#### Page No
4.119:

#### Question
141:

Revenue from Operations `4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses `2,000; Non-operating Income `22,000. Calculate Net Profit Ratio.

#### Answer:

Net Profit=Operating Profit + Non Operating Incomes-Non Operating Expenses

=40,000+22,000- 2,000=
` 60,000

Operating Profit Ratio=100−Operating Ratio

=100-90

=10%

Operating Profit=4,00,000×10%

=
` 40,000

Net Profit Ratio=Net Profit/Revenue from operations×100

=60,000/4,00,000×100

=15%

#### Page No
4.119:

#### Question
142:

Net Profit before Interest and Tax `2,50,000; Capital Employed `10,00,000. Calculate Return on Investment.

#### Answer:

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

Capital Employed = 10,00,000

Return on Investment = Net profit Before Interest and Tax ×100/ Capital Employed

= 2,50,000×100/10,00,000

= 25%

#### Page No
4.119:

#### Question
143:

Net Profit before Interest and Tax `6,00,000; Net Fixed Assets `20,00,000; Net Working Capital `10,00,000; Current Assets `11,00,000. Calculate Return on Investment.

#### Answer:

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

Return on Investment = Net profit Before Interest and Tax ×100/ Capital Employed

= 6,00,000×100/30,00,000

= 20%

#### Page No
4.119:

#### Question
144:

Net Profit before Interest and Tax `4,00,000; 15% Long-term Debt `8,00,000; Shareholders' Funds `4,00,000. Calculate Return on Investment.

#### Answer:

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

Return on Investment = Net profit Before Interest and Tax ×100/ Capital Employed

= 4,00,000×100/12,00,000

= 33.33%

#### Page No
4.119:

#### Question
145:

*Y* Ltd.'s profit
after interest and tax was ` 1,00,000.
Its Current Assets were ` 4,00,000; Current Liabilities ` 2,00,000; Fixed Assets ` 6,00,000 and 10% Long-term Debt
`
4,00,000. The rate of tax was 20%. Calculate 'Return on Investment' of *Y*
Ltd.

#### Answer:

**Return on Investment = (Net Profit before Interest, Tax and
Dividend/ Capital Employed × 100)**

Let Profit before tax be ` 100

Tax = ` 20

Profit after tax = ` (100 – 20) = ` 80

If Profit after tax is ` 80 then profit before tax is = ` 100

If Profit after tax is ` 1,00,000 then profit before tax is = ` (1,00,000 × 100/80) = ` 1,25,000

Interest on long-term borrowings = ` (4,00,000 × 10/100)= ` 40,000

Profit after interest and Tax = ` (1,25,000 + 40,000) = ` 1,65,000

Capital Employed = Fixed Assets+ Current Assets – Current Liabilities

= ` (6,00,000 + 4,00,000 – 2,00,000) = ` 8,00,000

**Return on Investment = (1,65,000/8,00,000 × 100 )= 20.625% or 20.63%
(approx.)**

**Click on Below link for more questions Of Volume-3 of 12th**

## Chapter-4: Accounting Ratios | 2021-2022

**From Question No. 1 to 5**