# 12th | Ts grewal 2021-2022 Question 161 to 164 | ch:4 Accounting Ratios

#### Question 161:

From the following information related to Naveen Ltd., calculate (a) Return on Investment and (b) Total Assets to Debt Ratio:
Information: Fixed Assets
` 75,00,000; Current Assets  ` 40,00,000; Current Liabilities  ` 27,00,000; 12% Debentures  ` 80,00,000 and Net Profit before Interest, Tax and Dividend  ` 14,50,000.

1) Return on Investment

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

Net profit  Before Interest, Tax and dividend=14,50,000
Capital employed= Fixed Assets +
Current Assets+ Current Liabilities
=75,00,000+40,00,000+27,00,000

=88,00,000

Return on Investment =14,50,000×100/88,00,000

=16.48%

2) Total Assets to Debt to Ratio
Total Assets to Debt Ratio = Total Assets/Debt

Total Assets = Fixed Assets + Current Assets

= ` (75,00,000 + 40,00,000)

= ` 1,15,00,000

Debt =  ` 80,00,000

Total Assets to Debt Ratio = 1,15,00,000/80,00,000

= 1.44:1

#### Question 164:

From the following information, calculate Return on Investment (or Return on Capital Employed):

 Particulars ` Share Capital 5,00,000 Reserves and Surplus 2,50,000 Net Fixed Assets 22,50,000 Non-current Trade Investments 2,50,000 Current Assets 11,00,000 10% Long-term Borrowings 20,00,000 Current Liabilities 8,50,000 Long-term Provision NIL