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    Ratio Analysis

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    sujan Bhandari
    This document contains several questions related to ratio analysis for a company. It provides financial information such as sales, costs, expenses, assets, liabilities, and equity and asks the reader to calculate various ratios based on the data including: gross profit ratio, net profit ratio, operating ratio, return on investment, current ratio, liquid ratio, stock turnover ratio, and debtors turnover ratio. Sample calculations are provided for some of the questions. The ratios are used to analyze the company's performance and financial position.

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    Ratio Analysis

    Uploaded by

    sujan Bhandari
    24 views1 page
    This document contains several questions related to ratio analysis for a company. It provides financial information such as sales, costs, expenses, assets, liabilities, and equity and asks the reader to calculate various ratios based on the data including: gross profit ratio, net profit ratio, operating ratio, return on investment, current ratio, liquid ratio, stock turnover ratio, and debtors turnover ratio. Sample calculations are provided for some of the questions. The ratios are used to analyze the company's performance and financial position.

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    This document contains several questions related to ratio analysis for a company. It provides financial information such as sales, costs, expenses, assets, liabilities, and equity and asks the reader to calculate various ratios based on the data including: gross profit ratio, net profit ratio, operating ratio, return on investment, current ratio, liquid ratio, stock turnover ratio, and debtors turnover ratio. Sample calculations are provided for some of the questions. The ratios are used to analyze the company's performance and financial position.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    24 views1 page

    Ratio Analysis

    Uploaded by

    sujan Bhandari
    This document contains several questions related to ratio analysis for a company. It provides financial information such as sales, costs, expenses, assets, liabilities, and equity and asks the reader to calculate various ratios based on the data including: gross profit ratio, net profit ratio, operating ratio, return on investment, current ratio, liquid ratio, stock turnover ratio, and debtors turnover ratio. Sample calculations are provided for some of the questions. The ratios are used to analyze the company's performance and financial position.

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    © All Rights Reserved
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    of 1

    Problems on Ratio Analysis:

    Q1. Calculate the Gross Profit ratio in the following case:


    (i) Sales = Rs 1, 20,000 and G/P is 20% on cost.
    (ii) Net Profit = Rs 20, 000; Selling and distribution expenses Rs. 4, 000; Income received = Rs. 1, 000; Sales Rs. 4, 00,
    000 and Sales Tax 10%.
    [ Ans: (i) 16.67 %. (iii) 6.38%.]
    Q2. Calculate Net Profit Ratio and Operating Ratio from the following information:
    Sales = Rs. 2, 00, 000; Cost of goods sold = Rs. 1, 40, 000; Operating Expenses = Rs. 20, 000; and
    Net Profit = Rs. 40, 000.
    [ Ans: N/P Ratio = 20% and Operating Ratio = 80% ]

    Q3. From the following information, calculate:


    (i) Net Profit Ratio. (ii) Return on Investment. (iii) Current Ratio. (iv) Liquid Ratio.
    Equity Share Capital Rs15,00,000; 12% Preference Share Capital Rs 3,00,000; 6% Debentures=Rs 2,00,000; Profit of the
    Year=Rs 4,00,000; Current Liabilities=Rs 10,00,000; Net Fixed Assets=Rs18,00,000 ;Liquid Assets=Rs 10,00,000; Net
    Sales = Rs 80,00,000 and Inventory = Rs 6,00,000.
    [ Ans: (i) 5%. (ii) 20%. (iii) 4:5. (iv) 1:1 ]

    Q5. Calculate Stock Turnover Ratio from the following information:


    Sales=Rs 2,20,000; Average stock=Rs.40,000; Sales Return=Rs.20,000 and Gross Profit= 20% on sale [ 4 times ]

    Q6. Stock Turnover Ratio = 6 times; Gross Profit 20% on sales; Sales Rs 1,80,000; Closing Stock is 15,000 in excess if opening
    stock. Calculate stock in the beginning and at the end.
    [ Ans: Op. Stock= Rs 16,500 and Cl. Stock=Rs 31,500]
    Q8. From the following information, calculate:
    (i) Gross Profit Ratio. (ii) Stock Turnover Ratio. (iii) Debtors Turnover Ratio.
    Sales Rs 1,50,000; Cost of goods sold Rs 1,20,000; Opening stock Rs 27,000; Closing stock Rs 33,000; Debtors Rs 14,000
    and Bill receivables Rs 6,000. [ Ans: (i) 20% (ii) 4 times (iii) 7.5 times ]

    Q9. Current liabilities of a company are Rs 1,50,000. Its current ratio is 3:1 and acid test ratio is 1:1. Calculate the value of
    current assets, liquid assets and stock. [ Ans: Rs 4,50,000; Rs 1,50,000 and Rs 3,00,000 ]

    Q12. The working capital of ABC Ltd has deteriorated in recent year and now stands as under:
    Current Assets Rs Current Liabilities Rs
    Inventory 5,60,000 Creditors 4,90,000
    Debtors 3,50,000 Bank Loan 2,10,000
    Cash 70,000
    9,80,000 7,00,000
    (a) Compute the current and quick ratios.
    (b) A further bank loan of Rs 50,000 against debtors is under negotiation. Assuming the loan is received; calculate the
    revised current and quick ratios.
    (c) There is also a negotiation going on for discounting the debtors of Rs. 3,50,000 for Rs 3,15,000 to a collection agency
    for immediate cash. Also obsolete stocks worth Rs 1, 25,000 are being sold for Rs 80,000. Of the cash to be realised by
    the two transactions, the bank loan is proposed to be reduced to Rs 1, 00,000. Calculate the current ratio after
    transactions are put through.
    [ Ans: (a) 1.4:1 and 0.6:1 ; (b) 1.37:1 and 0.63:1 ; (c) 1.34:1 and 0.6:1 ]

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