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Question
Net-Profit Ratio is equal to __________.
Options
Operating ratio
Operating net-profit ratio
Gross Profit Ratio
Current Ratio
Solution
Net-Profit Ratio is equal to Operating ratio.
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RELATED QUESTIONS
The current ratio of Z. Ltd is 1: 1. A state with reason which of the following transaction would
1. increase;
2. decrease or
3. not change the ratio.
1. Included in the trade payables was a bill payable of Rs 3,000 which was met on maturity
2. Debentures of Rs 50,000 were converted into Equity Share
State whether following statement is true or false.
Ratio Analysis is useful for inter-firm comparison.
Short Answer Question
What do you mean by Ratio Analysis?
Long Answer Question
What are liquidity ratios? Discuss the importance of current and liquid ratio.
Handa Ltd.has inventory of Rs 20,000. Total liquid assets are Rs 1,00,000 and quick ratio is 2:1. Calculate current ratio.
A company had a liquid ratio of 1.5: 1 and a current ratio of 2: 1. Its inventory turnover ratio was 6 times. It had total current assets of 2,00,000.
Find out revenue from operations if the goods are sold at a 25% profit on cost.
Current Ratio =`""/"Current Liabilities"`
Generally Current Ratio should be ___________.
Give one word/term/phrase for the following statement.
The ratio that establishes relationship between Quick Assets and Current Liabilities
State true or false with reason.
Activity Ratios Turnover Ratios are the same.
State true or false with reason.
Current Ratio measures the liquidity of the business.
State true or false with reason.
Usually current ratio should be 3:1.
Answer in one sentence only.
Give the formula of Gross Profit Ratio?
Answer in one sentence only.
Give the formula of gross profit?
Answer in one sentence only.
Give the formula of current ratio?
A Compay had the following Current Assets and Current Liabilities
| Debtors | ₹ 1,20000 | Creditors | ₹ 60,000 |
| Bills Payable | ₹ 40,000 | Stock | ₹ 60,000 |
| Loose Tools | ₹ 20,000 | Bank overdraft | ₹ 20,000 |
Calculate Current Ratio.
Current Liabilities = ₹ 3,00,000
Working Capital = ₹ 8,00,000
Inventory = ₹ 2,00,000
Calculate Quick Ratio.
Calculate Net Profit Ratio from the following
| Sales | ₹ 3,80,000 |
| Cost of good sold | ₹ 2,60,000 |
| Indirect Exp | ₹ 60,000 |
Calculate Operating Ratio
| Cost of good sold | ₹ 3,50,000 |
| Operating Exp. | ₹ 30,000 |
| Sales | ₹ 5,00,000 |
| Sales Return | ₹ 30,000 |
Calculate
| 1) Current Assets | ₹ 3,00,000 |
| 2) Current Liabilities | ₹ 1,00,000 |
What is current Ratio.
From the following Balance Sheet of Konal Traders prepare cash flow statement.
| Liabilities | 31.3.17 (₹) | 31.3.18 (₹) | Assets | 31.3.17 (₹) | 31.3.178 (₹) |
| Share Capital | 2,00,000 | 2,50,000 | Cash | 30,000 | 47,000 |
| Creditors | 70,000 | 45,000 | Debtors | 1,20,000 | 1,15,000 |
| Profit and Loss A/c | 10,000 | 23,000 | Stock | 80,000 | 90,000 |
| Land | 50,000 | 66,000 | |||
| 2,80,000 | 3,18,000 | 2,80,000 | 3,18,000 |
Accounting ratios are an important tool of ____________.
When the concept of ratio is defined in respect to the items shown in the financial statements, it is termed as:
When ratios are calculated on the basis of accounting information, they are called:
What are the advantages of Ratio Analysis?
What are the Limitations of Ratio Analysis?
Current Assets: ₹ 1,00,000. Current Liabilities : ₹ 60,000. Calculate Current Ratio.
______ ratios are calculated to determine the ability of the business to service its debt in the long run.
The debt equity ratio of M Ltd. is 2:1. State with reasons whether the following transaction will increase, decrease or not change the debt equity ratio :
- Obtained a loan from ICICI Bank ₹1,00,000 payable after 5 years.
- Purchased machinery for cash ₹1,50,000.
- Redeemed 9% debentures ₹1,00,000.
- Issued equity shares for purchase of machinery of ₹5,00,000 to the vendors.
Which one of the following statement is/are correct?
- Quick ratio is considered better than current ratio as a measure of liquidity position of business.
- Debt-equity ratio measures the short-term solvency of the business.
- Interest coverage ratio reveals the number of times interest on long-term debts is covered by the profits available for interest.
- A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It had total current assets of ₹ 8,00,000. Find out annual sales if goods are sold at 25% profit on cost.
- Calculate debt to capital employed ratio from the following information.
Shareholder funds ₹ 15,00,000 8% Debenture ₹ 7,50,000 Current liabilities ₹ 2,50,000 Non-current Assets ₹ 17,50,000 Current Assets ₹ 7,50,000
Do you agree or disagree with the following statements:
ROCE should be less than ROI.
Calculate operating ratio:
Cost of goods sold= ₹ 5,60,000, Operating expenses= ₹ 48,000,
Sales = ₹ 8,00,000, Sales Return= ₹ 48,000.
