Ratio Analysis Two Marks Questions

12th Standard EM

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Accountancy

Time : 00:45:00 Hrs
Total Marks : 20
    10 x 2 = 20
  1. What is quick ratio?

  2. What is meant by debt equity ratio?

  3. 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

  4. 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
  5. Definition of ratio analysis.

  6. What is Liquidity ratios?

  7. What is turnover ratios?

  8. Quick ratio of a company is 1.5: 1.State giving reason, whether the ratio will improve, decline or not change on payment of divided by the company.

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

  10. The liquidity of a business firm is measured by its ability to satisfy its long-term obligations as they become due. Comments.

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