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Question
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 |
Solution
`"Gross Profit ratio" = "Gross profit"/"Net Revenue from operations"xx"100`
`"Gross profit" = "Net revenue from operations" - "Cost of revenue from operations"`
= `10,00,000 - 6,00,000`
= `4,00,000`
`"Gross profit ratio" = "4,00,000"/"10,00,000"xx" 100 = 40%`
`"Working capital ratio" = "Revenue from operaions"/"working capital"`
`"working capital" = "current assets" - "Current Liablities" `
=`"4,00,000 - 2,80,000"`
= `1,20,000`
`"working capital ratio" = "10,00,000"/"1,20,000"`
= `8.33 "times".`
`"Debt equity ratio" = "Debt"/"equity"`
= `"2,00,000"/"5.00,000" = 2 : 5 = 0.4 : 1`
`"Proprietary Ratio"="shareholders funds"/"total assets"`
`"Total asset" = "Paid up Capital + Debentures + Current Liablities"`
(:. `"Total Liablities = Total assets"`)
=`5,00,000 + 2,00,000 + 2,80,000`
= `9,80,000`
`"Propriertary ratio" = "5,00,000"/"9,80,000" = 25:49 = 0.51 : 1`
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| Particulars | Note No. | Rs. |
| I. Equity and Liabilities: | ||
| 1. Shareholders’ funds | ||
| a) Share capital | 10,00,000 | |
| b) Reserves and surplus | 9,00,000 | |
| 2. Non-current Liabilities | ||
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| 3. Current Liabilities | ||
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| ₹ | ₹ | |||
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| ₹ | ₹ | |||
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| ₹ | |
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