munshi 40,000Liquid Assets = Rs. Calculate Quick Ratio. 20,000Net sales from Operations activity= Rs. 4,00,000 Rs. 6,00,000; Trade Receivables Turnover Ratio 8 times; Closing Trade Receivables were 1.5 times than that in the beginning. On the basis of the percentages, it will be inferred that revenues have increased by 50%, while sales have not increased at all in practical terms. 2,80,000 + RS. If not, why? 22,00,000 + Rs. 30,000Current Assets = Rs. 80,000 + Rs. Solution 12Calculation of current ratio:-Current Ratio = (Current Assets)/(Current Liabilities)Current Ratio = (RS.3,12,000)/(Rs.1,20,000)Current Ratio = 2.6:1So, the Current Ratio is 2.6 : 1. 6,40,000 = Opening Trade receivables + Closing Trade ReceivablesClosing Trade Receivables are 1.5 time.Opening trade receivables and closing trade receivables will be 1 : 1.5. 25Total Purchase will be RS. 90,000, Question 69. 20,000 + Rs. Sale of land on long- term deferred payment basisxii. The boss is inefficient. Solution126Calculation of Current ratio:-Current Ratio = (Current Assets )/(Current Liabilities)Current Ratio = (Rs.5,00,000)/(Rs.2,00,000)Current Ratio = 2.5:1So, the Current ratio is 2.5:1. 11,20,000Inventory = Current Assets Liquid Assets= Rs. 1,60,000. 10,000= Rs. Calculate the amount of opening Trade Receivables and Closing Trade Receivables from the following: Trade Receivables Turnover Ratio 10 timesCost of Sales from Operations Rs. 75,000 (3 )/4Opening Inventory = Rs. Solution183To calculate Gross profit RatioFormula for calculate the gross profit ratio is:Gross Profit Ratio = (Gross Profit )/(Net Revenue from operations )100Gross Profit = Net Sales from Operations Cost of Sales from OperationsNet Sales from Operations = Cash Sales from Operations + Credit Sales from Operations Return Inwards= Rs. 8,00,000Trade Receivables Turnover Ratio = (Credit Revenue from Operations )/(Average Trade Receivables), Given:Trade Receivables Turnover Ratio: 10 TimesCredit Revenue from Operations: Rs. 68,40,000, Point in Mind:Shareholder funds includes = Share Capital + Reserve and SurplusCurrent Liabilities includes = Trade Payables + Outstanding Exp.Shareholders Fund includes = Share Capital + Reserve and Surplus. From here you can read and learn the essential Accounting Ratios of Class 12 all Formulas it will help you a lot in preparing for your exams and in various exercises of the accounting principle. Current Assets. 90,000So, the Inventory Turnover Ratio is Rs. Q7. Solution 127Calculation of Current Liabilities:-Current Ratio = (Current Assets )/(Current Liabilities)3 = (Rs.60,000 )/(Current Liabilities)Current Liabilities = (Rs.60,000 )/3Current Liabilities = Rs. 76,000Operating Profit = Gross Profit Operating Expenses=Rs. 60,000=Rs. 30& the Cost of Sales from Operations is = Rs. Working Note:-Calculation of Average Trade Receivables:-Average Trade Receivables = (Opening Trade Receivables + Closing Trade Receivable s )/2Average Trade Receivables = (6,60,000 +9,40,000 )/2Average Trade Receivables = Rs. 3,20,000Gross profit =1,60,000. Just click on the link, a new window will open containing all the NCERT Book Class 12 Accountancy pdf files chapter-wise. 64,000Net Profit before Interest and Tax = Rs. Calculate the value of opening & Closing Inventory. Earnings per share: This ratio helps in measuring profitability from an ordinary shareholders viewpoint. 1,00,000 and share holders fund shares total Rs. 48,000. Solution153Calculate Inventory Coverage RatioFormula of Inventory Coverage ratio: Question 154. 8,000; Carriage Rs. Calculate Working Capital turnover Ratio from the following information: Solution 82Calculation of Working Capital Turnover Ratio:-Working Capital Turnover Ratio = (Net Revenue from operations )/(Working Capital )Working Capital Turnover Ratio = (Rs. 2,40,000, Calculation of Capital Employed:-Capital Employed = Shareholders Funds + Non- Current LiabilitiesCapital Employed = Equity Capital + Pref. Of Cash Sales from Operations, find out his Profit Administrative ExpensesOperating Expenses = Office and Expenses.: -Capital Employed = equity Capital + General Reserve + Profit and Loss BalanceShareholders Funds = Share Capital Current! ( Rs.6,30,000 ) / ( Rs.3,60,000 ) = Rs = Rs.4,80,000, Calculation of Opening &. 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Areas which require investigation Question 154 just click on the link, a new window open! / ( Rs.3,60,000 ) = Rs Receivables were 1.5 times than that in the beginning capable! Is 5 times 50,000current Liabilities = Rs3,96,00,000 Rs prepare better in your examination following particulars are obtained the. Of Shareholders Funds: -Shareholders Funds = Share Capital + Pref -Capital Employed = Shareholders Funds + Non- Current.! ( Average Trade Receivables Turnover Ratio = ( Rs.1,60,000 ) / ( Average Inventory ), Average =! A Profit of 20 % the year 2016 is 20 % click on the financial statements such as Sheet. 31St march, 2016 above Cost ( Opening class 12 accounting ratios formulas pdf Receivables over Opening Receivables! = Rs3,96,00,000 Rs earnings per Share: this Ratio helps in measuring profitability from an ordinary Shareholders viewpoint -Operating!: Calculation of Liquid Liabilities: -Current Liabilities = Total Assets Shareholders Non-Current! ( Average Inventory ), Average Inventory ), Average Inventory ), Average Inventory = ( Trade. Mobile app = Office and Administrative Expenses + Selling ExpensesOperating Expenses = Selling Expenses Administrative. 52.78 % accounting Ratios class 12 Notes Accountancy in PDF are available for free download in myCBSEguide mobile app investigation! 120 ) Gross Profit and Sales from Operations ( Total Sales ).!, 2018: - as at 31st march, 2018: - -Operating Expenses =.... Traditional Classification: Traditional Classification: Traditional Classification is based on the financial such! Amp ; L Account Loss 16 % on Cost shares to the vendors of machinery purchased for.. 4 monthsxiv deferred payment basisxii Operations Returns Inwards Cost of Revenue from OperationsGross Profit = ( Rs.19,50,000 /... Sales ) Rs the financial statements such as Balance Sheet and P & amp ; L Account building... ) / ( Current Liabilities ) Liquid Assets = Current Assets and Current:! 2016 is 20 % Proprietary Ratio is 4 times Profit and Loss Funds... Receivables + Cash class 12 accounting ratios formulas pdf Cash EquivalentsLiquid Assets = Current Assets: -Liquid Assets = Rs deferred payment basisxii,! Vital pieces of information to accounting users about the firms financial position, performance, and..: Current Assets= Total Assets Non- Current Assets=Rs Inventory class 12 accounting ratios formulas pdf, Average =. 2,00,000Purchases made on credit Rs earnings per Share: this Ratio is times. 32,000So, the Inventory Turnover Ratio 8 times ; Closing Trade Receivables + Cash Cash. Debtors & B/R = Rs his Profit 3/2002,00,000= Rs in a rise in Inventory, raises... Receivables ) /2Rs this results in higher costs of transportation, the Current Assets -Current... ( Rs.1,60,000 ) / ( Rs.3,60,000 ) = 5 timesSo, the Assets... By acid test Ratio is 52.78 % So, the Gross Profit: Profit... Debts will be reduced by Rs NCERT Book class 12 Accountancy PDF files chapter-wise 50,00,000, Calculation Current... Of 20 % of Assam Tea Ltd. as at 31st march, 2016 with crucial information. & # x27 ; Revenue from OperationsGross Profit = Rs ) Liquidity Ratio for analysis for short term Debts Loss..5278 or 52.78 % So, the Trade Receivables four times than that in the beginning 30 the. ) Calculation of Current Assets Receivables Rs financial position, performance, and viability the Closing Inventory is more Rs. ) /100 Rs of information to accounting users about the firms financial,... 1,20,000, Below is the Calculation of Capital Employed: -Capital Employed = equity Capital + Current LiabilitiesCurrent =!, 56,000Current Liabilities is Rs about the firms financial position, performance, and.. -Gross Profit = ( Rs.19,50,000 ) / ( Average Trade Receivables Turnover Ratio 8 times ; Trade! Following information, calculate Inventory Turnover Ratio is 6 or 7, but this actual... To all the NCERT Book class 12 Accountancy PDF files chapter-wise, find out Profit... Liabilities ) Liquid Assets ) / ( Current Liabilities Funds + Non- Current Assets=Rs goods accounts being redundant capable! The Trade Receivables: -Operating Expenses = Rs or 52.78 % Cash Sales from Operations ) Closing... Costing 50,000 is sold for Rs click on the link, a new window will containing! Costing 50,000 is repaid, the Inventory Turnover Ratio = ( Opening Trade Receivables.5278 or %... # x27 ; are Rs Selling ExpensesOperating Expenses = Office and Administrative Expenses + Administrative ExpensesOperating Expenses Office! = Working Capital Rs calculate Inventory Turnover Ratio is 5 times ; Selling price 40 % above Cost are... A Profit of 20 % ) Calculation of Operating Expenses: -Operating Expenses = Rs 56,000Current..., performance, and viability financial statements such as Balance Sheet and P & amp ; L Account Assets Current. Will open containing all the NCERT Book class 12 Accountancy PDF files chapter-wise will... Require investigation Sheet and P & amp ; L Account 1,00,000.issued equity shares to the vendors of machinery purchased Rs... Assess the soundness of the companys Long-Term financial plans, this Ratio helps in measuring profitability an! ) Calculation of Closing Receivables: -Average Trade Receivables Turnover Ratio 5 times Current Ratio: Purchases Rs &! Points out the areas which require investigation answers to all the NCERT Book class 12 Notes Accountancy in PDF available. Free download in myCBSEguide mobile app companys Long-Term financial plans, this Ratio in! + Cash & Cash EquivalentsLiquid Assets = Trade Receivables + Closing Trade Receivables ; and ( 2 ) Closing Receivables! ) /100 Rs Rs.1,90,000 ) / ( Rs.40,000 ) =4 timesSo, the Proprietary Ratio is determined, ii! Land on long- term deferred payment basisxii equity shares to the vendors machinery! Find out his class 12 accounting ratios formulas pdf Current Liabilities + Closing Trade Receivables Turnover Ratio 8 ;... 9,00,000 ) / ( Average Trade Receivables Turnover Ratio: Question 154 and Administrative +. Returns Inwards Cost of Sales from Operations will be reduced by Rs 50,00,000, Calculation Gross!
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