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Published on: 30/09/2019
Accounting Ratio
Download CBSE Class 12th Standard CBSE Accountancy question papers, sample papers, important questions, and previous year solved papers in PDF format. Get free study materials, NCERT solutions, and exam preparation resources for Class 12th Standard CBSE Accountancy
Questions + Answers key
Take MCQ Accountancy Test
1.
What does higher inventory turnover ratio indicate?
2.
Who are mainly interested in liquidity ratios?
3.
From the following information related to Naveen Ltd.
Calculate (a)Return on investment and (b)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 beore Interest,Tax and Dividend Rs.14,50,000
4.
From the information available from the books Ram Nath Limited on 31.03.2012, calculate:
(a) Liquid Ratio and (b) Inventory Turnover Ratio.
Inventory Rs.1,00,000, Trade Receivables Rs.1,20,000, Advance Tax Rs.4,00,000, Cash and Cash Equivalent Rs.60,000, Trade payables Rs.1,05,000,
Bank overdraft Rs.8,000, Cost of Revenue from Operations Rs.4,20,000.
Additional Information:
Closing inventory was Rs.20,000 more than opening inventory.
5.
The Debt Equity Ratio of a company is 1:2. State with reason which of the following transactions would (i) increase, (ii) decrease or (iii) not change in ratio:
(1) Issued equity shares of Rs.1,00,000
(2) Obtained a short-term loan from bank Rs.1,00,000
6.
Umesh Ltd.'s Debt Equity Ratio is 2:1. State with reason whether this will increase, decrease or there will be no change in it due to the following transactions:
(i) A trade payable of Rs.5,000 was paid
(ii) Issued equity shares of Rs. 2,00,000.
(iii) Issued 9% Debentures of Rs.1,000.
7.
From the following information, Calculate Inventory Turnover Ratio, Operating Ratio, Gross Profit Ratio and ROI:
| Particulars | Rs |
|---|---|
| Opening Inventory | 28,000 |
| closing Inventory | 22,000 |
| Purchase of Stock-in-Trade | 46,000 |
| Revenue from operations | 80,000 |
| Carriage Inwards | 4,000 |
| Office Expenses | 4,000 |
| Selling & Distribution Expenses | 2,000 |
| Capital Employed | 2,00,000 |
8.
Current liabilities of a company are Rs.1,60,000. Its Liquid ratio is 1.5:1 and Current ratio is 2.1:1. Calculate Quick assets and Current assets.
9.
Calculate Current Ratio from the following information:
Inventory Turnover :4 times
Inventory in the beginning was Rs 20,000 less than Inventory at the end.
Revenue from Operation Rs.6,00,000.
Groos Profit Ratio 25%.
Current Liabilities Rs.60,000.
Quick Ratio 0.75:1.
1.
Higher inventory turnover ratio indicates that a unit of investment in stock is producing more sales.
2.
Short-term creditors like bankers and suppliers of material.
3.
Return on investment=(Rs.14,50,000\(\div\)Rs.8,80,000)X100=16.47%
Capital employed/Investment=Fixed Asset+working capital (i.e.,CA-CL)
Total Asset to Debt Ratio=Rs.1,15,00,000\(\div\)Rs.80,00,000 =1.43 times.
4.
(a) Liquid Ratio = 1.59: 1 (i.e.\(Rs.1,80,000\div 1,13,000\) )
(b) Inventory Turnover Ratio = 4.67 times (i.e., \(Rs.4,20,000\div 90,000\) ).
5.
(i) Increase: Reason: Long-term debts remains unchanged but shareholders' funds is increased.
(ii) No change: Reason: Neither the long-term debts nor shareholders' funds is affected.
6.
(i) No change: Reason: Neither Debt nor shareholders' fund is affected.
(ii) Decrease: Reason: Long-term debt remain same but shareholders' fund is increasing.
(iii) Increase: Reason: Long-term debts are increased but shareholders' funds remain unchanged.
7.
(i)Inventory Turnover Ratio 2.24times(i.e.,Rs.56,000 \(\div\)Rs.25,000)
(ii)Operating Ratio 77.5%(i.e.,Rs.62,000\(\div\)80,000X100).
(iii)Gross Profit Ratio 30%(i.e.,Rs.24,000\(\div\)80,000100),ROI 9% (i.e.,18,000\(\div\)2,00,000X100)
8.
Current assets Rs.4,00,000 (i.e., Rs.1,60,000X2.5), Quick assets Rs.2,40,000 (i.e., Rs.1,60,000X1.5).
9.
Liquid Assets Rs.45,000 (i.e., 75XRs.60,000), Closing Inventory Rs.1,22,500, Current Assets Rs.1,67,500 (i.e., Rs.45,000+Rs.1,22,500), Current Ratio 2.79:1 (i.e., \(Rs.1,67,500\div 60,000\) )
[Hints: (i) Cost of revenue from operations Rs.4,50,000 i.e., Rs.6,00,000 (Revenue from operations) - Rs 1,50,000 (G.P. i.e., 25% of Rs.6,00,000)
(ii) Average Inventory Rs.1,12,500 (i.e., \(Rs.4.50,000\div 4\) )]
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