Following is the statement of profit and loss of Maria Ltd. for the year ended 31st March, 2018. Calculate the operating cost ratio.

Statement of Profit and Loss

Particulars	Note No.	Amount Rs.
I. Revenue from operations		8,00,000
II. Other Income		20,000
III. Total revenue (I +II)		8,20,000
IV. Expenses:
Purchases of stock-in-trade		4,50,000
Changes in inventories		-40,000
Employee benefits expenses	1	22,000
Other expenses	2	68,000
Total expenses		5,00,000
V. Profit before tax (III-IV)		3,20,000

Notes to Accounts

Particulars	Amount Rs.
1. Employee benefits expenses
Wages (direct)	10,000
Salaries	12,000
Total	22,000
2. Other expenses	20,000
Selling and distribution expenses	28,000
Loss on sale of fixed asset	20,000
Total	68,000

Explain the objectives of ratio analysis.

What is inventory conversion period? How is it calculated?

How is operating profit ascertained?

State any three advantages of ratio analysis.

Bring out the limitations of ratio analysis.

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

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders’ funds
Equity share capital	4,00,000
2. Non-current liabilities	2,00,000
Long term borrowings
3. Current liabilities
(a) Short-term borrowings	50,000
(b) Trade payables	3,10,000
(c) Other current liabilities
Expenses payable	15,000
(d) Short-term provisions	25,000
Total	10,00,000
II ASSETS
1. Non-current assets
(a) Fixed assets	4,00,000
Tangible assets
2. Current assets
(a) Inventories	1,60,000
(b) Trade debtors	3,20,000
(c) Cash and cash equivalents	80,000
(d) Other current assets
Prepaid expenses	40,000
Total	10,00,000

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

From the following information calculate debt equity ratio.

Balance Sheet (Extract) as on 31st March, 2019

Particulars	Amount Rs.
I. EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	6,00,000
(b) Reserves and surplus	2,00,000
2. Non-current liabilities
Long-term borrowings (Debentures)	6,00,000
3. Current liabilities
(a) Trade payables	1,60,000
(b) Other current liabilities
Outstanding expenses	40,000
Total	16,00,000

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

Balance Sheet of Sundaram Ltd. as on 31.3.2019

Particulars	Amount Rs.
I. EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
(i) Equity share capital	2,50,000
(ii) Preference share capital	1,50,000
(b) Reserves and surplus	50,000
2. Non-current liabilities
Long-term borrowings	-
3. Current liabilities
Trade payables	1,50,000
Total	6,00,000
II ASSETS
1. Non-current assets
(a) Fixed assets	4,60,000
(b) Non-current investments	1,00,000
2. Current assets
Cash and Cash equivalents	40,000
Total	6,00,000

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	4,00,000
5% Preference share capital	1,00,000
(b) Reserves and surplus
General reserve	2,50,000
Surplus	1,50,000
2. Non-current liabilities
Long-term borrowings (6% Debentures)	3,00,000
3. Current liabilities
(a) Trade payables	1,20,000
Provision for tax	30,000
Total	13,50,000

From the given information calculate the inventory turnover ratio and inventory conversion period (in months) of Devi Ltd.

Particulars	Rs
Revenue from operations	12,00,000
Inventory at the beginning of the year	1,70,000
Inventory at the end of the year	1,30,000
Purchases made during the year	6,90,000
Carriage inwards	20,000

The credit revenue from operations of Velavan Ltd, amounted to Rs. 10,00,000. Its debtors and bills receivables at the end of the accounting period amounted to Rs. 1,10,000 and Rs. 1,40,000 respectively. Calculate trade receivables turnover ratio and also collection period in months.

From the following figures obtained from Arjun Ltd, calculate the trade payables turnover ratio and credit payment period (in days).

Particulars	Rs
Credit purchases during 2018 – 2019	9,50,000
Trade creditors as on 1.4.2018	60,000
Trade creditors as on 31.3.2019	50,000
Bills payable as on 1.4.2018	45,000
Bills payable as on 31.3.2019	35,000

Following is the statement of profit and loss of Padma Ltd. for the year ended 31st March, 2018. Calculate the operating cost ratio.

Statement of Profit and Loss

Particulars	Note No.	Amount Rs.
I. Revenue from operations		15,00,000
II. Other Income		40,000
III. Total revenue (I+II)		15,40,000
IV. Expenses:
Purchases of Stock-in-trade		8,60,000
Changes in inventories		40,000
Employee benefits expense (Salaries)		1,60,000
Other expenses	1	1,70,000
Total expenses		12,30,000
V. Profit before tax (III-IV)		3,10,000

Notes to Accounts

Particulars	Amount Rs.
1. Other expenses
Office and administrative expenses	50,000
Selling and distribution expenses	90,000
Loss on sale of furniture	30,000
	1,70,000

From the following details of a business concern calculate net profit ratio. 

Particulars	Rs.
Revenue from operations	9,60,000
Cost of revenue from operations	5,50,000
Office and administration expenses	1,45,000
Selling and distribution expenses	25,000

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 given information calculate the inventory turnover ratio and inventory conversion period (in months) of Sania Ltd.

Particulars	Rs.
Revenue from operations	1,90,000
Inventory at the beginning of the year	40,000
Inventory at the end of the year	20,000
Purchases made during the year	90,000
Carriage inwards	10,000

From the following figures obtained from Kalpana Ltd, calculate the trade payables turnover ratio and credit payment period (in days).

Particulars	Rs.
Credit purchases during 2018 – 2019	1,00,000
Trade creditors as on 1.4.2018	20,000
Trade creditors as on 31.3.2019	10,000
Bills payable as on 1.4.2018	4,000
Bills payable as on 31.3.2019	6,000

From the following statement of profit and loss of Mukesh Ltd. Calculate
(i) Gross profit ratio
(ii) Net profit ratio

Particulars	Amount Rs.
I. Revenue from operations	5,00,000
II. Other income
Income from investment	40,000
III. Total revenues (I+II)	5,40,000
IV. Expenses
Purchase of stock in trade	1,80,000
Changes in inventories	20,000
Employee benefits expense	30,000
Other expenses	1,10,000
Provision for tax	50,000
Total expenses	3,90,000
V. Profit for the year	1,50,000