Accounting Ratios Accountancy - Accounting Ratios

Total Debt ₹ 60,00,000; Shareholders' Funds ₹ 10,00,000; Reserves and Surplus ₹ 2,50,000; Current Assets ₹ 25,00,000; Working Capital ₹ 5,00,000. Calculate Total Assets to Debt Ratio.
[Hint: Reserves and Surplus are already included in Shareholders' Funds.]

From the following information, calculate Debt to Equity Ratio:

	₹
10,000 Equity Shares of ₹ 10 each fully paid.	1,00,000
5,000; 9% Preference Shares of 10 each fully paid.	50,000
General Reserve.	45,000
Surplus, i.e., Balance in Statement of Profit and Loss.	20,000
10% Debentures.	75,000
Current Liabilities.	50,000

From the following details, calculate Inventory Turnover Ratio:

	₹
Cost of Revenue from Operations (Cost of Goods Sold).	4,50,000
Inventory in the beginning of the year.	1,25,000
Inventory at the close of the year.	1,75,000

Current Ratio 4; Liquid Ratio 2.5; Inventory ₹ 6,00,000. Calculate Current Liabilities, Current Assets and Liquid Assets.

State giving reasons, which of the following transactions would improve, reduce or not change the Current Ratio, if Current Ratio of a company is 0.8 : 1:

1. Cash paid to Trade Payables.
2. Purchase of Stock-in-Trade on credit.
3. Purchase of Stock-in-Trade for cash.
4. Payment of Dividend payable.
5. Bills Payable discharged.
6. Bills Receivable endorsed to a creditor.
7. Bills Receivable endorsed to a creditor dishonoured.

From the following information, calculate Gross Profit Ratio:

	₹		₹
Credit Sales	5,00,000	Decrease in Inventory	10,000
Purchases	3,00,000	Returns Outward Wages	10,000
Carriage Inwards	10,000	Rate of Credit Sale to Cash Sale.	4 : 1

Calculate Return on Investment (ROI) from the following details: Net Profit after Tax ₹ 6,50,000; Rate of Income Tax 50%; 10% Debentures of ₹ 100 each ₹ 10,00,000; Fixed Assets at cost ₹ 22,50,000; Accumulated Depreciation on Fixed Assets up to date ₹ 2,50,000; Current Assets ₹ 12.00,000: Current Liabilities ₹ 4,00,000.

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 for ₹ 2,000
2. Insurance premium paid in advance ₹ 500
3. Sale of goods on credit ₹ 3,000
4. Honoured a bills payable of ₹ 5,000 on maturity.

From the following calculate:

1. Current Ratio.
2. Quick Ratio.

	₹		₹
Total Debt.	6,00,000	Long-term Borrowings.	2,00,000
Total Assets.	8,00,000	Long-term Provisions.	2,00,000
Fixed Assets (Tangible).	3,00,000	Inventories	95,000
Non-current Investment.	50,000	Prepaid Expenses.	5,000
Long-term Loans and Advances.	50,000

Calculate Trade Receivables Turnover Ratio in the following:
Case: Cost of Revenue from Operations or Cost of Goods Sold ₹ 4,50,000; Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales, Opening Trade Receivables ₹ 90,000; Closing Trade Receivables ₹ 60,000.

Balance Sheet had the following amounts as at 31st March, 2018:

	₹
10% Preference Share Capital.	5,00,000
Equity Share Capital.	15,00,000
Securities Premium Reserve.	1,00,000
Reserves and Surplus.	4,00,000
Long-term Loan from IDBI @ 9%.	30,00,000
Current Asset.	12,00,000
Current Liabilities.	8,00,000
(Investments in other companies).	2,00,000
Fixed Assets-Cost.	60,00,000
Depreciation Written off.	14,00,000

Calculate ratios indicating the Long-term and the Short-term financial position of the company.

Calculate Trade Payables Turnover Ratio and Average Debt Payment Period from the following information:

	1st April, 2017 ₹	31st March, 2018 ₹
Sundry Creditors	1,50,000	4,50,000
Bills Payable	50,000	1,50,000

Total Purchases ₹ 21,00,000 Purchases Return ₹ 1,00,000; Cash Purchases ₹ 4,00,000.

Following is the Balance Sheet of Crescent Chemical Works Limited as at 31st March, 2018:

Compute Current Ratio And Liquid Ratio.

Quick Ratio of a company is 2 : 1. State giving reasons, which of the following transactions would (i) Improve, (ii) Reduce, (iii) Not change the Quick Ratio:

1. Purchase of goods for cash
2. Purchase of goods on credit
3. Sale of goods (costing ₹ 10,000) for ₹ 10,000
4. Sale of goods (costing ₹ 10,000) for ₹ 11,000
5. Cash received from Trade Receivables.