KUNAL SIR: +91 9953 23 2916

AKSHAY SIR: +91 7838 94 9575

TOPPERS POINT ACUMEN ACADEMY

ASSIGNMENT---ACCOUNTING RATIOS

(I) LIQUIDITY RATIOS: -

SHORT-TERM FINANCIAL POSITION OF A

COMPANY.
Q1) From the following infor v chngvb bg vh vmation, calculate Current Ratio and Liquid Ratio:

Creditors Rs 20,000 Bills payable Rs 15,000 Debtors Rs 1,55,000

Current investment Rs 5,000 Outstanding expenses Rs 9,000 Stock Rs 45,000

Provision for tax Rs 6,000 Prepaid expenses Rs 5,000 Cash Rs 40,000

(current ratio 5:1, liquid ratio 4:1)

Q2) Calculate Current and Quick Ratio, if Current Assets are Rs 4,00,000, Stock is Rs 20,000, Prepaid
expenses are Rs 1,80,000 and Working Capital is Rs 2,40,000. (2.5:1 , 1.25:1)

Q3) Current Liabilities Rs 60,000, Working Capital is Rs 2,40,000. Calculate Current Ratio. (5:1)

Q4) Total Assets Rs 1,50,000, non Current Assets Rs 1,10,000, Working Capital Rs 30,000. Calculate
Current Ratio. (4:1)

Q5) The Ratio of Current Assets (Rs 2,00,000) to Current Liabilities (Rs 1,00,000) is 2:1. The company is
interested in maintaining the Current Ratio of 3:1 by paying off some Current Liabilities. You are
required to suggest him the amount of Current Liabilities to be paid. (Rs 50,000)

Q6) The Ratio of Current Assets (Rs 5,00,000) to Current Liabilities (Rs 2,50,000) is 2:1. The company is
interested in maintaining the Ratio of 1.5:1 by acquiring some Current Assets on credit. You are required
to suggest him the amount of Current Assets to be acquired. (Rs 2,50,000)

Q7) A firm had a Current Assets of Rs 75,000. It then paid a Current liability of Rs 15,000. After this
payment, the Current Ratio was 2:1. Calculate the amount of Current Liabilities before and after the
payment was made. (Rs 45,000 & Rs 30,000)

Q8) Calculate the amount of Current Assets, Current Liabilities & Liquid Assets from the following:

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(i) Current Ratio 2.5, Liquid Ratio 1.5 and Stock Rs 25,000. (62,500, 25,000,37,500)
(ii) Current Ratio 3.5, Liquid Ratio 1.5 and Stock Rs 60,000. (1,05,000 , 30,000 , 45,000)
(iii) Current Ratio 4, Liquid Ratio 3 and Stock Rs 50,000. (2,00,000 , 50,000 , 1,50,000)
(iv) Current Ratio 1.5, Quick Ratio 0.5 and Stock Rs 1,00,000. (1,50,000 , 1,00,000 , 50,000)
(v) Current Ratio 2.5, Quick Ratio 2 and Stock Rs 60,000. (3,00,000 , 1,20,000 , 2,40,000)
(vi) Current Ratio 4, Quick Ratio 3 and Stock Rs 80,000. (3,20,000 , 80,000 , 2,40,000)

Q9) Calculate the amount of Current Assets, Liquid Assets and Stock if :

(i) Current Ratio 2.5, Liquid Ratio 1.5 and Current Liabilities Rs 60,000.
(1,50,000 , 90,000 , 60,000)
(ii) Current Ratio 3.5, Liquid Ratio 2 and Current Liabilities Rs 90,000.
(3,15,000 , 1,80,000 , 1,35,000)
(iii) Current Ratio 4, Liquid Ratio 1.5 and Current Liabilities Rs 50,000.
(2,00,000 , 75,000 , 1,25,000)
(iv) Current Ratio 2, Liquid Ratio 1.5 and Current Liabilities Rs 60,000.
(1,20,000 , 90,000 , 30,000)
(v) Current Ratio 5, Liquid Ratio 1.5 and Current Liabilities Rs 40,000.
(2,00,000 , 60,000 , 1,40,000)
(vi) Current Ratio 3, Liquid Ratio 1.5 and Current Liabilities Rs 60,000.
(1,80,000 , 90,000 , 90,000)

Q10) Calculate the amount of Current Assets and Current Liabilities if:

(i) Current Ratio is 3 and Working Capital is Rs 20,000. (30,000 , 10,000)

(ii) Current Ratio is 2.5 and Working Capital is Rs 15,000. (25,000 , 10,000)
(iii) Current Ratio is 3.5 and Working Capital is Rs 50,000. (70,000 , 20,000)
(iv) Current Ratio is 4 and Working Capital is Rs 36,000. (48,000 , 12,000)
(v) Current Ratio is 2 and Working Capital is Rs 40,000. (80,000 , 40,000)
(vi) Current Ratio is 2.5 and Working Capital is Rs 45,000. (75,000 , 30,000)

Q11) Calculate the Liquid Ratio from the information given below:

(i) Current Ratio is 5, Current Liabilities Rs 60,000 and Stock is Rs 30,000. (4.5:1)
(ii) Current Ratio is 4, Current Liabilities Rs 50,000 and Stock is Rs 30,000. (3.4:1)
(iii) Current Ratio is 3, Current Liabilities Rs 80,000 and Stock is Rs 20,000. (2.75:1)
(iv) Current Ratio is 2.5, Working Capital is Rs 60,000 and Stock is Rs 20,000. (2:1)
(v) Current Ratio is 4, Working Capital is Rs 30,000 and Stock is Rs 15,000. (2.5:1)
(vi) Current Ratio is 3.5, Working Capital is Rs 50,000 and Stock is Rs 10,000. (3:1)

Q12) The Quick Ratio of a company is 2:1. State giving reasons, which of the following will improve,
decline or not change the Ratio:

(i) Purchase of goods for Cash

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(ii) Purchase of Stock on credit
(iii) Payment to creditors
(iv) Receipt from debtors
(v) Sale of Stock costing Rs 50,000 at a profit of 10%
(vi) Sale of Stock at a loss of 5% on credit
(vii) Drawing a bill upon debtors
(viii) Payment of tax
(ix) Payment of dividend
(x) Bank overdraft settled
(xi) Dividend received on investments
(xii) Sale of fixed Assets at loss
(xiii) Prepaid salaries
(xiv) Wages due but not paid
(xv) Current Liabilities paid.

Q13) The Current Ratio of a company is 2:1. State giving reasons, which of the following will improve,
decline or not change the Ratio:

(i) Purchase of goods for Cash

(ii) Purchase of Stock on credit
(iii) Payment to creditors
(iv) Receipt from debtors
(v) Sale of Stock costing Rs 50,000 at a profit of 10%
(vi) Sale of Stock at a loss of 5% on credit
(vii) Drawing a bill upon debtors
(viii) Payment of tax
(ix) Payment of dividend
(x) Bank overdraft settled
(xi) Dividend received on investments
(xii) Sale of fixed Assets at loss
(xiii) Prepaid salaries
(xiv) Wages due but not paid
(xv) Current Liabilities paid.

(II) SOLVENCY RATIOS:-

LONG-TERM FINANCIAL POSITION OF A

COMPANY.
Q1) Calculate debt-Equity Ratio in the following cases:

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(i) Equity share Capital Rs 15,000 Preference share Capital Rs 10,000
Reserves Rs 10,000 Debentures Rs 23,000 Preliminiary exp Rs 10,000
Loan from bank Rs 15,000 Mortgage Loan Rs 5,000. (1.72)
(ii) Share Capital Rs 1,50,000 Accumulated profits Rs 1,50,000
Underwriting commission Rs 50,000 Loans Rs 5,00,000. (2:1)
(iii) Equity Shareholder’s Fund Rs 3,60,000 Reserves and Surplus Rs 3,60,000
Preliminiary expenses Rs 1,20,000 Preference share Capital Rs 1,20,000
Long term Debts Rs 7,20,000 Current Liabilities Rs 1,20,000. (1.5)
(iv) Total Debts Rs 60,000 Current Liabilities Rs 20,000 Shareholder’s Fund Rs 20,000.
(2:1)
(v) Total Debts Rs 1,40,000Current Liabilities Rs 40,000 Equity Rs 40,000. (2.5:1)
(vi) Equity share Capital Rs 50,000 Reserves Rs 30,000 Debentures Rs 50,000
Equity Shareholder’s Fund Rs 1,00,000 Preference share Capital Rs 50,000 Current
Liabilities Rs 60,000 Total Debts Rs 3,10,000. (1.67:1)
(vii) Total debt Rs 5,00,000 Total Assets Rs 12,00,000 Working Capital Rs 1,50,000
Non Current Assets Rs 8,00,000 Capital employed Rs 9,50,000. (0.36:1)
(viii) Total Debts Rs 3,60,000 Current Liabilities Rs 1,80,000
Capital employed Rs 4,50,000. (0.67:1)
(ix) Capital employed Rs 6,00,000 Shareholder’s Fund Rs 4,00,000. (0.5:1)
(x) Non Current Assets Rs 5,00,000 Working Capital Rs 3,00,000 Total Liabilities Rs
9,00,000 Total Debts Rs 6,00,000. (1.67:1)

Q2) Suppose a firm’s Debt-Equity Ratio is 3:1. Which of the following will improve, decline or not change
the Ratio?

(i) Loan taken from IDBI

(ii) Issue of Equity shares
(iii) Redemption of debentures
(iv) Conversion of debentures into preference shares
(v) Conversion of Equity shares into debentures
(vi) Conversion of Equity shares into preference shares
(vii) Purchase of a fixed asset in cash
(viii) Purchase of a fixed asset against debentures issued.

Q3) Calculate Total Assets-Debt Ratio from the information given below:

(i) Total Assets Rs 4,20,000 Total Debts Rs 3,60,000 Current Liabilities Rs

1,20,000. (1.75)
(ii) Total Debts Rs 1,20,000 Current Liabilities Rs 40,000 Capital Employed Rs
1,60,000. (2.5)
(iii) Total Liabilities Rs 4,20,000 Capital Employed Rs 3,00,000 Total Debts Rs
3,60,000. (1.75)

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(iv) Total Debts Rs 12,00,000 shareholder’s fund Rs 6,00,000 Current
Liabilities Rs 4,00,000. (2.25)
(v) Non Current Assets Rs 3,90,000 non Current Liabilities Rs 2,00,000 Current Assets
Rs 2,10,000. (3)
(vi) Share Capital 3,20,000 Total Debts Rs 3,00,000Current Liabilities Rs 1,20,000. (3.44)
(vii) Shareholder’s fund Rs 9,50,000 long term borrowings Rs 5,00,000 Current
Liabilities Rs 4,00,000. (3.7)
(viii) Non Current Assets Rs 6,00,000 Equity Rs 4,00,000 Current Assets Rs
3,00,000 Current Liabilities Rs 2,00,000. (3)

Q4) Calculate Proprietory Ratio from the information given below:

(i) Total Assets Rs 4,20,000 Total Debts Rs 3,60,000 Current Liabilities Rs

1,20,000. (0.14)

(ii) Total Debts Rs 1,20,000 Current Liabilities Rs 40,000 Capital Employed Rs

1,60,000. (0.4)
(iii) Total Liabilities Rs 4,20,000 Capital Employed Rs 3,00,000 Total Debts Rs
3,60,000. (0.14)
(iv) Total Debts Rs 12,00,000 shareholder’s fund Rs 6,00,000 Current
Liabilities Rs 4,00,000. (0.33)
(v) Non Current Assets Rs 3,90,000 Non Current Liabilities Rs 2,00,000 Current
Assets Rs 2,10,000 (0.67)
(vi) Share Capital 3,20,000 Total Debts Rs 3,00,000 Current Liabilities Rs 1,20,000.
(0.52)
(vii) Shareholder’s fund Rs 9,50,000 long term borrowings Rs 5,00,000 Current
Liabilities Rs 4,00,000. (0.52)
(viii) Non Current Assets Rs 6,00,000 Equity Rs 4,00,000 Current Assets Rs
3,00,000 Current Liabilities Rs 2,00,000. (0.44)
(ix) Non Current Assets Rs 5,00,000 Working Capital Rs 3,00,000 Total Liabilities
Rs 9,00,000 Total Debts Rs 6,00,000. (0.33)
(x) Long term Debts Rs 3,60,000 Current Liabilities Rs 1,80,000 Capital Employed Rs
4,50,000. (0.14)

Q5) Calculate ICR in the following cases:

(i) Net Profit before Interest Rs 80,000 Interest on debts Rs 50,000. (1.6)
(ii) Net Profit after Tax Rs 60,000 Tax Rate 40% 10% Debentures Rs 8,00,000. (1.25)
(iii) Gross Profit 40% Operating Profit 20% Net Sales Rs 6,00,000
5% Debentures Rs 2,00,000. (12)

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(iv) Net Sales Rs 5,00,000 Gross Profit is 25% of cost loss on sale of Fixed
Assets Rs 5,000 dividend received Rs 8,000 depreciation charged on Fixed
Assets Rs 3,000 10% loan from bank Rs 5,00,000. (2)

(III) TURNOVER RATIOS:-

Measures the efficiency of business

operations.
Q1) Calculate the Stock Turnover Ratio in the following cases:

(i) COGS Rs 50,000 Average Stock Rs 10,000. (5 Times)

(ii) COGS Rs 60,000 Opening Stock Rs 20,000 Closing Stock Rs
10,000. (4 Times)
(iii) COGS Rs 2,00,000 Opening Stock Rs 30,000 Closing Stock Rs 70,000.
(4 Times)
(iv) Net Sales Rs 1,00,000 Gross Profit Rs 20,000 Opening Stock Rs 60,000 excess
of opening inventory over closing is Rs 40,000. (2 Times)
(v) Net Sales Rs 2,00,000 Gross Profit 20% Opening Stock Rs 30,000 excess
of Closing Stock over Opening Stock is Rs 20,000. ( 4 Times)
(vi) Net Sales Rs 6,00,000 Gross Profit is 25% of sales Opening Stock Rs 50,000
Closing Stock is 1.5 times than that in the beginning. (7.2 Times)
(vii) Net Sales Rs 5,00,000 Gross Profit Ratio is 20% Opening Stock Rs
40,000 Closing Stock is 2 times more than that in the beginning. ( 5 Times)
(viii) Net Sales Rs 100,000 Gross Profit is 25% of cost Opening Stock is 2 times more
than that in the closing Opening Stock Rs 30,000. ( 4 Times)
(ix) Net Purchases Rs 1,05,000 Direct Expenses Rs 40,000 Opening Stock Rs
40,000 Closing Stock Rs 50,000. ( 3 Times)
(x) Net Sales Rs 2,00,000 Net Purchases Rs 1,30,000 Gross Profit is 10%
Opening Stock Rs 50,000 Direct Expenses Rs 30,000. (4.5 Times)

Q2) Calculate the value of Opening inventory and Closing inventory in the following case:

(i) COGS Rs 60,000 ITR is 3 times Opening stock is Rs 20,000

more than the stock in the end. (Rs 30,000 & Rs 10,000)
(ii) COGS Rs 60,000 ITR is 3 times Closing stock is Rs 10,000 more
the stock in the beginning. (Rs 15,000 & Rs 25,000)

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(iii) COGS Rs 60,000 ITR is 3 times Closing stock is 3 times than
that in the beginning. (Rs 10,000 & Rs 30,000)
(iv) COGS Rs 60,000 ITR is 3 times Opening stock was 2 times
more than that in the Closing. (Rs 30,000 & Rs 10,000)
(v) Net Sales Rs 80,000 Gross Profit is Rs 20,000 Net Purchases Rs
40,000 Closing stock is Rs 20,000. ( Rs 40,000)
(vi) Net Sales Rs 1,20,000 Gross Profit is 1/3 of cost ITR is 3 times Total
Purchases Rs 65,000 Purchases return Rs 5,000 wages Rs 10,000.
( Rs 40,000 & Rs 20,000)

Q3) Calculate DTR in the following cases:

(i) Net Credit Sales Rs 60,000 Opening Trade Receivables Rs 35,000 Closing Trade
Receivables Rs 25,000. (2 Times)
(ii) Net Sales Rs 90,000 Sales return Rs 10,000 Closing Trade Receivables Rs
30,000 excess of Closing Trade Receivables over Opening is Rs 20,000. (4.5 Times)
(iii) Net Sales Rs 1,20,000 Opening Trade Receivables Rs 50,000 excess of
Closing Trade Receivables over Opening is Rs 20,000. (2 Times)
(iv) Net Credit Sales Rs 3,00,000 Opening Trade Receivables Rs 60,000 Closing
Trade Receivables are 2 times than that in the beginning. (3.33 Times)
(v) Net Credit Sales Rs 2,00,000 Opening Trade Receivables Rs 40,000 Closing Trade
Receivables are 1.5 times than that in the beginning. (4 Times)
(vi) Net Credit Sales Rs 1,50,000 Opening Trade Receivables Rs 10,000 Closing Trade
Receivables are 3 times more than that in the beginning. (6 Times)
(vii) Cash Sales are 20% of Total Sales Total Sales Rs 5,00,000
Average Debtors Rs 50,000. (8 Times)
(viii) Cash Sales Rs 2,00,000 Credit Sales are 60% of Total Sales Average Trade
Receivables Rs 60,000. (5 Times)
(ix) Cash Sales ( 25% of Total Sales) Rs 4,00,000 Average Debtors Rs 1,00,000.
(12 Times)
(x) Cash Sales (25% of Credit Sales) Rs 1,00,000 Average Debtors Rs 80,000. (5 Times)

Q4) Calculate CTR in the following cases:

(i) Net Credit Purchases Rs 60,000 Opening Trade Payables Rs 35,000 Closing Trade
Payables Rs 25,000. (2 Times)
(ii) Net Purchases Rs 90,000 Purchases return Rs 10,000 Closing Trade Payables
Rs 30,000 excess of Closing Trade Payables over Opening is Rs 20,000. (4.5Times)
(iii) Net Purchases Rs 1,20,000 Opening Trade Payables Rs 50,000 excess
of Closing Trade Payables over Opening is Rs 20,000. (2 Times)
(iv) Net Credit Purchases Rs 3,00,000 Opening Trade Payables Rs 60,000
Closing Trade Payables are 2 times than that in the beginning. (3.33 Times)

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(v) Net Credit Purchases Rs 2,00,000 Opening Trade Payables Rs 40,000 Closing
Trade Payables are 1.5 times than that in the beginning. (4 Times)
(vi) Net Credit Purchases Rs 1,50,000 Opening Trade Payables Rs 10,000 Closing
Trade Payables are 3 times more than that in the beginning. (6 Times)
(vii) Cash Purchases are 20% of Total Purchases Total Purchases Rs 5,00,000
Average Creditors Rs 50,000. (8 Times)
(viii) Cash Purchases Rs 2,00,000 Credit Purchases are 60% of Total Purchases
Average Trade Payables Rs 60,000. (5 Times)
(ix) Cash Purchases ( 25% of Total Purchases) Rs 4,00,000 Average Creditors Rs
1,00,000. (12 Times)
(x) Cash Purchases (25% of Credit Purchases) Rs 1,00,000 Average Creditors Rs 80,000.
(5 Times)

Q5) Calculate WCTR in the following cases:

(i) Net Sales Rs 4,00,000 Net Working capital Rs 1,00,000. (4 Times)

(ii) Total Sales Rs 80,000 Cash Sales Rs 30,000 Current ratio is 2:1 Current Assets
Rs 40,000. (4 Times)
(iii) COGS Rs 2,50,000 Gross Profit is 20% of cost Total Assets Rs 6,00,000
Current Ratio is 2:1 Non Current Assets Rs 5,00,000. (6 Times)
(iv) COGS Rs 3,00,000 Gross Profit is 20% of Sales Capital Employed Rs 6,00,000
Non Current Assets Rs 5,25,000. (5 Times)
(v) COGS Rs 4,00,000 Gross Profit is 20% Current ratio is 3:1 Total debts Rs
2,00,000 Capital Employed Rs 5,00,000 Total Assets Rs 5,50,000. (5 Times)

(IV) PROFITABILITY RATIOS:-

Represents Profitability position of a company.

Q1) Calculate Gross Profit Ratio in the following cases:

(i) Gross Profit Rs 50,000 Net Sales Rs 3,00,000. (16.67%)

(ii) Gross Profit Rs 90,000 Total Sales Rs 6,00,000 Sales return Rs 60,000.
(16.67%)
(iii) Gross Profit Rs 80,000 COGS Rs 5,60,000. (12.5%)
(iv) Gross Profit is 25% of cost COGS Rs 6,40,000. (20%)
(v) Gross Profit is 25% of cost Net Sales Rs 10,00,000. (20%)
(vi) Net Sales Rs 8,00,000 purchases Rs 5,50,000 decrease in inventory Rs 1,50,000.
(12.5%)
(vii) Total Sales Rs 10,00,000 Cash Sales 5% of Total Sales Net
Credit Sales Rs 7,50,000 STR is 5 times Opening inventory Rs 60,000
Closing inventory is 2 times more than that in the beginning. (25%)

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(viii) Operating Profit Rs 60,000 Operating Expenses Rs 20,000 Gross Profit is
25% of COGS. (20%)
(ix) Net Profit before Interest Rs 60,000 Selling Expenses Rs 50,000 loss on sale of
fixed assets Rs 30,000 depreciation Rs 50,000 Interest on investments
Rs 40,000 COGS is 80% of Sales. (20%)
(x) DTR is 4 times Average Debtors Rs 50,000 Cash Sales is 50% of
Credit Sales STR is 2 times Opening inventory Rs 1,60,000
Closing inventory is half of Opening inventory. (20%)

Q2) Calculate Net Profit Ratio in the following cases:

(i) Opening stock Rs 50,000 Net Sales Rs 20,00,000 Closing stock Rs

1,00,000 dividend received Rs 2,000 Profit on sale of fixed assets Rs
4,000 furniture lost by fire Rs 6,000 Tax Rate 50% purchases Rs 10,50,000
direct Expenses Rs 2,00,000 office Expenses Rs 2,00,000 Interest on debentures
Rs 1,20,000. (12%)
(ii) Cash Sales 25% of Net Sales Average trade receivables Rs 90,000 DTR is 5 times
Gross Profit is half of Sales Operating Expenses Rs 96,000 Tax Rate is 50%. (17%)
(iii) Cash Sales are 1/3 of Credit Sales Average trade receivables Rs 1,50,000 Gross
Profit is 2/3 of COGS Non Operating Incomes Rs 10,000 Operating Expenses Rs
70,000 Non Operating Expenses Rs 1,00,000 DTR is 4 times. (20%)
(iv) Net Sales Rs 1,00,000 Gross Profit Ratio 25% Operating Ratio 90% Non Operating
Expenses Rs 500 Non Operating Incomes Rs 5,500. (15%)
(v) Gross Profit Ratio 35% Cash Sales Rs 4,00,000 Credit Sales are 75% of
Total Sales Operating Expenses Rs 2,40,000 Non Operating
Expenses Rs 1,00,000 Non Operating Incomes Rs 90,000. (19.375)
(vi) Net Profit after dividend Rs 60,000 dividend proposed Rs 90,000 Tax Rate 50%
Average debt collection period is 13 weeks Average trade receivables Rs 50,000
Cash Sales being twice of Credit Sales. (25%)

Q3) Calculate the Operating Profit Ratio in the following cases:

(i) Opening stock Rs 50,000 Net Sales Rs 20,00,000 Closing stock Rs

1,00,000 dividend received Rs 2,000 Profit on sale of fixed assets Rs
4,000 furniture lost by fire Rs 6,000 Tax Rate 50% purchases Rs 10,50,000
direct Expenses Rs 2,00,000 office Expenses Rs 2,00,000 Interest on debentures
Rs 1,20,000. (30%)
(ii) Cash Sales 25% of Net Sales Average Trade Receivables Rs 90,000 DTR is 5 times
Gross Profit is half of Sales Operating Expenses Rs 96,000 Tax Rate is 50%. (34%)
(iii) Cash Sales are 1/3 of Credit Sales Average Trade Receivables Rs 1,50,000
Gross Profit is 2/3 of COGS Non Operating Incomes Rs 10,000 Operating

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Expenses Rs 70,000 Non Operating Expenses Rs 1,00,000 DTR is 4 times.
(31.25%)
(iv) Net Sales Rs 1,00,000 Gross Profit Ratio 25% Operating Ratio 90% Non Operating
Expenses Rs 500 Non Operating Incomes Rs 5,500. (10%)
(v) Gross Profit Ratio 35% Cash Sales Rs 4,00,000 Credit Sales are 75% of
Total Sales Operating Expenses Rs 2,40,000 Non Operating
Expenses Rs 1,00,000 Non Operating Incomes Rs 90,000. (20%)
(vi) Net Sales Rs 1,80,000 Operating cost Rs 1,53,000 COGS Rs 1,20,000.
(15%)
(vii) Net Sales Rs 4,00,000 Gross Profit 25% of cost Operating Expenses Rs 20,000.
(15%)
(viii) Operating cost Rs 5,40,000 Gross Profit Ratio 20% Operating Expenses Rs
60,000. (10%)
(ix) Sales Rs 2,00,000 COGS Rs 1,40,000 Operating Expenses Rs 15,000. (22.5%)
(x) Gross Profit Ratio is 20% Cash Sales Rs 1,50,000 Credit Sales are
80% of Total Sales Operating Expenses Rs 30,000. (16%)

Q4) Calculate the Operating Ratio in the following cases:

(i) Opening stock Rs 50,000 Net Sales Rs 20,00,000 Closing stock Rs

1,00,000 dividend received Rs 2,000 Profit on sale of fixed assets Rs
4,000 furniture lost by fire Rs 6,000 Tax Rate 50% purchases Rs 10,50,000
direct Expenses Rs 2,00,000 office Expenses Rs 2,00,000 Interest on debentures
Rs 1,20,000. (70%)
(ii) Cash Sales 25% of Net Sales Average trade receivables Rs 90,000 DTR is 5 times
Gross Profit is half of Sales Operating Expenses Rs 96,000 Tax Rate is 50%. (66%)
(iii) Cash Sales are 1/3 of Credit Sales Average trade receivables Rs 1,50,000 Gross
Profit is 2/3 of COGS Non Operating Incomes Rs 10,000 Operating Expenses Rs
70,000 Non Operating Expenses Rs 1,00,000 DTR is 4 times. (68.75%)
(iv) Net Sales Rs 1,00,000 Gross Profit Ratio 25% Operating Profit Ratio 10% Non
Operating Expenses Rs 500 Non Operating Incomes Rs 5,500. (90%)
(v) Gross Profit Ratio 35% Cash Sales Rs 4,00,000 Credit Sales are 75% of
Total Sales Operating Expenses Rs 2,40,000 Non Operating
Expenses Rs 1,00,000 Non Operating Incomes Rs 90,000. (80%)
(vi) Net Sales Rs 1,80,000 Operating cost Rs 1,53,000 COGS Rs 1,20,000.
(85%)
(vii) Net Sales Rs 4,00,000 Gross Profit 25% of cost Operating Expenses Rs 20,000.
(85%)
(viii) Operating cost Rs 5,40,000 Gross Profit Ratio 20% Operating Expenses Rs
60,000. (90%)
(ix) Sales Rs 2,00,000 COGS Rs 1,40,000 Operating Expenses Rs 15,000. (77.5%)

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(x) Gross Profit Ratio is 20% Cash Sales Rs 1,50,000 Credit Sales are
80% of Total Sales Operating Expenses Rs 30,000. (84%)

Q5) Calculate the ROI in the following cases:

(i) Net Profit before Interest Rs 1,00,000 Capital employed Rs 5,00,000. (20%)
(ii) Net Profit after Interest Rs 80,000 Shareholder’s fund Rs 4,00,000
10% Debentures Rs 1,00,000. (18%)
(iii) Net Profit after Tax Rs 2,00,000 Shareholder’s fund Rs 4,50,000
10% Debentures Rs 1,50,000 15% bank loan Rs 1,00,000 Tax Rate 20%
Reserves and Surplus Rs 50,000. (40%)
(iv) Net Profit after Tax Rs 1,44,000 Net Fixed Assets Rs 6,00,000 Current
Assets Rs 3,60,000 advertisement exp Rs 60,000 Tax Rate 50%
Share Capital Rs 1,50,000 Reserves Rs 1,80,000 15% Debentures Rs
4,80,000. ( 48%)
(v) Net Profit ratio 12% Tax Rate 50% Net Sales Rs 12,00,000
15% Debentures Rs 4,80,000 Share Capital Rs 1,50,000 Reserves and Surplus
Rs 1,20,000 underwriting commission Rs 30,000 securities premium Rs 30,000.
(50%)
(vi) Net Profit ratio (before Tax ) 24% Net Sales Rs 4,50,000 Tax Rate 60% Net
Fixed Assets Rs 2,25,000 Working Capital Rs 45,000 Total debts Rs
2,02,500 15 % Debentures Rs 1,80,000. (50%)
(vii) Sales Rs 25,00,000 Gross Profit 30% selling and distribution expenses Rs
2,00,000 office and administrative expenses Rs 1,00,000 Interest paid on
long term liabilities Rs 30,000 Tax Rate 30% Total Assets Rs
20,00,000 Total debts Rs 5,00,000 Long Term Borrowings Rs 1,50,000.
(27%)
(viii) Fixed Assets Rs 11,00,000 Depreciation accumulated Rs 1,00,000 Current
Assets Rs 6,50,000 Total debts Rs 7,50,000 10% Debentures Rs 5,00,000
Net Profit after Tax Rs 3,25,000 Tax Rate 50%. (50%)
(ix) Debt-Equity Ratio 2:1 Total Debts Rs 60,000 Non Current Assets Rs
2,00,000 Total Assets Rs 2,50,000 Working Capital Rs 30,000
Net Profit After Tax is 57,500 Tax Rate 50%. (50%)
(x) Equity Rs 6,00,000 Debt-Total Fund Ratio is 40% Interest paid on
Debentures Rs 80,000 Net Profit after dividend Rs 30,000 Dividend
proposed Rs 20,000 Provision for Tax 50%. (18%)

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