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
