Advertisements
Advertisements
Question
Xolo Ltd.'s Liquidity Ratio is 2.5 : 1. Inventory is ₹ 6,00,000. Current Ratio is 4 : 1. Find out the Current Liabilities.
Solution
`"Current Ratio" = "Current Assets"/ "Current liability" = 4/1`
`"Quick Ratio" = "Quick Assets"/"Current Liabilities" = 2.5/1`
Let the Current Liabilities be = x
Current Assets = 4x
Quick Assets = 2.5x
Stock = Current Assets − Quick Assets
6,00,000 = 4x − 2.5x
or, x = 4,00,000
Current Liabilities = x = Rs 4,00,000
APPEARS IN
RELATED QUESTIONS
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.
Calculate the following ratio on the basis of following information:
(i) Gross Profit Ratio (ii) Current Ratio (iii) Acid Test Ratio (iv) Inventory Turnover Ratio (v) Fixed Assets Turnover Ratio
| Rs. | |
| Gross Profit | 50,000 |
| Revenue from Operations | 100,000 |
| Inventory | 15,000 |
| Trade Receivables | 27,500 |
| Cash and Cash Equivalents | 17,500 |
| Current Liabilities | 40,000 |
| Land & Building | 50,000 |
| Plant & Machinery | 30,000 |
| Furniture | 20,000 |
You are able to collect the following information about a company for two years:
|
|
|
2015-16 |
|
2016-17 |
|
Trade receivables on Apr. 01 |
Rs. |
4,00,000 |
Rs |
5,00,000 |
|
Trade receivables on Mar. 31 |
|
|
Rs |
5,60,000 |
|
Stock in trade on Mar. 31 |
Rs. |
6,00,000 |
Rs |
9,00,000 |
|
Revenue from operations (at gross profit of 25%) |
Rs. |
3,00,000 |
Rs |
24,00,000 |
Calculate Inventory Turnover Ratio and Trade Receivables Turnover Ratio.
From the following information, calculate the following ratios:
i) Quick Ratio
ii) Inventory Turnover Ratio
iii) Return on Investment
| Rs. | |
| Inventory in the beginning | 50,000 |
| Inventory at the end | 60,000 |
| Revenue from operations | 4,00,000 |
| Gross Profit | 1,94,000 |
| Cash and Cash Equivalents | 40,000 |
| Trade Receivables | 1,00,000 |
| Trade Payables | 1,90,000 |
| Other Current Liabilities | 70,000 |
| Share Capital | 2,00,000 |
| Reserves and Surplus | 1,40,000 |
(Balance in the Statement of Profit & Loss A/c)
From the following information, calculate Debt to Equity Ratio:
| ₹ | |
| 10,000 Equity Shares of ₹ 10 each fully paid | 1,00,000 |
| 5,000; 9% Preference Shares of ₹ 10 each fully paid | 50,000 |
| General Reserve | 45,000 |
| Surplus, i.e., Balance in Statement of Profit and Loss | 20,000 |
| 10% Debentures | 75,000 |
| Current Liabilities | 50,000 |
Debt to Equity Ratio of a company is 0.5:1. Which of the following suggestions would increase, decrease or not change it:
(i) Issue of Equity Shares:
(ii) Cash received from debtors:
(iii) Redemption of debentures;
(iv) Purchased goods on Credit?
From the following infromation, calculate Proprietary Ratio:
|
|
₹ |
| Equity Share Capital | 3,00,000 |
| Preference Share Capital | 1,50,000 |
| Reserves and Surplus | 75,000 |
| Debentures | 1,80,000 |
|
Trade Payables |
45,000 |
|
|
7,50,000 |
|
Fixed Assets |
3,75,000 |
| Short-term Inverstments | 2,25,000 |
|
Other Current Assets |
1,50,000 |
|
|
7,50,000 |
Calculate Inventory Turnover Ratio from the following information:
Opening Inventory ₹ 40,000; Purchases ₹ 3,20,000; and Closing Inventory ₹ 1,20,000.
State, giving reason, which of the following transactions would (i) increase, (ii) decrease, (iii) neither increase nor decrease the Inventory Turnover Ratio:
(a) Sale of goods for ₹ 40,000 (Cost ₹ 32,000).
(b) increase in the value of Closing Inventory by ₹ 40,000.
(c) Goods purchased for ₹ 80,000.
(d) Purchases Return ₹ 20,000.
(e) goods costing ₹ 10,000 withdrawn for personal use.
(f) Goods costing ₹ 20,000 distributed as free samples.
A firm normally has trade Receivables equal to two months' credit Sales. During the coming year it expects Credit Sales of ₹ 7,20,000 spread evenly over the year (12 months). What is the estimated amount of Trade Receivables at the end of the year?
Calculate Working Capital Turnover Ratio from the following information:
Revenue from Operations ₹ 30,00,000; Current Assets ₹ 12,50,000; Total Assets ₹ 20,00,000; Non-current Liabilities ₹ 10,00,000, Shareholders' Funds ₹ 5,00,000.
Compute Gross Profit Ratio from the following information:
Cost of Revenue from Operations (Cost of Goods Sold) ₹5,40,000; Revenue from Operations (Net Sales) ₹6,00,000.
Answer the following question:
The current ratio of a company is 2: 1. State giving reason whether the purchase of goods on credit will increase, decrease, or not change the ratio.
Which items are included in current assets to get the current ratio?
Which one of the following is correct?
- A ratio is an arithmetical relationship of one number to another number.
- Liquid ratio is also known as acid test ratio.
- Ideally accepted current ratio is 1: 1.
- Debt equity ratio is the relationship between outsider’s funds and shareholders’ funds.
Consider the following statements.
Statement 1 - "Profit and loss account shows the operating performance of an enterprise for a period of time".
Statement 2 - "The Profit and loss account describes the different business activities such as revenues and expenses".
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 working capital turnover ratio?
The ______ may indicate that the firm is experiencing stock outs and lost sales.
X Ltd. has a Debt-Equity Ratio of 3 : 1. According to the management, it should be maintained at 1 : 1. What are the choices in front of management to do so?
Amount from current assets is realised within ______.
______ ratios are a measure of the speed with which various accounts are converted into sales.
