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प्रश्न
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.
उत्तर
Case 1
Trade Receivable Turnover Ratio = `"Net Credit Sales"/"Average Trade Receivables"`
Trade Receivable Turnover Ratio = `400000/100000` = 4 times
Case 2
Net Credit Sales = Total Sales −Cash Sales
= 30,00,000 − 6,00,000 = 24,00,000
Average Trade Receivable = `("Opening Trade Receivable + Closing Trade Receivable ")/2`
Average Trade Receivable = `(200000 + 600000)/2 = 400000`
Trade Receivable Turnover Ratio = `"Net Credit Sales"/"Average Trade Receivables"`
Trade Receivable Turnover Ratio = `2400000/400000` = 6 times
Case 3
Cost of Goods Sold = 3,00,000
Gross Profit = 25% on Cost
∴ Gross Profit =`25/100 xx 300000 = 75000`
Total Sales = Cost of Goods Sold + Gross Profit
= 3,00,000 + 75,000 = 3,75,000
Cash Sales = 20% of Total Sales
∴ Cash Sales = `375000 xx 20/100 = 75000`
Credit Sales = Total Sales − Cash Sales
= 3,75,000 − 75,000 = 3,00,000
Average Trade Receivable = `("Opening Trade Receivable + Closing Trade Receivable ")/2`
Average Trade Receivable = `(50000 + 100000)/2 = 75000`
Trade Receivable Turnover Ratio = `"Net Credit Sales"/"Average Trade Receivables"`
Trade Receivable Turnover Ratio = `300000/75000` = 4 times
Case 4
Let Sales be = x
Gross Profit = `x xx 20/100 = (20x)/100`
Sales = Cost of Goods Sold + Gross Profit
or, `x = 450000 + (20x)/100`
or, `x - 20/100 = 450000`
or,`x = (450000 xx 100)/80` = 562500
Sales = x = Rs 562500
Let Credit Sales be = a
Cash Sales = `a xx 25/100 = (25a)/100`
Sales = Cash Sales + Credit sales
or, `562500 = (25a)/100 + a`
or, `562500 = (125a)/100`
or,`a = (562500 xx 100)/125 = 450000`
Credit Sales = a = 450000
Average Trade Receivable = `("Opening Trade Receivable + Closing Trade Receivable ")/2`
Average Trade Receivable = `(90000 + 60000)/2 = 75000`
Trade Receivable Turnover Ratio = `"Net Credit Sales"/"Average Trade Receivables"`
Trade Receivable Turnover Ratio = `450000/75000` = 6 times
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संबंधित प्रश्न
The current ratio provides a better measure of overall liquidity only when a firm’s inventory cannot easily be converted into cash. If inventory is liquid, the quick ratio is a preferred measure of overall liquidity. Explain.
Current liabilities of a company are Rs 75,000. If current ratio is 4:1 and liquid ratio is 1:1, calculate value of current assets, liquid assets and inventory.
Ratio of Current Assets (₹3,00,000) to Current Liabilities (₹2,00,000) is 1.5:1. The accountant of the firm is interested in maintaing a Current Ratio of 2:1 by paying off a part of the Current Liabilities. Compute amount of the Current Liabilities that should be paid so that the Current Ratio at the level of 2:1 may be maintained.
Quick Assets ₹ 1,50,000; Inventory (Stock) ₹ 40,000; Prepaid Expenses ₹ 10,000; Working Capital ₹ 1,20,000. Calculate Current Ratio.
Capital Employed ₹8,00,000; Shareholders' Funds ₹2,00,000. Calculate Debt to Equity Ratio.
From the following Balance Sheet of ABC Ltd. as at 31st March, 2019, Calculate Debt to Equity Ratio:
|
Particulars |
₹ |
|
| I. EQUITY AND LIABILITIES | ||
|
1. Shareholder's Funds |
||
|
(a) Share Capital: |
||
|
(i) Equity Share Capital |
5,00,000 |
|
|
(ii) 10% Preference Share Capital |
5,00,000 |
10,00,000 |
|
(b) Reserves and Surplus |
2,40,000 |
|
|
2. Non-Current Liabilities |
||
|
Long-term Borrowings (Debentures) |
2,50,000 |
|
|
3. Current Liabilities : |
||
|
(a) Trade Payables |
4,30,000 |
|
|
(b) Other Current Liabilities |
20,000 |
|
|
(c) Short-term Provisions: Provision for Tax |
3,00,000 |
|
|
Total |
22,40,000 |
|
| II. ASSETS | ||
|
1. Non-Current Assets |
||
|
Fixed Assets: |
||
|
(i) Tangible Assets |
6,40,000 |
|
|
(ii) Intangible Assets |
1,00,000 |
|
|
2. Current Assets |
||
|
(a) Inventories |
7,50,000 |
|
|
(b) Trade Receivables |
6,40,000 |
|
|
(c) Cash and Cash Equivalents |
1,10,000 |
|
|
Total |
22,40,000 |
|
From the following information, calculate Proprietary Ratio:
|
Particulars |
Note No. |
Amount |
|
I. EQUITY AND LIABILITIES 1. Shareholders' Funds |
|
|
|
(a) Share Capital |
|
6,00,000 |
|
(b) Reserves and Surplus |
|
1,50,000 |
|
2. Current Liabilities |
|
|
|
(a) Trade Payables |
|
1,00,000 |
|
(b) Other Current Liabilities |
|
50,000 |
|
(c) Short-term Provisions (Provision for Tax) |
|
1,00,000 |
|
Total |
|
10,00,000 |
|
II. ASSETS |
|
|
|
1. Non-Current Assets |
|
|
|
Fixed Assets (Tangible Assets) |
|
5,00,000 |
|
2. Current Assets |
|
|
|
(a) Current Investments |
|
1,50,000 |
|
(b) Inventories |
|
1,00,000 |
|
(c) Trade Receivables |
|
1,50,000 |
|
(d) Cash and Cash Equivalents |
|
1,00,000 |
|
Total |
|
10,00,000 |
State with reason, whether the Proprietary Ratio will improve, decline or will not change because of the following transactions if Proprietary Ratio is 0.8 : 1:
(i) Obtained a loan of ₹ 5,00,000 from State Bank of India payable after five years.
(ii) Purchased machinery of ₹ 2,00,000 by cheque.
(iii) Redeemed 7% Redeemable Preference Shares ₹ 3,00,000.
(iv) Issued equity shares to the vendor of building purchased for ₹ 7,00,000.
(v) Redeemed 10% redeemable debentures of ₹ 6,00,000.
From the following Statement of Profit and Loss for the year ended 31st March, 2019 of Rex Ltd., calculate Inventory Turnover Ratio:
STATEMENT OF PROFIT AND LOSS
for the year ended 31st March, 2019
|
Particulars |
Note No. |
Amount (₹) |
| I. Revenue from Operations (Net Sales) |
6,00,000 |
|
| II. Expenses: | ||
|
(a) Purchases of Stock-in-Trade |
3,00,000 |
|
|
(b) Change in Inventory of Stock-in-Trade |
1 |
50,000 |
|
(c) Employees Benefit Expenses |
60,000 |
|
|
(d) Other Expenses |
2 |
45,000 |
| Total Expenses |
4,55,000 |
|
| III. Profit before Tax (I-II) |
1,45,000 |
|
| IV. Less: Tax |
45,000 |
|
| V. Profit after Tax (III-IV) |
1,00,000 |
Notes to Accounts
|
Particulars |
Amount (₹) |
| I. Change in Inventory of stock-in-Trade | |
|
Opening Inventory |
1,25,000 |
|
Less: Closing Inventory |
75,000 |
|
50,000 |
|
| 2. Other Expenses | |
|
Carriage Inwards |
15,000 |
|
Miscellaneous Expenses |
30,000 |
|
45,000 |
Revenue from Operations ₹ 9,00,000; Gross Profit 25% on Cost; Operating Expenses ₹ 45,000. Calculate Operating Profit Ratio.
Net Profit before Interest and Tax ₹4,00,000; 15% Long-term Debt ₹8,00,000; Shareholders' Funds ₹4,00,000. Calculate Return on Investment.
On the basis of the following information calculate:
(ii) Working Capital Turnover Ratio.
| Information: | ₹ | ₹ | |||
| Revenue from Operations: | (a) Cash Sales | 40,00,000 | Paid-up Share Capital | 17,00,000 | |
| (b) Credit Sales | 20,00,000 | 6% Debentures | 3,00,000 | ||
| Cost of Goods Sold | 35,00,000 | 9% Loan from Bank | 7,00,000 | ||
| Other Current Assets | 8,00,000 | Debentures Redemption Reserve | 3,00,000 | ||
| Current Liabilities | 4,00,000 | Closing Inventory | 1,00,000 |
Which of the following are included in traditional classification of ratios?
- Liquidity Ratios
- Statement of Profit and loss Ratios
- Balance Sheet Ratios
- Profitability Ratios
- Composite Ratios
- Solvency Ratios
Which are the ratios that comes under traditional basis of classification?
The current ratio is 2:1
State giving reasons which of the following transactions would improve, reduce and not change the current ratio.
"Payment of dividend."
Consider the following data and answer the question that follows:
| Particulars | ₹ |
| Revenue From Operations | 12,00,000 |
| Cost of Revenue from Operations | 9,00,000 |
| Operating Expenses | 15,000 |
| Inventory | 20,000 |
| Other Current Assets | 2,00,000 |
| Current Liabilities | 75,000 |
| aid up Share Capital | 4,00,000 |
| Statement of Profit and Loss (Dr.) | 47,500 |
| Total Debt | 2,50,000 |
What is the Debt to Equity Ratio?
Read the following information and answer the given question:
X Ltd. made a profit of 5,00,000 after consideration of the following items:
| ₹ | ||
| (i) | Goodwill written off | 5,000 |
| (ii) | Depreciation on Fixed Tangible Assets | 50,000 |
| (iii) | Loss on Sale of Fixed Tangible Assets (Machinery) |
20,000 |
| (iv) | Provision for Doubtful Debts | 10,000 |
| (v) | Gain on Sale of Fixed Tangible Assets (Land) | 7,500 |
Additional information:
| Particulars | 31.3.2019 (₹) |
31.3.2018 (₹) |
| Trade Receivables | 78,800 | 52,000 |
| Prepaid Expenses | 3,000 | 2,000 |
| Trade Payables | 51,000 | 30,000 |
| Expenses Payable | 20,000 | 34,000 |
How will goodwill written off be adjusted in the cash flow statement?
Pick the odd one out.
Read the following information and answer the given question:
| Year | 2020 | 2019 | 2018 |
| Amount | (in ₹) | (in ₹) | (in ₹) |
| Outstanding Expenses | 50,000 | 40,000 | 25,000 |
| Prepaid Expenses | 3,00,000 | 2,50,000 | 3,50,000 |
| Trade Payables | 18,00,000 | 16,00,000 | 14,00,000 |
| Inventory | 12,00,000 | 10,00,000 | 11,00,000 |
| Trade Receivables | 11,00,000 | 8,00,000 | 10,00,000 |
| Cash in hand | 17,00,000 | 12,00,000 | 15,00,000 |
| Revenue from operations | 24,00,000 | 18,00,000 | 20,00,000 |
| Gross Profit Ratio | 12% | 15% | 18% |
Quick Ratio for the year 2018 will be ______. (Choose the correct alternative)
