Page No 4.121:
Question 151:
Calculate Revenue from Operations of BN Ltd. from the following information:
Current Assets 8,00,000
Quick Ratio is 1.5:1
Current Ratio is 2:1.
Inventory Turnover Ratio is 6 times.
Goods were sold at a profit of 25% on cost.
(CBSE 2019)
Answer:
Current Ratio = Current Assets/ Current Liabilities
2:1 = 8,00,000/ Current Liabilities
Current Liabilities= 8,00,000/2=4,00,000
Quick Assets= 4,00,000×1.5=6,00,000
Working Capital = Current Assets - Current Liabilities
Working Capital = 8,00,000 – 4,00,000
Working Capital = 4,00,000
Inventory= Current Assets – Quick Assets
Inventory= 8,00,000 – 6,00,000
Inventory= 2,00,000
Inventory Turnover Ratio= Cost of Revenue from operation/Average Inventory
Cost of Revenue from operation = Inventory× Inventory Turnover Ratio
Cost of Revenue from operation = 2,00,000 × 6
Cost of Revenue from operation = 12,00,000
Profit of 25% on cost
therefore,
it is assumed that
Cost is equal to 100%
|
Revenue |
= |
Cost |
+ Profit |
|
125 |
= |
100 |
+25 |
Hence,
Revenue= 12,00,000×125/100=15,00,000
Page No
4.121:
Question
152:
Following information is given about a company:
|
|
` |
|
|
` |
|
Revenue
From Operations, i.e., Net Sales Gross Profit |
1,50,000 |
|
Opening
Inventory |
29,000 |
|
Cost
of Revenue From Operations |
30,000 |
|
Closing
Inventory |
31,000 |
|
(Cost
of Goods Sold) |
1,20,000 |
|
Debtors |
16,000 |
From the above information, calculate following ratios:
(i) Gross Profit Ratio,
(ii)
Inventory Turnover Ratio, and
(iii)
Trade Receivables Turnover Ratio.
Answer:
(i)
Sales = 1,50,000
Gross Profit = 30,000
Gross Profit Ratio= Gross profit ×100/Net Sales
= 30,000×100/1,50,000
= 20%
(ii)
Opening Inventory = 29,000
Closing Inventory = 31,000
Average Inventory= Opening Inventory+ Closing Inventory/2
=29,000+30,000/2
=30,000
Cost of Goods Sold = 1,20,000
Inventory tunover ratio= Cost of
goods sold / Average Inventory
=
1,20,000/30,000
= 4 Times
(iii)
Trade receivable turnover ratio= Net Credit
sales/ Average Trade receivables
Trade receivable turnover ratio= 1,50,000/16,000
= 9.4 Times
Page No
4.122:
Question
153:
From the
following information of Green star Ltd., Calculate Debt to Equity Ratio;
|
|
` |
|
` |
|
Trade payables |
3,00,000 |
Trade Receivables |
3,00,000 |
|
Others Current Liabilities (12.5% of Currents Assets) |
|
Net Fixed Assets |
30,00,000 |
|
Total Debts |
28,00,000 |
Long Term Loan and Advances |
1,60,000 |
|
Other Quick Assets |
80,000 |
Non-Current Investments |
40,000 |
|
Prepaid Expenses |
20,000 |
Opening Inventory |
3,20,000 |
|
Note; Closing Inventory 25% more than Opening Inventory. |
|||
Answer;
Debt
equity ratio Debt upon equity
= 24,00,000 / 12,00,000 = 2 : 1
Closing inventory = 3,20,000 (opening inventory) + 25% of 3,20,000
Closing inventory = 3,20,000 (opening inventory) + 80,000
Closing
inventory = 4,00,000
Current asset = trade receivable + quick assets + inventory + prepaid expenses
= 3,00,000+80,000 + 4,00,000 + 20,000 = 8,00,000
Current liability = trade payable + other current liability
= 3,00,000 + 12.5%
of 8,00,000
= 3,00,000 + 1,00,000
= 4,00,000
Total asset = non-current assets (Net fixed assets + long term loans and advances + non-current investment) + current assets
= 30,00,000 +
1,60,000 + 40,000 +8,00,000=40,00,000
Equity = total assets - total debts
= 40,00,000 -
28,00,000 = 12,00,000
Page No
4.122:
Question
154:
From the following calculate:
(a)
Current Ratio; and
(b) Working Capital Turnover Ratio.
|
|
|
` |
|
(i) |
Revenue
from Operations |
1,50,000 |
|
(ii) |
Total
Assets |
1,00,000 |
|
(iii) |
Shareholders'
Funds |
60,000 |
|
(iv) |
Non-current
Liabilities |
20,000 |
|
(v) |
Non-current
Assets |
50,000 |
Answer:
A) Current Ratio = Current Assets Current Liabilities
Current Assets = Total Assets – Non Current Assets
=
1,00,000 – 50,000
= ` 50,000
Total Assets = Total Liabilities = Shareholders’ Funds + Non-Current
Liabilities + Current Liabilities
1,00,000 = 60,000 + 20,000 + Current Liabilities
Current Liabilities = ` 20,000
Current Ratio = 50,000/20,000 = 2.5 : 1
B) Working Capital Turnover Ratio = Revenue from Operations /Working Capital
Working Capital = Current Assets – Current Liabilities
= 50,000 – 20,000
= ` 30,000
Working Capital Turnover Ratio = 1,50,000/30,000 = 5 times
Page No
4.122:
Question 155:
From
the following information obtained from the books of Kamal Ltd., calculate (i) Gross Profit Ratio and (ii) Net Profit Ratio:
|
|
` |
|
Revenue from Operations |
2,50,000 |
|
Purchases |
1,05,000 |
|
Carriage Inwards |
4,000 |
|
Salaries |
30,000 |
|
Decrease in Inventory |
15,000 |
|
Return Outwards |
5,000 |
|
Wages |
18,000 |
(CBSE
2020)
Answer:
(i) Gross Profit= Revenue- Net Purchase- Carriage Inwards- Wages- Decrease in Inventory
Gross Profit= 2,50,000- (1,05,000-5,000)- 4,0000 – 18,000-15,000
Gross Profit=1,13,500
Gross Profit=1,13,500×100/2,50,000 =45.20%
(ii) Net Profit= Gross Profit –Salaries
Net Profit= 1,13,000 – 30,000
Net Profit= 83,000
Net Profit=83,500×100/2,50,000 =33.20%
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