Q1. What will be the current ratio of a company whose Net Working Capital is Zero ?
Q2. Why Loose Tools and Stores & Spares are not included in Current Assets while
calculating current ratio ?
Q3. A firm has current ratio of 3.5:1 and quick-ratio of 2:1 . Assuming inventory at ₹ 30,000
what will be the amount of current assets ?
Q4. The ……………………may indicate that the firm is experiencing stock outs and lost sales.
(a) Average payment period (b) Inventory turnover ratio
(c). Average Collection period (d) Quick ratio
Q5. A transaction involving a decrease in Debt-Equity Ratio and increase in Current Ratio is
(a) Redemption of Preference share (b) Issue of Debenture against
for cash the purchase of fixed assets
(c). Issue of Debenture for cash (d) Issue of shares for cash
Q6. A company’s Liquid Assets are ₹ 4,00,000 , Inventory is ₹ 2,10,000 , Prepaid Expenses
are ₹ 30,000 , Patents are ₹ 15,000 and Working Capital is ₹ 4,80,000 . Its Current Ratio will
be :-
(a) 2.5:1 (b) 3:1
(c). 4:1 (d) 1.33:1
Q7. On the basis of following data, the proprietary ratio of a Company will be :
Equity Share Capital ₹ 3,00,000 ; Debentures ₹ 90,000 ; Current Liabilities ₹ 30,000 ;
Statement of Profit & Loss Debit Balance ₹ 20,000
(a) 75% (b) 80%
(c). 70% (d) 82%
Q8. Opening Inventory ₹ 2,00,000 ; Closing Inventory ₹ 2,40,000 ; Purchases ₹ 42,00,000 ;
Wages ₹ 5,20,000 ; Carriage Inwards ₹ 60,000 ; Selling Expense ₹ 1,20,000 ; Revenue from
Operations ₹ 60,00,000 . Gross Profit Ratio will be :
(a) 26% (b) 29%
(c). 21% (d) 19%
Q9. Cash and Bank ₹ 40,000 , Trade Payable ₹ 1,00,000 , Trade Receivables ₹ 3,30,000 ,
Provision for Doubtful Debts ₹ 30,000 , Prepaid Expenses ₹ 10,000 and Inventory ₹
2,00,000 . Quick Ratio will be :
(a) 3.4:1 (b) 5.8:1
(c). 3.7:1 (d) 5.5:1
Q10. Calculate fixed assets from the following :-
Share Capital ₹ 7,00,000 ; Reserve & Surplus ₹ 3,00,000 ; Current Assets ₹ 1,50,000 ;
Proprietary Ratio 0.8:1:-
(a) ₹ 12,50,000 (b) ₹ 11,00,000
(c). ₹ 14,00,000 (d) ₹ 6,50,000
Q11.From the following information , calculate inventory turnover ratio; Revenue from
operations ₹ 16,00,000 ; Average Inventory ₹ 2,20,000 ; Gross Loss Ratio 5%. [CBSE 2016]
Q12. Calculate opening and closing trade receivables from the following information :
Trade Receivable Turnover Ratio 4 Times ; Cost of Revenue from Operations ₹ 3,20,000 ;
Gross Profit Ratio 20% ; Closing Trade Receivable were ₹ 15,000 more than the Opening
Trade Receivables ; Cash Revenue from Operations being 33 1/3 % of Credit Revenue from
Operations. [ CBSE 2019 ]
Q13. Calculate Current Ratio of a company from the following information :-
Inventory Turnover Ratio : 4 Times ; Inventory in the end was ₹ 20,000 more than inventory
in the beginning ; Revenue from operations ₹ 3,00,000 ; Gross Profit Ratio 25% ; Current
Liabilities ₹ 40,000 ; Quick Ratio 0.75:1 [ CBSE 2011 ]
Q14. From the following calculate, “Trade Receivable Turnover Ratio” :-
Total Revenue from Operation for the year is ₹ 8.40,000
Cash Revenue from Operation is 40% of Credit Revenue from opeations
Closing Trade Receivables is ₹ 2,00,000
Excess of Closing Trade Receivables over Opening Trade Receivables is ₹ 80,000 [CBSE 2016 ]
Q15. (a) The Quick Ratio of a company is 0.8:1 . State with the reason whether the following
transactions will increase, decrease or not change the quick ratio :-
(i) Purchase of loose tools ₹ 2,00,000
(ii) Insurance premium paid in advance ₹ 500
(iii) Honoured a bill payable ₹ 5,000 on maturity [ CBSE 2016]
(b) Assuming that the Debt to Equity Ratio is 2:1 , state giving reasons, which of the
following transactions would (i) increase (ii) Decrease (iii) Not alter Debt Equity Ratio
(i) Issue of new shares for cash
(ii) Conversion of debenture into equity shares
(iii) Sale of fixed asset at profit
(iv) Purchase of a fixed asset on long term deferred payment basis . [ CBSE 2012]
Q16. Revenue from operation ( Net Sales) ₹ 1,00,000 ; cost of Revenue from operation ( Cost
of Goods sold) was 80% of sales ; Equity Share Capital ₹ 7,00,000 ; General Reserve ₹
3,00,000 ; Operating Expenses ₹ 10,000 ; Quick Assets ₹ 6,00,000 ; 9% Debentures ₹
5,00,000 ; Closing Inventory ₹ 50,000 ; Prepaid Expenses ₹ 10,000 and Current Liabilities ₹
4,00,000.
Calculate the following Ratios :- (i) Operating ratios (ii) Return on Capital Employed (iii)
Current Ratio
