Sponsor Area
Accounting Ratios
Compute Debt Equity Ratio using the following information:
| Particulars | Amount (RS.) |
| Total Assets | 3,50,000 |
| Total Debts | 2,50,000 |
| Current Liabilities | 80,000 |
b) Debt Equity Ratio = Debts/ Equity
Debt = Total Debt – CL
= 2,50,000 – 80,000 = 1,70,000
Equity = Total Assets – Total Debts
= 3,50,000 – 2,50,000 = 1,00,000
Debt Equity Ratio = 1,70,000/1,00,000=1.7:1
Some More Questions From Accounting Ratios Chapter
From the following information related to Naveen Ltd. calculate
Return on Investment
Information: Fixed Assets Rs 75,00,000; Current Assets Rs 40,00,000; Current Liabilities Rs 27,00,000; 12% Debentures Rs 80,00,000 and Net Profit before Interest, Tax and Dividend Rs 14,50,000.
Return on Investment
From the following information related to Naveen Ltd. calculate
Total Assets to Debt Ratio
Information: Fixed Assets Rs 75,00,000; Current Assets Rs 40,00,000; Current Liabilities Rs 27,00,000; 12% Debentures Rs 80,00,000 and Net Profit before Interest, Tax and Dividend Rs 14,50,000.
Total Assets to Debt Ratio
Information: Fixed Assets Rs 75,00,000; Current Assets Rs 40,00,000; Current Liabilities Rs 27,00,000; 12% Debentures Rs 80,00,000 and Net Profit before Interest, Tax and Dividend Rs 14,50,000.
The motto of Yash Ltd., an advertising company is 'Service with Dignity'. Its management and work force is hard-working, honest and motivated. The net profit of the company doubled during the year ended 31-3-2014. Encouraged by its performance company decided to give one-month extra salary to all its employees. Following is the Comparative Statement of Profit and Loss of the company for the years ended 31st March 2013 and 2014.
(a) Calculate Net Profit Ratio for the years ending 31st March, 2013 and 2014.
(b) Identify any two values which Yash Ltd. is trying to propagate.
(b) Identify any two values which Yash Ltd. is trying to propagate.
(a)From the following information, compute Debt-Equity Ratio:
Long Term Borrowings
2,00,000
Long Term Provisions
1,00,000
Current Liabilities
50,000
Non-Current-Assets
3,60,000
Current - Assets
90,000
(b) The current ratio of X. Ltd is 2:1. State with reason which of the following transaction could (i) increase; (ii) decrease or (iii) not change the ratio.
(1) Included in the trade payables was a bills payable of Rs 9,000 which was met on maturity.
(2) Company issued 1,00,000 equity shares of Rs 10 each to the Vendors of machinery purchased.
(1) Included in the trade payables was a bills payable of Rs 9,000 which was met on maturity.
(2) Company issued 1,00,000 equity shares of Rs 10 each to the Vendors of machinery purchased.
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
Compute Debt Equity Ratio using the following information:
Particulars
Amount (RS.)
Total Assets
3,50,000
Total Debts
2,50,000
Current Liabilities
80,000
O.M. Ltd has a Current Ratio of 3.5:1 and Quick Ratio of 2:1. If the excess of Current Assets over Quick Assets as represented by Stock is Rs 1,50,000, calculate Current Assets and Current Liabilities.
From the following information, calculate any two of the following ratios:
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ration and
(c) Return on Investment
Information: Equity Share capital Rs 50,000, General Reserve Rs 5,000; Profit and Loss
Account after tax and interest Rs 15,000; 9% Debenture Rs 20,000; Creditors Rs 15,000; Land and Building Rs 65,000; Equipment Rs 15,000; Debtors Rs 14,500 and Cash Rs 5,500. Discount on issue of shares Rs 5,000
Sales for the year ended 31-3-2011 was Rs 1,50,000. Tax rate 50%.
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ration and
(c) Return on Investment
Information: Equity Share capital Rs 50,000, General Reserve Rs 5,000; Profit and Loss
Account after tax and interest Rs 15,000; 9% Debenture Rs 20,000; Creditors Rs 15,000; Land and Building Rs 65,000; Equipment Rs 15,000; Debtors Rs 14,500 and Cash Rs 5,500. Discount on issue of shares Rs 5,000
Sales for the year ended 31-3-2011 was Rs 1,50,000. Tax rate 50%.
On the basis of the following information, calculate:
(i) Debt-Equity Ratio and
(ii) Working Capital Turnover Ratio
Information: Rs.
Net Sales 60,00,000
Cost of goods sold 45,00,000
Other current assets 11,00,000
Current liabilities 4,00,000
Paid up share capital 6,00,000
6% Debentures 3,00,000
9% Loan 1,00,000
Debenture Redemption Reserve 2,00,000
Closing Stock 1,00,000
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.
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
(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.
Sponsor Area
Mock Test Series
Mock Test Series