# 12th | Volume 3 | Chapter:4 | Question No. 106 to 110 | Accounting Ratio | Ts grewal Accounts Solution 2022-2023

#### Question 106:

Capital Employed  ` 12,00,000; Net Fixed Assets 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations  ` 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.

Cost of Goods Sold = 40,00,000

Gross Profit = 20% of Cost

Gross Profit =20/100×40,00,000=8,00,000

 Total Sales = Cost of goods sold + Gross profit =40,00,000+8,00,000 =48,00,000 Working Capital = Capital employed – Net Fixed  Assets =12,00,000-8,00,000 =4,00,000 Working Capital turnover ratio = Net sales /Working  Capital =48,00,000/4,00,000 = 12 Times

#### Question 107:

Calculate Working Capital Turnover Ratio from the following information:
Revenue from Operations
` 15,00,000; Current Assets  ` 6,25,000; Total Assets  ` 10,00,000; Non-current Liabilities  ` 5,00,000, Shareholders' Funds  ` 2,50,000.

Working Capital Turnover Ratio = Net Sales/Working Capital

Revenue from Operations (Net Sales) = ` 15,00,000

(Given)Working Capital=Current Assets-Current Liabilities

Current Assets = 6,25,000

(Given)Current Liabilities= ?

Total Assets = Total Liabilities =  ` 10,00,000

(Given)Total Liabilities = Shareholders' Funds + Non-Current Liabilities + Current Liabilities

10,00,000 =2,50,000+5,00,000+Current Liabilities

Current Liabilities = ` 2,50,000

Working Capital=6,25,000-2,50,000= ` 3,75,000

Working Capital Turnover Ratio=15,00,000/3,75,000

Working Capital Turnover Ratio =4 times

#### Question 108:

A company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was  ` 5,00,000; Equity Share Capital of the company was  ` 10,00,000; Reserves and Surplus  ` 2,00,000; Long-term Loan  ` 3,00,000 and Non-current Assets were  ` 10,00,000.
Compute the 'Working Capital Turnover Ratio' of the company.

Working Capital Turnover Ratio= Revenue from Operation/Working Capital
Gross Profit = 25% on Cost
Let Cost of Goods sold be  ` 100.
Gross Profit =
` 25
Revenue from Operations =
` (100 + 25) =  ` 125
When Gross profit is
` 25, revenue from operations is=  ` 125
And, if Gross profit is
` 5,00,000 then revenue from operations will be=  ` (5,00,000 × 125/25) =  ` 25,00,000
Capital Employed = Shareholder’s Funds + Non-Current Liabilities
=
` (10,00,000 + 2,00,000 + 3,00,000) =  ` 15,00,000
Also, Capital Employed = Non Current Assets + Working Capital
Alternatively, Working Capital = Capital Employed – Non-current Assets =
` (15,00,000 – 10,00,000)=  ` 5,00,000
Hence, Working Capital Turnover Ratio= 25,00,000/5,00,000= 5 times

#### Question 109

From the following, calculate Gross Profit Ratio:
Gross Profit:
`50,000; Revenue from Operations  `5,00,000; Sales Return:  `50,000.

Net Sales =  ` 5,00,000

Gross Profit =  ` 50,000

Gross Profit Ratio = Gross Profit / Net Sales × 100

= 50,000/5,00,000 × 100 = 10%

Note: Here we will not deduct the amount of sales return because the amount of net sales has already been provided in the question.

#### Question 110:

Compute Gross Profit Ratio from the following information:
Cost of Revenue from Operations (Cost of Goods Sold)
`5,40,000; Revenue from Operations (Net Sales)  `6,00,000.