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Question
Closing Trade Receivables ₹ 1,20,000, Revenue from Operations ₹ 14,40,000. Provision for Doubtful Debts ₹ 20,000. Calculate Trade Receivables Turnover Ratio.
Solution
Closing Trade Receivables = ₹ 1,20,000
Revenue from Operations = ₹ 14,40,000
Since, opening trade receivables have not been given we assume closing trade receivables to be our average trade receivables. Also, the revenue from operations will be assumed to be revenue from net credit sales.
Trade Receivables Turnover Ratio = Credit Revenue from Operations/Average Credit receivables
= 14,40,000/1,20,000 = 12 times
Therefore, this higher ratio indicates the rate at which the firm is able to collect its debt efficiently.
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The average age of inventory is viewed as the average length of time inventory is held by the firm for which explain with reasons.
Compute Gross Profit Ratio, Working Capital Turnover Ratio, Debt Equity Ratio and Proprietary Ratio from the following information:
|
|
Rs |
|
Paid-up Share Capital |
5,00,000 |
|
Current Assets |
4,00,000 |
|
Revenue from Operations |
10,00,000 |
|
13% Debentures |
2,00,000 |
|
Current Liabilities |
2,80,000 |
|
Cost of Revenue from Operations |
6,00,000 |
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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 |
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| ₹ | |
| 10,000 Equity Shares of ₹10 each | 1,00,000 |
| 8% Preference Shares | 70,000 |
| 10% Debentures | 50,000 |
| Long-term Loans from Bank | 50,000 |
| Interest on Long-term Loans from Bank | 5,000 |
| Profit after Tax | 75,000 |
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| 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 |
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| 1st April, 2018 ₹ |
31st March, 2019 ₹ |
|
| Sundry Creditors | 1,50,000 | 4,50,000 |
| Bills Payable | 50,000 | 1,50,000 |
Total Purchases ₹ 21,00,000; Purchases Return ₹ 1,00,000; Cash Purchases ₹ 4,00,000.
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(ii) Revenue from Operations, Cash Sales ₹4,00,000; Credit Sales ₹1,00,000; Gross Profit ₹1,00,000; Office and Selling Expenses ₹50,000. Calculate Operating Ratio.
Following information is given about a company:
| ₹ | ₹ | |||
| Revenue From Operations, i.e., Net Sales Gross Profit | 1,50,000 | Opening Inventory | 29,000 | |
| Cost of Revenue From Operations | 30,000 | Closing Inventory | 31,000 | |
| (Cost of Goods Sold) | 1,20,000 | Debtors | 16,000 |
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- Liquidity Ratios
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- Composite Ratios
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| ₹ | ||
| (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 |
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| 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 |
What will be the amount of Trade payables added to get the Cash flow from operations?
Liquid ratio is also known as ______.
