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Accounting Ratios
Compute Working Capital Turnover Ratio using the following information:
| Particulars | Amount (Rs) |
| Cash Sales | 1,30,000 |
| Credit Sales | 3,80,000 |
| Sales Returns | 10,000 |
| Liquid Assets | 1,40,000 |
| Current Liabilities | 1,05,000 |
| Inventory | 90,000 |
Working capital Turnover ratio = Net sales/Working capital.
Net sales = Total sales - sales return
(1,30,000 + 3,80,000) – 10,000 = 5,00,000
Working capital = Current assets - current liabilities
= (1,40,000 + 90,000) - 1,05,000 = 1,25,000
Working capital turnover ratio = 5,00,000/1,25,000 = 4 times.
Sponsor Area
From the following Balance Sheets of Vijaya Ltd. as on 31-3-2009 and 31-3-2010 prepare a Cash Flow Statement.
|
Liabilities |
31-3-2009 (Rs) |
31-3-2010 (Rs) |
Assets |
31-3-2009 (Rs) |
31-3-2010 (Rs) |
|
Share Capital General Reserve Profit & loss account Trade Creditors
|
45,000 15,000 10,000 8,700 |
65,000 27,500 15,000 11,000 |
Fixed Assets Stock Debtors Cash Preliminary expense |
46,700 11,000 18,000 2,000 1,000 |
83,000 13,000 19,500 2,500 500
|
|
|
78,700 |
1,18,500 |
|
78,700 |
1,18,500 |
Additional Information:
(i) Depreciation on Fixed Assets for the year 2009-2010 was Rs. 14,700.
(ii) An interim dividend Rs. 7,000 has been paid to the shareholders during the year.
What is meant by solvency of business?
Sponsor Area
Sponsor Area