What is meant by accounting ratios?

What is quick ratio?

What is meant by debt equity ratio?

What does return on investment ratio indicate?

State any two limitations of ratio analysis.

Calculate current ratio from the following information:

Particulars	Rs.	Particulars	Rs.
Current investments	80,000	Trade creditors	1,60,000
Inventories	1,60,000	Bills payable	1,00,000
Trade receivables	4,00,000	Expenses payable	1,40,000
Cash and cash equivalents	1,20,000
Prepaid expenses	40,000

Calculate quick ratio of Ananth Constructions Ltd from the information given below.

Particulars	Rs.
Total current liabilities	1,00,000
Total current assets	2,50,000
Inventories	50,000
Prepaid expenses	15,000

Following is the balance sheet of Magesh Ltd. as on 31st March, 2019:

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders’ funds
Equity share capital	2,00,000
2. Non-current liabilities
Long term borrowings	50,000
3. Current liabilities
(a) Short-term borrowings	17,000
(b) Trade payables	25,000
(c) Other current liabilities
Expenses payable	3,000
(d) Short-term provisions	5,000
Total	3,00,000
II ASSETS	Rs.
1. Non-current assets
Fixed assets
(a) Tangible assets	1,50,000
(b) Trade receivables	70,000
(c) Cash and cash equivalents	30,000
(d) Other current assets
Prepaid expenses	5,000
Total	3,00,000

Calculate:
(i) Current ratio
(ii) Quick ratio

From the following information, calculate debt equity ratio:

Balance sheet (Extract) as on 31.03.2018

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	1,00,000
(b) Reserves and surplus	60,000
2. Non-current liabilities
Long-term borrowings (Debentures)	80,000
3. Current liabilities
(a) Trade payables	50,000
(b) Other current liabilities
Outstanding expenses	30,000
Total	3,20,000

From the following Balance Sheet of Pioneer Ltd. calculate proprietary ratio:

Balance sheet of Pioneer Ltd. as on 31.3.2019

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
(i) Equity share capital	1,00,000
(ii) Preference share capital	75,000
(b) Reserves and surplus	25,000
2. Non-current liabilities
Long-term borrowings	-
3. Current liabilities
Trade payables	2,00,000
Total	4,00,000
II ASSETS
1. Non-current assets
(a) Fixed assets	2,75,000
(b) Non-current investments	50,000
2. Current assets
Cash and Cash equivalents	75,000
Total	4,00,000

From the following information calculate capital gearing ratio:

Balance Sheet (Extract) as on 31.03.2018

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	2,00,000
6% Preference share capital	1,00,000
(b) Reserves and surplus
General reserve	1,25,000
Surplus	75,000
2. Non-current liabilities
Long-term borrowings (8% Debentures)	2,00,000
3. Current liabilities
Trade payables	1,50,000
Provision for tax	50,000
Total	9,00,000

What is Liquidity ratios?

What is current ratio?

How does ratio analysis become less effective due to does ratio changes?

Why should the inventory turnover ratio be more important when analysing a grocery store than an insurance company?