# 12th | Ts grewal 2021-2022 Question 151 to 155 | ch:4 Accounting Ratios

#### 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)

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

#### 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

(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)

= 9.4 Times

#### 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.

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

#### 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

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

#### 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)

(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%