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Question
Revenue from Operations ₹ 4,00,000; Gross Profit Ratio 25%; Operating Ratio 90%. Non-operating Expenses ₹ 2,000; Non-operating Income ₹22,000. Calculate Net Profit Ratio.
Solution
Net Profit = Operating Profit + Non Operating Incomes − Non Operating Expenses
= 40,000 + 22,000 - 2,000
= Rs 60,000
Operating Profit Ratio = 100 − Operating Ratio
= 100 - 90 = 10%
Operating Profit = Sales × 10 %
= 4,00,000 × 10%
= Rs 40,000
Net Profit Ratio = `"Net Profit"/"Revenue from operations" xx 100`
`= 60000/400000 xx 100 = 15 %`
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Following is the Balance Sheet of Raj Oil Mills Limited as at March 31, 2017. Calculate Current Ratio.
| Particulars | (Rs) |
| I. Equity and Liabilities: | |
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1. Shareholders’ funds |
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a) Share capital |
7,90,000 |
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b) Reserves and surplus |
35,000 |
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2. Current Liabilities |
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a) Trade Payables |
72,000 |
| Total | 8,97,000 |
| II. Assets | |
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1. Non-current Assets |
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a) Fixed assets |
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Tangible assets |
7,53,000 |
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2. Current Assets |
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a) Inventories |
55,800 |
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b) Trade Receivables |
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c) Cash and cash equivalents |
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| Total | 8,97,000 |
Following is the Balance Sheet of Title Machine Ltd. as at March 31, 2017.
| Particulars |
Amount Rs. |
| I. Equity and Liabilities | |
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1. Shareholders’ funds |
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a) Share capital |
24,00,000 |
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b) Reserves and surplus |
6,00,000 |
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2. Non-current liabilities |
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a) Long-term borrowings |
9,00,000 |
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3. Current liabilities |
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a) Short-term borrowings |
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b) Trade payables |
23,40,000 |
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c) Short-term provisions |
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| Total | 69,00,000 |
| II. Assets | |
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1. Non-current Assets |
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a) Fixed assets |
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Tangible assets |
45,00,000 |
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2. Current Assets |
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a) Inventories |
12,00,000 |
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b) Trade receivables |
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c) Cash and cash equivalents |
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d) Short-term loans and advances |
72,000 |
| Total | 69,00,000 |
Calculate Current Ratio and Liquid Ratio.
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| ₹ | ₹ | |||
| Fixed Assets (Gross) | 8,40,000 | Current Assets | 3,50,000 | |
| Accumulated Depreciation | 1,40,000 | Current Liabilities | 2,80,000 | |
| Non-current Investments | 14,000 | 10% Long-term Borrowings | 4,20,000 | |
| Long-term Loans and Advances | 56,000 | Long-term Provisions | 1,40,000 |
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| ₹ | ₹ | |||
| Fixed Assets (Gross) | 6,00,000 | Accumulated Depreciation | 1,00,000 | |
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| ₹ | |
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| Inventory in the beginning of the year | 1,25,000 |
| Inventory at the close of the year | 1,75,000 |
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| ₹ | |
| Opening Inventory | 29,000 |
| Closing Inventory | 31,000 |
| Revenue from Operations, i.e., Sales | 3,20,000 |
| Gross Profit Ratio 25% | |
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