Problems on Ratio Analysis

1. XYZ Ltd. supplies you following information regarding the year ending 31st, December 2006. Cash Rs 80000 Credit sales Rs 200000 Return inward Rs 10000 Opening stock Rs 25000 Closing stock Rs 30000 Gross profit ratio is 25%. Find out stock turnover ratio. 2. Given : Current ratio 2 : 5 and Liquidity ratio 1 : 5 . Also working capital Rs.60000 Calculate (a) current liabilites (b) current assets (c) Liquid assets (d) stock 3. Balance Sheet of Mr X and Mr. Y as on 31st December 2006 is Liabilities Amount Rs Assets Amount Rs Equity share capital 100000 Cash in hand 20000 7% debentures 100000 Cash at Bank 20,000 Bank overdraft 40,000 Bill receivables 100000 Creditors 60,000 Investment 10000 Profit and Loss A/c 20000 Debtors 50000 General reserve 30000 Stock 150000 350000 350000 ** Sales during the year 2006 were Rs 490000. Calculate stock turnover ratio.

44. From the following compute current ratio and quick ratio : Rs Fixed Assets 100000 Stock 30000 Debtors 20,000 Cash 40,000 Prepaid expenses 10,000 Creditors 30,000 Reserves 10,000 55. Find out working capital turnover ratio for the year. Cash 10,000 Bills receivable 5,000 Sundry debtors 25,000 Stock 20,000 Sundry creditors 30,000 Cost of sales 1,50,000 66. Calculate creditors turnover ratio and average age of payables Credit purchases during the year Rs 14,40,000 Closing creditors Rs 1,44,000 Closing Bill payables Rs 96,000 1 Current ratio 3 : 1, Quick ratio 1.67 : 1 2 3.27 times 3 (a) 40,000 (b) 100000 (c) 6000 (d) 40000 4 7.36 times
5 6
5 times 6 times and 2 months

77. Calculate creditors turnover ratio and debt payment period from the following information Cash purchases 1,00,000 Total purchases 4,07,000 Opening sundry creditors 25,000 Closing sundry creditors 50,000 Closing bill payables 25,000 Opening bill payables 20,000 Purchase returns 7,000 88. Find out (a) debtors turnover and (b) average collection period from the following information Annual credit sales 500000 Debtors in the beginning 80000 Debtors at the end 100000 Debt to be taken for the year = 360 days 99. From the following information calculate opening stock and closing stock: Sales during the year = Rs 2,00,000 Gross profit on sales = 50% Stock turnover ratio = 4 times Assume closing stock was Rs 10,000 more than the opening stock. 1010. Calculate stock turnover ratio from the following information: Opening stock Rs 45000 Closing stock Rs 55000 Purchases Rs 160000 1111. The balance sheet of ABCD Ltd. shows the following figures : Share capital Rs 152,000 Cash in hand and at Bank Rs 30,000 Fixed Assets Rs 113,000 Creditors Rs 20,000 5% Debentures Rs 24,000 Bill Payables Rs 4,000 Debtors Rs 18,000 Stock Rs 52,000 General reserve Rs 8,000 Profit and Loss A/c Rs 5,000 Calculate (i) current ratio and (ii) liquid ratio. 12. Calculate liquidity ratios from the following information : Total current assets Rs 90,000 Stock (included in current assets) Rs 30,000 Prepaid expenses Rs 3,000 Current liabilities Rs 60,000 1312. From the following, calculate the debt-equity ratio Equity Shares Capital 1,00,000 General Reserve 45,000 Accumulated Profits 30,000 Debentures 75,000
7 8 9 10 11 12
5 times and 73 days 5.56 times and 65 days Op. Stock = 20,000 and Cl. Stock = 30,000 3 times CR = 4.26 : 1 and QR = 2 : 1 3:7

1413

Sundry trade creditors 40,000 Outstanding expenses 10,000 Calculate the debt-equity ratio from the following data : Total Assets Rs1,20,000. Total debt Rs1,00,000

and current liabilities

Rs 60,000.

1514. From the following calculate the proprietary ratio : Equity share capital Preference share capital Reserves and surpluses Debentures Creditors Total Fixed assets Current Assets Investment Total 1,00,000 50,000 25,000 60,000 15,000 2,50,000 1,25,000 50,000 75,000 2,50,000

16.15 From the following detail of a business concern ascertain the gross profit ratio : Details 2005 2006 Sales 120,000 160,000 Gross profit 40,000 60,000 17. 16 Calculate the gross profit ratio from the following data : Sales Rs.3,25,000 sales returns Rs.25,000 and cost of goods sold 2,40,000

1817. Calculate Net profit ratio from the following : Net profit Rs 45,000 Sales Rs 640,000 Sales Returns Rs 40,000 1918. Calculate gross profit ratio and net profit ratio from the following figures. Sales Rs 150,000 Cost of goods sold Rs 120,000 Operating expenses Rs 12,000 2019. From the following details of a business concern ascertain the operating profit ratio Details 2005 2006 Sales 60,000 80,000 Interest on debentures 1,000 2,000 Net profit 3,800 6,000 2120. Calculate operating profit ratio from the following data : Sales 3,00,000 Gross profit 1,20,000 Administration expenses 35,000
13 14 15 16 17 18 19 20
2 70% 26.67% and 37 % 20% 7.5% 20% and 12% 10% 20%

Selling and distribution expenses 25,000 Income on investment 15,000 Loss by fire 9,000 2221. Following is the Balance sheet of X Ltd. . Liabilities Amount Share capital 20,00,000 Reserves 6,00,000 10% loan 10,00,000 Current liabilities 14,00,000 Profit for the year 5,00,000 55,00,000 Find out the return on investment for the year

Assets Amount Fixed Assets net 29,00,000 Current Assets 25,00,000 Underwriting commission 100,000 55,00,0000

2322. From the following data, calculate the return on capital employed : Net fixed assets Rs 100,000 current assets Rs 50,000, current liabilities Rs 25,000, Gross profit Rs 32,500, Interest on long-term debt Rs 7500 tax Rs 8750, office and administrative expenses Rs 2500, selling and distribution expenses Rs 5000. There were no long term investments. 2423. Given below is the Balance Sheet of M/s ABC Ltd, calculate return on investment (ROI). Liabilities Amount Assets Amount Equity share capital 10,00,000 Net fixed assets 15,00,000 Reserves 2,50,000 Current Assets 12,50,000 Profit for the year 2,50,000 Discount on issue of Debentures 50,000 10% debentures 5,00,000 Current liabilities 8,00,000 28,00,000 28,00,000

2524. From the following information find out capital gearing ratio. Source 2005 2006 Equity share capital 500,000 400,000 Reserves & surplus 300,000 200,000 8% preference share 250,000 300,000 6% Debentures 250,000 400,000 2625. Following particulars pertaining to assets and liabilities of a XYZ Ltd. are given :
Liabilities Equity share capital Preference share capital Reserves Debentures Current liabilities Amount 250000 200000 200000 300000 200000 1150000 21 22 23 24 25
15% 20% 15.4 % 8:7 (a) 1 : 1.3, (b) 1 : 1.77

Assets Land and Building Plant Stock Sundry debtors Cash Prepaid expenses

Amount 450000 400000 150000 100000 45000 5000 1150000

Calculate (a) debt equity ratio (b) proprietory ratio liquidity ratio