# 12th | Ts grewal 2021-2022 Question 141 to 145 | ch:4 Accounting Ratios

#### 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.

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%

#### Question 142:

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

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%

#### 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.

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%

#### 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.

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%

#### 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.

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.)