-->

Ratio analysis || Past question solution || Class 12

Ratio analysis past question solution of account class 12 || Part 3 || 2066 Q. No. 15 - 2060 supp. || 

Formula of Ratio analysis  Click here

Ratio analysis part -1 Click here

Ratio analysis part -2 Click here


2066 Q. NO. 15

a.     Current ratio = (current assets)/(current liabilities)

= 70000 / 30000

= 2.33:1

Working note

Current assets = Inventory + Debtors + Cash balance + Bills receivable + Debtors

= 20000 + 30000 + 10000 + 10000

= 70000

Current liabilities = Creditors

= 30000

 

b.     Quick ratio = (Quick Assets) / (Current liabilities)

= 40000 / 30000

= 1.33:1

Working note

Quick assets = Current assets – Inventory

= 70000 – 30000

= 40000

 

c.      Debtors turnover ratio = Net sales / (Debtors + Bills receivable)

OR, 4 = Sales amount / (30000 + 10000)

OR, 4 = Sales amount / 40000

OR, Sales amount = Rs. 160000

 

d.     Gross profit margin = ( Gross profit / Net sales ) *100

= (25000 / 160000)*100

= 15.63%

 

e.     Inventory turnover ratio = Net sales / Inventory

= 160000 / 20000

= 8 times

 

2066 Supp. Q. No. 15

 a.     Liquidity ratio = Liquid assets / Current liabilities

= 270000 / 60000

= 4.5:1

Working note

Liquid assets = Debtors + Bank balance + Advance salary

= 225000 + 40000 + 5000

= 270000

Current liabilities = Creditors + Wages – outstanding

= 50000 + 10000

= 60000

 

b.     Debtors turnover ratio = Net sales / Debtors

= 800000 / 225000

= 3.56 times

 

c.      Fixed assets turnover ratio = Net sales / Net fixed assets

= 800000 / 810000

= 0.99 times

 

d.     Debt equity ratio = Long term debt / Shareholders’ equity

= (300000 / 780000)*100

= 38.46%

 Working note

Long term debt = 10% debentures

= 300000

Shareholders’ equity = Share capital + Profit and loss a/c – Preliminary expenses

= 600000 + 190000 – 10000

= 780000

 

e.     Return on assets = {(NPAT + Interest) / Total net assets} * 100

= {(150000 + 3000) / 1140000} *100

= 15.79 %

Working note

Total net assets = Total assets – Preliminary expenses

= 1150000 – 10000

= 1140000


2065 Q. No. 15

a.     Debtors turnover ratio = Net sales / Total debts

OR, 10 = Net sales / 60000

 Net sales = Rs. 600000

 

b.     Liquid ratio = Liquid assets / Current liabilities

= 123000 / 108000

= 1.14: 1

Working note

Liquid assets = Sundry debtors + Cash balance + Short - term loan

= 60000 + 33000 + 30000

= 123000

Current assets = Bills payable + Interest payable

= 90000 + 18000

= 108000

 

c.      Debt equity ratio = (Long term debt / Shareholders’ equity)*100

= (150000 / 355000)*100

= 42.25%

 Working note

Long term debt = 12 % Debenture

= 150000

Shareholders’ equity = Equity capital + Reserve and surplus – Preliminary expenses

= 300000 + 60000 – 5000

= 355000

 

2065 Q. No. 16 (OLD)

a.     Current ratio = Current assets / Current liabilities

= 188000 / 56000

= 3.36: 1

Working note

Current assets = Stock + Bills receivable + Cash in hand + cash at bank + Debtors

= 90000 + 12000 + 16000 + 30000 + 40000

= 188000

Current liabilities = Tax payable + Bank overdraft + Sundry creditors + Outstanding salary

= 10000 + 32000 + 10000 + 4000

= 56000

 

b.     Quick ratio = Quick assets / Current liabilities

= 98000 / 56000

= 1.75:1

Working note

Quick assets = Current assets – Stok

= 188000 – 90000

= 98000

 

c.      Debt to total capital ratio = (Long term debt / capital employed)*100

= (50000 / 216000)*100

= 23.15%

 Working capital

Long term debt = 6 % Debenture

= 50000

Shareholders’ equity = Share capital + General reserve + profit and loss account – Preliminary expenses

= 140000 + 6000 + 24000– 4000

= 166000

Capital employed = Long term debt + Shareholder’s equity

= 50000 + 166000

= 216000

 

d.     Return on assets = {(NPAT + interest) / Net assets} *100

= {(60000 + 3000) / 272000}*100

= 23.16 %

 

e.     Return on shareholder’s fund =  (NPAT – pref. dividend) / Equity shareholders’ fund

= (60000 – 0)/166000

= 36.14 %

 Working note

Equity shareholders’ fund = Share capital + General reserve + Profit and loss account – preliminary expenses

= 140000 + 6000 + 24000 – 4000

= 166000

f.       Net profit ratio = (NPAT / Sales)*100

= (60000 / 600000)*100

= 10%

 

2064 Q. No. 15

a.     Current ratio = Current assets / Current liabilities

= 70000 / 20000

= 3.5:1

Working note

Current assets = Inventory + Debtors + Bills receivable + Cash in hand

= 30000 + 25000 + 10000 + 5000

= 70000

Current liabilities = Creditors

= 20000

 

b.     Quick ratio = Quick assets / Current liabilities

= 40000 / 20000

= 2:1

Working note

Quick assets = Current assets – Inventory

= 70000 – 30000

= 40000

 

c.      Debtors turnover ratio = Net sales / (Debtors + Bills receivable)

OR, 5 = Net sales / (25000 + 10000)

OR, Net sales = Rs. 175000

d.     Fixed assets turnover ratio = Net sales / Fixed assets

= 175000 / 50000

= 3.5 times

 

e.     Gross profit margin = (Gross profit / Net sales ) * 100

OR, (20000 / 175000)*100

OR, 11.43 %

 

 2064 Q. No. 16 (OLD)

a.     Current ratio = Current assets / Current liabilities

OR, 2 = 500000 / Current liabilities

Current liabilities = 250000

 

b.     Quick assets = Current assets – Stock

= 5000000 – 250000

= 250000

 

c.      Quick ratio = Quick assets / Current liabilities

= 2500000 / 250000

= 1:1

 

2064 Q. No. 17 (OLD)

a.     Current ratio = Current assets / Current liabilities

= 325000 / 135000

= 2.41:1

Working note

Current assets = Inventories + Sundry debtors + Marketable securities + Cash at bank

= 125000 + 50000 + 120000 + 30000

= 325000

Current liabilities = Sundry creditors + Bills payable + Outstanding expenses

= 40000 + 85000 + 10000

= 135000

 

b.     Debt – equity ratio = (Long – term debt / Shareholders’ equity)*100

= (125000 / 315000)*100

= 39.68 %

Working note

Long term debt = 10% Debenture

= 125000

Shareholders’ fund = Share capital + Reserve and surplus

= 250000 + 65000

= 315000

 

c.      Inventory turnover ratio = Sales / Inventory

OR, 6 = Sales amount / 125000

Sales amount = Rs. 750000

 

d.     Fixed assets turnover ratio = Sales / Fixed assets

= 7500000 / 250000

= 3 times

Working note

Fixed assets = Machinery + Furniture

= 150000 + 100000

= 250000

 

e.     Net profit margin = (Net profit / Net sales)*100

= (50000 / 750000)*100

= 6.67%

 

f.       Return on shareholder’s equity = (NPAT / Shareholders’ equity)*100

= (50000 / 315000)*100

= 15.87%

2064 Supp. Q. No. 15

a.     Current ratio = Current assets / Current liabilities

= 195000 / 50000

= 3.9:1

Working note
Current assets = Inventory + Account receivable + Cash at bank
= 75000 + 20000 + 10000
= 195000
Current liabilities = Bills payable + Account payable + Bank overdraft
= 15000 + 20000 + 15000
= 50000

 

b.     Gross profit margin = (Gross profit / Net sales)*100

OR, 20% = (170000 / Net sales)*100

OR, 0.2 = 170000 / Net sales

OR, 0.2 Net sales = 170000

Net sales = Rs. 850000

 

c.      Net profit margin = (Net profit / Net sales)*100

OR, 10% = (Net profit / 850000)*100

OR, 0.1 = Net profit / 850000

OR, Net profit = Rs. 85000

 

d.     Return on shareholders’ equity = (NPAT / Share holders’ equity)*100

= (85000 / 270000)*100

= 31.48%

Working note

Shareholders’ equity = Share capital + general reserve + Retaining earning  

= 200000 + 50000 + 20000

= 270000

 

2063 Q. No. 16

a.     Return on owner’s equity = (NPAT / Shareholders’ equity)*100

= (45000 / 845000)*100

= 5.325 %

Working note

Net profit before tax = 60000

(-) Tax (60000 * 25%) = 15000

Net profit after tax (NPAT) = 45000

 

Shareholders’ equity = Equity share capital + 10% preference share capital + Net profit after tax

= 600000 + 200000 + 45000

= 845000

 

b.     Return on common shareholders’ equity = (NPAT – Pref. dividend) / Shareholders’ equity

= (45000 – 20000) / 845000

= (25000 / 845000)*100

= 2.95 %

2063 Q. No. 17

a.     Current ratio = (current assets)/(current liabilities)

= 300000 / 30000

= 10:1

Working note

Current assets = Stock in trade + Debtors + Cash + Prepaid expenses

= 100000 + 80000 + 40000 + 80000

= 300000

Current liabilities = Sundry creditors

= 30000

 

b.     Quick ratio = Quick assets / Current liabilities

= 120000 / 30000

= 4:1

Working note

Quick assets = Current assets – Stock in trade – Prepaid expenses

= 300000 – 100000 – 80000

= 120000

 

c.      Debt to equity ratio = (Long term debt / Shareholders’ equity)*100

= (120000 / 550000)*100

= 21.81%

Working note

Long term debt = 8% debentures

= 120000

Shareholders’ equity = Equity share capital + 7% preference share capital + Reserve + Retaining earnings

= 300000 + 200000 + 10000 + 40000

= 5500000

 

d.     Net profit margin = (Net profit / Net sales)*100

= (75000 / 1000000)*100

= 0.75%

Working note

Net profit before tax = 100000

(-) Tax (25% of 100000) = 25000

Net profit after tax = 75000

 

e.     Fixed assets turnover ratio = Sales / Fixed assets

= 1000000 / 400000

= 2.5 times

 

f.       Debtors turnover ratio = Sales / Debtors

= 1000000 / 80000

= 12.5 times

 

2062 Q. No. 16

a.     Current ratio = (current assets)/(current liabilities)

OR, 5 = 200000 / Current liabilities

OR, 5 Current liabilities = 200000

Current liabilities = Rs. 40000

 

b.     Liquid ratio = Liquid assets / Current liabilities

OR, 2 = Liquid assets / 40000

Liquid assets = Rs. 80000

 

2062 Q. No. 17

a.     Current ratio = (current assets)/(current liabilities)

= 366000 / 150000

= 2.44:1

Working note

Current assets = Stock in trade + Debtors + Cash

= 180000 + 170000 + 16000

= 366000

 

b.     Liquid ratio = Liquid assets / Current liabilities

= 186000 / 150000

= 1.24:1

Working note

Liquid assets = Current asset – Stock in trade

= 366000 – 180000

= 186000

 

c.      Gross profit margin = ( Gross profit / Net sales ) *100

= (150000 / 750000)*100

= 20%

Gross profit = Sales – Cost of goods sold

= 750000 – 600000

= 150000

 

d.     Fixed assets turnover ratio = Net sales / Net fixed assets

= 750000 / 80000

= 9.375:1

 

e.     Debtors turnover ratio = Net sales / Debtors

= 750000 / 170000

= 4.41:1

 

2061 Q. No. 16

a.     Current ratio = Current assets / Current liabilities

OR, 4.5 = Current assets / 60000

Current assets = Rs. 270000

 

b.     Liquid ratio = Liquid assets / Current liabilities

OR, 2.5 = Liquid assets / 60000

Liquid assets = Rs. 150000

 

c.      Stock in hand = Current assets – Liquid assets

= 270000 – 150000

= Rs. 1200000

 

2061 Q. No. 17

a.     Current ratio = (current assets)/(current liabilities)

= 340000 / 78000

= 4.36:1

Working note

Current assets = Inventory + Sundry debtors + Rent receivable + Cash at bank + Prepaid expenses

= 100000 + 80000 + 20000 + 120000 + 20000

= 340000

Current liabilities = Sundry creditors + Bills payable + Outstanding interest

= 30000 + 40000 + 8000

= 78000

b.     Quick ratio = Quick assets / Current liabilities

= 220000 / 78000

= 2.82:1

Working note

Quick assets = Current assets – Inventory – Prepaid expenses

= 340000 – 100000 - 20000

= 220000 

c.     Debt to equity ratio = (Long term debt / Shareholder’s fund)*100

= (100000 / 562000)*100

= 17.80%

Working note

Long term debt = 8% debentures

= 100000

Shareholders’ equity = Equity share capital + General reserve + Retaining earning – Preliminary expenses

= 500000 + 50000 + 22000 – 10000

= 562000

 

d.     Fixed assets turnover ratio = Net sales / Net fixed assets

= 1400000 / 400000

= 3.5 times

 

e.      Stock turnover ratio = Net sales / Inventory

= 1400000 / 100000

= 14 times

 

f.     Return on shareholder’s equity = (NPAT / Shareholder’s fund)*100

= (150000 / 562000)*100

= 26.70%

 

2060 Q. No. 16

a.     Gross profit margin = (Gross profit / Net sales)*100

OR, 20% = (340000 / Net sales) *100

OR, 0.2 = 340000 / Net sales

OR, 0.2 Net sales = 340000

Net sales = Rs. 1700000

 

b.     Current ratio = Current assets / Current liabilities

= 210000 / 100000

= 2.1:1

Working note

Current assets = Inventory + Sundry debtors + Cash and bank balance + Prepaid

= 150000 + 30000 + 20000 + 10000

= 210000

Current liabilities = Sundry creditors + Bills payable + Bank overdraft + Outstanding expenses

= 40000 + 30000 + 25000 + 5000

= 100000

 

c.      Quick ratio = Quick assets / Current liabilities

= 50000 / 100000

= 0.5:1

Working note

Quick assets = Current assets – Inventory – Prepaid

= 210000 – 150000 -10000

= 50000

 

d.     Net profit margin = (Net profit / Net sales)*100

OR, 7.5 = (Net profit / 1700000)*100

OR, 0.075 = Net profit / 1700000

Net profit = Rs. 127500

 

e.     Inventory turnover ratio = Sales / Inventory

= 1700000 / 150000

= 11.33 times

 

f.       Return on shareholders’ equity = (NPAT / Shareholders’ fund)*100

= (127500 / 540000)*100

= 23.61%

Working note

Shareholders’ fund = Share capital + General reserve + Retaining earning

= 400000 + 100000 + 40000

= 540000

 

2060 supp. Q. No. 7

a.     Current ratio = Current assets / Current liabilities

  250000 / 100000

   2.5:1

Working capital

Working capital = Current assets – Current liabilities

OR, 150000 = 250000 – Current liabilities

Current liabilities = 100000

b.     Quick ratio = Quick assets / Current liabilities

= 190000 / 100000

= 1.9:1

Working note

Quick assets = Current assets – Stock

= 250000 – 60000

= 190000

 

2060 Supp. Q. No. 8

a.     Stock turnover ratio = Sales / Inventory

= 450000 / 121350

= 3.71 times

 

b.     Debt-equity ratio = (Long term debt / Shareholders’ fund)*100

= (99000 / 216300)*100

= 45. 8%

Working note

Shareholders’ fund = Share capital + Profit and loss a/c

= 120000 + 96300

= 216300

 

c.      Quick ratio = Quick assets / current liabilities

= 90150 / 112350

= 0.8:1

Working note

Quick assets = other current assets

= 90150

Current liabilities = Creditors + Bank overdraft

= 82350 + 30000

= 112350

 

d.     Return on assets = (NPAT + Interest / Total assets}*100

= {(22350 + 7920) / 450000}*100

= (30270 / 450000)*100

= 6.73%

Working note

Interest = (8% of 99000 (debenture))

= 7920

Total assets = Fixed assets + other current assets + Inventories

= 238500 + 90150 + 121350

= 450000

e.     Fixed assets turnover ratio = Sales / Fixed assets

= 450000 / 238500

= 1.89 times

 

f.       Return on shareholders’ equity = (NPAT / Shareholders’ equity)*100

= (22350 / 216300)*100

= 10.33% 

 

b.     Quick ratio = Quick assets / Current liabilities

= 220000 / 78000

= 2.82:1

Working note

Quick assets = Current assets – Inventory – Prepaid expenses

= 340000 – 100000 - 20000

= 220000

 

=