# 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 noteCurrent 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 noteQuick 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 debtsOR, 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 noteEquity 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 noteCurrent 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 noteQuick 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 ) * 100OR, (20000 / 175000)*100

OR, 11.43 %

**2064 Q. No. 16 (OLD)**

a.Current ratio = Current assets / Current liabilitiesOR, 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 noteCurrent 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)*100OR, 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)*100OR, 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 noteShareholders’ 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 noteNet 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 noteCurrent 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 noteQuick 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 noteLong 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 noteNet 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 liabilitiesOR, 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 noteCurrent assets = Stock in trade + Debtors + Cash

= 180000 + 170000 + 16000

= 366000

b.Liquid ratio= Liquid assets / Current liabilities= 186000 / 150000

= 1.24:1

Working noteLiquid 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 liabilitiesOR, 4.5 = Current assets / 60000

Current assets =Rs. 270000

b.Liquid ratio = Liquid assets / Current liabilitiesOR, 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 noteCurrent 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 noteQuick 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 noteLong 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)*100OR, 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 noteCurrent 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 noteQuick assets = Current assets – Inventory – Prepaid

= 210000 – 150000 -10000

= 50000

d.Net profit margin = (Net profit / Net sales)*100OR, 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 noteShareholders’ fund = Share capital + General reserve + Retaining earning

= 400000 + 100000 + 40000

= 540000

**2060 supp. Q. No. 7**

a.Current ratio= Current assets / Current liabilities250000 / 100000

2.5:1

Working capitalWorking 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 noteQuick 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 noteShareholders’ fund = Share capital + Profit and loss a/c

= 120000 + 96300

= 216300

c.Quick ratio =Quick assets / current liabilities= 90150 / 112350

= 0.8:1

Working noteQuick 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 noteInterest = (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 noteQuick assets = Current assets – Inventory – Prepaid expenses

= 340000 – 100000 - 20000

= 220000