Advertisements
Advertisements
प्रश्न
State giving reasons, which of the following transactions would improve, reduce or not change the Current Ratio, if Current Ratio of a company is (i) 1:1; or (ii) 0.8:1:
(a) Cash paid to Trade Payables.
(b) Purchase of Stock-in-Trade on credit.
(c) Purchase of Stock-in-Trade for cash.
(d) Payment of Dividend payable.
(e) Bills Payable discharged.
(f) Bills Receivable endorsed to a Creditor.
(g) Bills Receivable endorsed to a Creditor dishonoured.
उत्तर
(i) Let’s assume Current Assets as Rs 1,00,000 and Current Liabilities as Rs 1,00,000
`"Current Ratio" = "Current Assets"/ "Current liability"`
Current Ratio = `100000/100000 = 1: 1`
(a) Cash paid to Trade Payables (say Rs 50,000)
Current Ratio = `(100000 - 50000)/(100000 - 50000) = 1 : 1` (No change)
(b) Purchase of Stock-in-Trade on credit (say Rs 50,000)
Current Ratio = `(100000 + 50000)/(100000 + 50000) = 1 : 1` (No change)
(c) Purchase of Stock-in-Trade for cash (say Rs 50,000)
Current Ratio = `(100000 + 50000 - 50000)/100000 = 1 : 1` (No change)
(d) Payment of Dividend (say Rs 50,000)
Current Ratio = `(100000 - 50000)/(100000 - 50000) = 1 : 1` (No change)
(e) Bills Payable discharged (say Rs 50,000)
Current Ratio = `(100000 - 50000)/(100000 - 50000) = 1:1` (No change)
(f) Bills Receivable endorsed to a Creditor (say Rs 50,000)
Current Ratio = `(100000 - 50000)/(100000 - 50000) = 1:1` (No change)
(g) Bills Receivable endorsed to a Creditor dishonoured (say Rs 50,000)
Current Ratio = `(100000 + 50000)/(100000 + 50000) = 1:1` (No change)
(ii) Let’s assume Current Assets as Rs 80,000 and Current Liabilities as Rs 1,00,000
`"Current Ratio" = "Current Assets"/ "Current liability"`
Current Ratio =`80000/100000 = 0.8 : 1`
(a) Cash paid to Trade Payables (say Rs 50,000)
Current Ratio = `(80000 - 50000)/(100000 - 50000) = 0.6 : 1 ` (Reduce)
(b) Purchase of Stock-in-Trade on credit (say Rs 50,000)
Current Ratio = `(80000 + 50000)/(100000 + 50000) = 0.87 : 1 ` (Improve)
(c) Purchase of Stock-in-Trade for cash (say Rs 50,000)
Current Ratio = (80000 + 50000 - 50000)/100000 = 0.8 : 1 (No change)
(d) Payment of Dividend (say Rs 50,000)
Current Ratio = `(80000 - 50000)/(100000 - 50000) = 0.6 : 1 ` (Reduce)
(e) Bills Payable discharged (say Rs 50,000)
Current Ratio = `(80000 - 50000)/(100000 - 50000) = 0.6 : 1 ` (Reduce)
(f) Bills Receivable endorsed to a Creditor (say Rs 50,000)
Current Ratio = `(80000 - 50000)/(100000 - 50000) = 0.6 : 1 ` (Reduce)
(g) Bills Receivable endorsed to a Creditor dishonoured (say Rs 50,000)
Current Ratio = `(80000 + 50000)/(100000 + 50000) = 0.87 : 1 ` (Improve)
APPEARS IN
संबंधित प्रश्न
From the following compute Current Ratio:
| ₹ | ₹ | |||
| Trade Receivable (Sundry Debtors) | 1,80,000 | Bills Payable | 20,000 | |
| Prepaid Expenses | 40,000 | Sundry Creditors | 1,00,000 | |
| Cash and Cash Equivalents | 50,000 | Debentures | 4,00,000 | |
| Marketable Securities | 50,000 | Inventories | 80,000 | |
| Land and Building | 5,00,000 | Expenses Payable | 80,000 |
Quick Ratio of a company is 2:1. State giving reasons, which of the following transactions would
(i) improve, (ii) reduce, (iii) Not change the Quick Ratio:
(a) Purchase of goods for cash;
(b) Purchase of goods on credit;
(c) Sale of goods (costing ₹10,000) for ₹10,000;
(d) Sale of goods (costing ₹10,000) for ₹11,000;
(e) Cash received from Trade Receivables.
From the following calculate: (i) Current Ratio; and (ii) Quick Ratio:
| ₹ | ₹ | ||
| Total Debt | 6,00,000 | Long-term Borrowings | 2,00,000 |
| Total Assets | 8,00,000 | Long-term Provisions | 2,00,000 |
| Fixed Assests (Tangible) | 3,00,000 | Inventories | 95,000 |
| Non-current Investment | 50,000 | Prepaid Expenses | 5,000 |
| Long-term Loans and Advances | 50,000 |
Total Assets ₹12,50,000; Total Debts ₹10,00,000; Current Liabilities ₹5,00,000.
Calculate Debt to Equity Ratio.
From the following infromation, calculate Proprietary Ratio:
|
|
₹ |
| Equity Share Capital | 3,00,000 |
| Preference Share Capital | 1,50,000 |
| Reserves and Surplus | 75,000 |
| Debentures | 1,80,000 |
|
Trade Payables |
45,000 |
|
|
7,50,000 |
|
Fixed Assets |
3,75,000 |
| Short-term Inverstments | 2,25,000 |
|
Other Current Assets |
1,50,000 |
|
|
7,50,000 |
Cost of Revenue from Operations (Cost of Goods Sold) ₹5,00,000; Purchases ₹5,50,000; Opening Inventory ₹1,00,000.
Calculate Inventory Turnover Ratio.
From the following information, calculate value of Opening Inventory:
| Closing Inventory | = | ₹ 68,000 |
| Total Sales | = | ₹ 4,80,000 (including Cash Sales ₹ 1,20,000) |
| Total Purchases | = | ₹ 3,60,000 (including Credit Purchases ₹ 2,39,200) |
Goods are sold at a profit of 25% on cost.
Compute Trade Receivables Turnover Ratio from the following:
| 31st March 2018 (₹) | 31st March 2019 (₹) | |
| Revenue from Operations (Net Sales) | 8,00,000 | 7,00,000 |
| Debtors in the beginning of year | 83,000 | 1,17,000 |
| Debtors at the end of year | 1,17,000 | 83,000 |
| Sales Return | 1,00,000 | 50,000 |
Calculate Trade Receivables Turnover Ratio in each of the following alternative cases:
Case 1: Net Credit Sales ₹4,00,000; Average Trade Receivables ₹1,00,000.
Case 2: Revenue from Operations (Net Sales) ₹30,00,000; Cash Revenue from Operations, i.e., Cash Sales ₹6,00,000; Opening Trade Receivables ₹2,00,000; Closing Trade Receivables ₹6,00,000.
Case 3: Cost of Revenue from Operations or Cost of Goods Sold ₹3,00,000; Gross Profit on Cost 25%; Cash Sales 20% of Total Sales; Opening Trade Receivables ₹50,000; Closing Trade Receivables ₹1,00,000.
Case 4: Cost of Revenue from Operations or Cost of Goods Sold ₹4,50,000; Gross Profit on Sales 20%; Cash Sales 25% of Net Credit Sales, Opening Trade Receivables ₹90,000; Closing Trade Receivables ₹60,000.
Calculate Working Capital Turnover Ratio from the following information:
Revenue from Operations ₹ 30,00,000; Current Assets ₹ 12,50,000; Total Assets ₹ 20,00,000; Non-current Liabilities ₹ 10,00,000, Shareholders' Funds ₹ 5,00,000.
Calculate Current Ratio, Quick Ratio and Debt to Equity Ratio from the figures given below:
|
Particulars |
₹ |
||
|
Inventory |
30,000 |
||
| Prepaid Expenses | 2,000 | ||
| Other Current Assets | 50,000 | ||
| Current Liabilities | 40,000 | ||
| 12% Debentures | 30,000 | ||
| Accumulated Profits | 10,000 | ||
| Equity Share Capital | 1,00,000 | ||
|
Non-current Investments |
15,000 |
Calculate the amount of opening trade receivables and closing trade receivables from the following information:
Trade receivables turnover ratio 8 times
Cost of revenue from operations ₹ 4,80,000
The amount of credit revenue from operations is ₹ 2,00,000 more than cash revenue from operations. Gross profit ratio is 20%. Opening trade receivables are 1/4th of Closing trade receivables.
Choose the appropriate alternative from the given options:
Bishan and Sudha were partners in firm sharing profits and losses in the ratio of 5 : 3. Alena was admitted as a new partner. It was decided that the new profit sharing ratio of Bishan, Sudha, and Alena will be 10: 6: 5. The sacrificing ratio of Bishan and Sudha will be:
The most precise test of liquidity is:
Liquidity ratios includes which two types of ratios?
Interest Coverage Ratio can be calculated as ______?
The important activity ratios calculated under Activity (or Turnover) Ratios are ______?
Debtors (Receivables) Turnover Ratio can be calculated as ______?
Which one of the following is correct?
- Quick Ratio can be more than Current Ratio.
- High Inventory Turnover ratio is good for the organisation, except when goods are bought in small lots or sold quickly at low margins to realise cash.
- Sum of Operating Ratio and Operating Profit ratio is always 100%.
Determine Return on Investment and Net Assets Turnover ratio from the following information:
Profits after Tax were ₹ 6,00,000; Tax rate was 40%; 15% Debentures were of ₹20,00,000; 10% Bank Loan was ₹ 20,00,000; 12% Preference Share Capital ₹ 30,00,000; Equity Share Capital ₹ 40,00,000 ; Reserves and Surplus were ₹ 10,00,000; Sales ₹ 3,75,00,000 and Sales Return ₹ 15,00,000.
