RATIOS

1. Calculate (a). Gross Profit Ratio (b).Net Profit Ratio c) operating profit d) Stock Turnover in days
from the following:
Sales Rs.10,00,000 Gross Profit 25% on cost
Office expenses Rs. 2,00,000 Opening stock 45000 and closing stock is 15000 more than opening
stock. Selling expenses Rs. 50,000 Interest 10000.

2. Calculate (a) Gross Profit Ratio (b) Net Profit Ratio (c) Operating Ratio and (d) ROI
Profit Ratio from the following: Rs.
Sales 5,00,000
Cost of goods sold 3,00,000
Operating Expenses 1,00,000
Non-operating expenses 20,000 Interest 10000

3. Calculate Stock Turnover Ratio,Drs Turnover and creditor turnover and fixed asset turnover ratios
from the given:
Opening stock Rs.28,000 opening debtors 23000 opening bill receivables 5000 closing drs 29000
Closing Stock Rs.32,000 opening creditors 21000 and closing creditors 28000
Sales Rs.3,20,000,Fixed asset 280000
Gross Profit Ratio 25% on sales.

4. Interest on debentures is Rs.32,000 and Net Profit after tax is Rs.160,000. Capital 300000.Reservs
80000 Preference capital 100000. Preference dividend 10000. Tax 40000.
Calculate Interest Coverage Ratio, ROI , ROCE, Return on Equity Capital.

5.Calculate Interest coverage Ratio and Dividend coverage ratio P/E ratio and Dividend yield ratio
from the given information:
Net Profit after interest and taxes Rs.6,00,000, Equity dividend Rs.16500. Equity 4000000.
Income tax Rs.5,00,000 Interest Rs. 92,000
Preference Dividend Rs. 64,000. Market price 25 Equity capital 10000 @20 each.

6.If Inventory Turnover Ratio is 5 times and average stock at cost is Rs.75,000, find out cost of
goods sold. Opening stock is 10000 less than closing stock. Find purchases. If the creditors turnover is
3 months what will be the creditors.

Find out Debtors turnover ratio from the following:

Annual Credit Sales Rs.25,000, Returns Rs. 1,000 Debtors Rs. 3,000 Bills Receivable Rs. 1,000.

7. Find out (a) Debtors Turnover, and (b) Average collection period c)creditors turnover d) Creditors
payment period from the following information:
Annual Credit sales 5,00,000 Total purchases 320000. Cash purchases 35000
Debtors in the beginning 80,000 opening creditors 72000
Debtors at the end 1,00,000 closing creditors 58000
Days to be taken for the year: 360
8. From the following information, calculate average collection period:
Total Sales 1,00,000 Cash Sales 20,000 Sales Returns 7,000 Total Debtors at the end of the year
11,000 Bills Receivable 4,000

From the following information, calculate Creditors turnover ratio and average payment
period: Rs. Total Purchases 4,00,000 Cash purchases 50,000 Purchases Returns 20,000
Creditors at the end 60,000, Bills Payable at the end 20,000 Take 365 days in a year.

9. Find out Working Capital Turnover ratio, Current ratio, Quick Ratio and Cash ratio for the
following:
Cash 10,000 Bills Receivable 5,000
Sundry debtors 25,000,Land and building 200000,opening stock 18000
Stock 20,000 Sundry creditors 30,000 Cost of sales 1,50,000. Gross profit 20% on cost

10.You are supplied with the following information from the records of M/s Anand Prabhat Ltd.
for the year ending Dec,31, 2009. Rs.
Trade debtors at the end of the year 90,000 Trade creditors in the beginning of the year 25,000
Trade creditors at the end of the year 45,000 Net working capital 1,20,000
Stock turnover ration 5 times Sales for the year 5,00,000 Gross profit ratio 20% on sales
Calculate:
a) Average Stock; b) Purchases; c) Average Payment Period; d) Average Collection Period;
e) Working Capital Turnover Ratio.

11.Balance sheet of a company shows the following contents:

Equity Shares of Rs.100 each Rs.2,00,000 9% Preference Shares of Rs.100 each Rs.1,00,000
10% Debentures of Rs.100 each Rs.1,00,000 General Reserve Rs.1,00,000
Calculate Debt-Equity Ratio.

Following information is available of a company. Calculate ROI, Return on Equity and Return on
Equity Capital. 10,000 equity shares of Rs.10 each Rs.8 paid Rs. 80,000
11% Preference shares of Rs.20 each 1,00,000
Profit before tax 80,000 Rate of tax 50%.

12.Calculate (1) Current Ratio (2) Acid Test Ratio, 3.Drs turnover 4)creditor turnover from the
following details:
Cash in hand Rs. 6,000 Cast at Bank Rs.1,30,000 sales 630000 G.P 25% on sales
Bills Receivable Rs. 20,000 closing Stock Rs.2,40,000 opening stock 190000
Debtors Rs.1,60,000 Prepaid Expenses Rs. 4,000
Sundry Creditors Rs.2,40,000 Bills Payable Rs. 40,000.

13. Compute the Pay-out ratio, EPS, P/E ratio and ROI from the following details:
No. of equity shares 3,000@10 each Reserves 4000 Retained earnings 2500
Dividend per equity share Rs.0.40 market price per share 12
Net profit before tax Rs.10,000
Provision for tax Rs. 5,000
Preference dividend Rs. 2,000.

14. A company’s equity shares are being traded in the market at Rs.48 per share with a price earning
ratio of 8. The company’s dividend payout is 80%. It has 1,00,0000 equity shares of
Rs.10 each and no preference shares. Book value per share is Rs.40.
Calculate: i) Earnings per share; ii) Net income; iii) Dividend yield; and iv) Return on equity.
15. Calculate (a). Gross Profit Ratio (b).Net Profit Ratio c) Interest coverage ratio d)ROE. from the
following:
Sales Rs.10,00,000 G.P 25% mark up.Equity 40000 shares @ 10 each
Office expenses Rs. 1,00,000 Selling expenses Rs. 30,000 Interest 25000 Tax 20%

16. Calculate (a) Gross Profit Ratio (b) Net Profit Ratio (c) Operating Ratio and (d) Operating
Profit Ratio from the following: Rs.
Cost of goods sold 3,00,000 G.P 25% mark up
Operating Expenses 1,00,000 Non-operating expenses 20,000 interest 15000

17. Calculate Stock Turnover Ratio Gross profit, Net profit and fixed asset turnover ratio from the
given:
Opening stock Rs.28,000 Closing Stock Rs.32,000 Operating exp 82000 non operating exp 18000
(including interest 9500).Sales Rs.3,20,000 Gross Profit Ratio 25% on mark up.

18.Calculate Interest coverage Ratio and Dividend payout and dividend yield and EPS and Find
market price if P/E ratios is 8 times from the given information:
Net Profit before interest and taxes Rs.6,00,000
Income tax 35%
Interest Rs. 92,000
Preference Dividend Rs. 64,000.

19.If Inventory Turnover Ratio is 7 times and opening stock is 5000 more than closing stock, if the
sales is 4000000 and Gross profit is 25% margin find out cost of goods sold opening stock, closing
stock and purchases.

Find out Debtors turnover ratio from the following:

Annual Credit Sales Rs.80,000, Returns Rs. 4,000 Debtors Rs. 13,000 Bills Receivable Rs. 7,000.

20. From the following information, calculate average collection period:

Total Sales 1,00,000 Cash Sales 20%
Sales Returns 7,000 Total Debtors at the end of the year 35,000

From the following information, calculate Creditors turnover ratio and average payment
period: Rs.
Total Purchases 4,00,000 Cash purchases 50%
Purchases Returns 20,000 Creditors at the end 60,000 Bills Payable at the end 30,000

21. Find out fixed asset turnover ratio, Working Capital Turnover ratio, debtor turnover ratio and
creditor turnover ratio for the following:.
Cash 20,000 Bills Receivable 35,000
Sundry debtors 50,000 Stock 70,000
Sundry creditors 60,000 sales 2,50,000. G.P 25% margin
sundry debtors at the beginning of the year 90,000
sundry creditors in the beginning of the year 55,000
Sales for the year 5,00,000
22. Following information is available of a company. Calculate (1) Average Collection
period. (2) Debt-Equity Ratio (3) Current Ratio (4) QuickRatio,
Equity Shares of Rs.100 each $.2,00,000
10% Debentures of Rs.100 each $.1,00,000
General Reserve $.1,00,000
P/L account $ 80,000
Cash in hand $. 6,000
Cast at Bank $.1,30,000
Bills Receivable $. 20,000
Stock $.2,40,000
Debtors $.1,60,000
Prepaid Expenses $. 4,000
Sundry Creditors $ .2,40,000
Bills Payable $ . 40,000 and Credit Sales is $. 9,00,000.

23. Following is the Balance Sheet of Rohit and Co. as on March 31, 2006
Liabilities Amount Assets Amount
Rs. Rs.
Share Capital 1,90,000 Fixed Assets 1,53,000
Reserves 12,500 Stock 55,800
Profit and Loss 22,500 Debtors 28,800
Bills Payables 18,000 Cash at Bank 59,400
Creditors 54,000
2,97,000 2,97,000
Calculate Current Ratio, Liquid ratio, Working capital, Debt Equity

24. Following is the Balance Sheet of Title Machine Ltd. as on March 31, 2006.
Liabilities Amount Assets Amount
Rs. Rs.
Equity Share Capital 24,000 Buildings 45,000
8% Debentures 9,000 Stock 12,000
Profit and Loss 6,000 Debtors 9,000
Bank Overdraft 6,000 Cash in Hand 2,280
Creditor 23,400 Prepaid Expenses 720
Provision for Taxation 600
69,000 69,000
Calculate Capital Gearing Ratio Current Ratio and Liquid Ratio cash ratio and
working capital.

25. Current Ratio is 3:5. Working Capital is Rs. 9,00,000. Calculate the amount
of Current Assets and Current Liabilities.

Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is
36,000, calculate current liabilities and current assets.

26. 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
stock.

Honda Ltd.has stock of Rs. 20,000. Total liquid assets are Rs. 1,00,000 and
quick ratio is 2:1. Calculate current ratio.
27. Calculate debt equity ratio from the following information:
Total Assets Rs. 15,00,000 Current Liabilities Rs. 6,00,000
Total Debts Rs. 12,00,000

Calculate Current Ratio if Stock is Rs. 6,00,000; Liquid Assets Rs. 24,00,000;
Quick Ratio 2:1.

28. Compute activity ratios from the following information:

total Sales Rs. 2,00,000 opening Debtors 75000 closing debtors 90000
Gross Profit Rs. 50,000 cash sales 28000,working capital 192000,fixed assets
540000 Closing Stock Rs. 60,000 Excess of Closing Stock over Opening Stock Rs.
20,000

29. Calculate following ratios from the following information:

(i) Current ratio (ii) Acid test ratio (iii) Operating Ratio (iv) Gross Profit
Ratio
Current Assets Rs. 35,000 (including stock 15000) Current Liabilities Rs.
17,500 Operating Expenses Rs. 20,000 Sales Rs. 60,000 Cost of Goods Sold Rs.
45,000

30. From the following information calculate:

(i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv)
Net Profit Ratio (v) Working capital Ratio:
Sales Rs. 25,20,000
Net Profit Rs. 3,60,000
Cast of Sales Rs. 19,20,000
Long-term Debt Rs. 9,00,000
Creditors Rs. 2,00,000
Average Inventory Rs. 8,00,000
Current Assets Rs. 7,60,000
Fixed Assets Rs. 14,40,000
Current Liabilities Rs. 6,00,000
Net Profit before Interest and Tax Rs. 8,00,000

31. Compute Gross Profit Ratio, Working Capital Turnover Ratio, Debt Equity
Ratio
and Proprietary Ratio from the following information:
Paid-up Capital Rs. 5,00,000
Current Assets Rs. 4,00,000
Net Sales Rs. 10,00,000
13% Debentures Rs. 2,00,000
Current Liability Rs. 2,80,000
Cost of Goods Sold Rs. 6,00,000

32. Calculate Stock Turnover Ratio if:

Opening Stock is Rs. 76,250, Closing Stock is 98,500, Sales is Rs. 5,20,000,
Sales Return is Rs. 20,000, Purchases is Rs. 3,22,250.

Calculate Stock Turnover Ratio from the data given below:

Stock at the beginning of the year Rs. 10,000
Stock at the end of the year Rs. 5,000 Carriage Rs. 2,500
Sales Rs. 50,000 Purchases Rs. 25,000
33. A trading firm’s average stock is Rs. 20,000 (cost). If the stock turnover
ratio is 8 times and the firm sell goods at a profit of 20% on sale, ascertain
the profit of the firm. Opening stock is 6000 more than closing stock. If
creditors turnover ratio is 3 months what will be the creditors.

34. You are given the following information about a company for two years:
2004 2005
Book Debts on Apr. 01 Rs. 4,00,000 Rs. 5,60,000
Book Debts on Mar. 30 Rs. 5,60,000 Rs. 4,20,000
Stock in trade on Mar. 31 Rs. 6,00,000 Rs. 9,00,000
Sales (at gross profit of 25%) Rs. 3,00,000 Rs. 24,00,000
Calculate Stock Turnover Ratio and Debtor Turnover Ratio for both years.

35. The following Balance Sheet and other information, calculate maximum
ratios: sales 570000.
Liabilities Amount Assets Amount
Rs. Rs.
General Reserve 80,000 Preliminary Expenses 20,000
Profit and Loss 1,20,000 Cash 1,00,000
Loan @15% 2,40,000 Stock 80,000
Bills Payable 20,000 Bills Receivables 40,000
Creditors 80,000 Debtors 1,40,000
Share Capital 2,00,000 Fixed Assets 3,60,000
7,40,000 7,40,000

36. The following is the summerised Profit and Loss account and the Balance
Sheet
of Nigam Limited for the year ended March 31, 2007 :
Expenses/Losses Amount Revenue/Gains Amount
Rs. Rs.
Opening Stock 50,000 Sales 4,00,000
Purchases 2,00,000 Closing Stock 60,000
Direct Expenses 16,000
Gross Profit 1,94,000
4,60,000 4,60,000
Salary 48,000 Gross Profit 1,94,000
Loss on Sale of Furniture 6,000
Net Profit 1,40,000
1,94,000 1,94,000
Balance Sheet of Nigam Limited as on March 31, 2007
Liabilities Amount Assets Amount
Rs. Rs.
Profit and Loss 1,40,000 Stock 60,000
Creditors 1,90,000 Land 4,00,000
Equity Share Capital 2,00,000 Cash 40,000
Outstanding Expenses 70,000 Debtors 1,00,000
6,00,000 6,00,000
Calculate all the ratios.

37. From the following, calculate (a) Debt Equity Ratio (b) Total Assets to
Debt Ratio (c) Proprietary Ratio.
Equity Share Capital Rs. 75,000
Preference Share Capital Rs. 25,000
General Reserve Rs. 50,000
Accumulated Profits Rs. 30,000
Debentures Rs. 75,000
Sundry Creditors Rs. 40,000
Outstanding Expenses Rs. 10,000
Preliminary Expenses to be written-off Rs. 5,000

38. The following is the summerised transactions and Profit and Loss Account
for the year ending March 31, 2007 and the Balance Sheet as on that date.
Expenses/Losses Amount Revenue/Gains Amount
Rs. Rs.
Opening Stock 5,000 Sales 50,000
Purchases 25,000 Closing Stock 7,500
Direct Expenses 2,500
Gross Profit 25,000
57,500 57,500

Administrative Expenses 7,500 Gross Profit 25,000

Interest 1,500
Selling Expenses 6,000
Net Profit 10,000
25,000 25,000
Liabilities Amount Assets Amount
Rs. Rs.
Share Capital 50,000 Land and Building 25,000
Current Liabilities 20,000 Plant and Machinery 15,000
Profit and Loss 10,000 Stock 7,500
Sundry Debtors 7,500
Bills Receivables 6,250
Cash in Hand 8,750
Furniture 10,000
80,000 80,000
Calculate all the ratios.

39. From the following information calculate Gross Profit Ratio, Stock Turnover
Ratio and Debtors Turnover Ratio.
Sales Rs. 3,00,000
Cost of Gods Sold Rs. 2,40,000
Closing Stock Rs. 62,000
Gross Profit Rs. 60,000
Opening Stock Rs. 58,000
Debtors Rs. 32,000

40. The following are the extracts from the financial statements of Active Ltd, as on 31-03-2005.

Stock 10,000 Debtors 20,000

Bills Receivable 10,000 Advances (recoverable in cash) 2,000
Cash 18,000 Creditors 25,000 Bills Payable 15,000
9% Debentures 5,00,000 Sales for the Year 3,50,000 Gross Profit 70,000

(i) Current Ratio (ii) Liquidity (iii) Stock Turnover Ratio (iv) Debtors Turnover Ratio (v) Gross Profit
Ratio (vi) Stock to Working Capital Ratio.
41. The following are the extracts from the financial statements of Active Ltd, as on 31-03-2005.

Rs.
Stock 10,000
Debtors 20,000
Bills Receivables 10,000
Advantages (recoverable in cash) 2,000
Cash 18,000
Creditors 25,000
 Bills Payable 15,000
Bank Over draft 0
9% Debentures 5,00,000
Sales for the Year 3,50,000
Gross Profit 70,000

You are required to compute for both the years

(i) Current Ratio (ii) Liquidity (iii) Stock Turnover Ratio (iv) Debtors Turnover Ratio (v) Gross Profit
Ratio (vi) Stock Working Capital Ratio.

42. Calculate (a) Gross Profit Ratio (b) Operating Ratio (c) Stock Turnover Ratio (d) Interest
Coverage Ratio from the following:
Sales 5,00,000, Cost of goods sold 3,00,000, Operating Expenses 1,00,000, Non-
operating expenses 20,000, Opening stock 28,000, Closing Stock 32,000, Interest on
debentures is 32,000 and Net Profit after interest is 48,000.

43. Recent Financial statements of Madison Corp. a company that sells drilling equipment are given
below: Balance sheet June30,2012

Assets Amount $ Liabilities Amount $

Stock 300,000 Equity Capital @ 10 $
Accounts Receivables 160,000 per share 200,000
Bank 21,000 10%debentures 300,000
Prepaid exp 9,000 Current creditors 200,000
Property and Retained earning 600,000
Equipment 810,000

Total 1,300,000 Total 1,300,000

Income statement: ($ in ‘000)
Particulars June 30. ($)
Sales 2,100,000
cost of goods sold 1,260,000
Selling & Admin expenses 6,60,000
interest exp 30,000
Taxes 45,000
Account balances at the end of the year-Stock $260,000 and account receivables 140,000. Find all
ratios.

44. From the following information calculate maximum ratios

Assets Amount Liabilities Amount.
Land and buildings 1,40,000 Share capital 2,00,000
Plant 3,50,000 Profit 30,000
Stock 2,00,000 Reserve 40,000
Debtors 90,000 Debentures 4,00,000
Bills receivable 20,000 Creditors 1,20,000
Cash 40,000 Bills Payable 50,000
------------- -------------
8,40,000 8,40,000
________ _________
Sales 720000, G.P 25% on sales N.P is 15% of sales. Interest paid on debentures 20000.

45. Following information is available of a company. Calculate maximum ratios

Equity Shares of Rs.100 each Rs.2,00,000
10% Debentures of Rs.100 each Rs.1,00,000
General Reserve Rs.1,00,000 P/L account 80,000
Cash in hand Rs. 6,000, Cash at Bank Rs.1,30,000
Account Receivable Rs. 180,000
Closing Stock Rs.2,40,000 opening stock 200000
Prepaid Expenses Rs. 4,000
Sundry Creditors Rs.2,40,000 and credit sales is 9,00,000 total sales 1000000. G.P 200000
and net profit 140000 interest on debentures 10000

46.Balance sheet of a company shows the following contents:

Equity Shares of Rs.100 each Rs.2,00,000
9% Preference Shares of Rs.100 each Rs.1,00,000
10% Debentures of Rs.100 each Rs.1,00,000
General Reserve Rs.1,00,000
Calculate Debt-Equity Ratio.

47.Following information is available of a company. Calculate Return on Equity Capital.

10,000 equity shares of Rs.10 each Rs.8 paid Rs. 80,000
11% Preference shares of Rs.20 each 1,00,000
Profit before tax 80,000
Rate of tax 50%.

48.Calculate (1) Current Ratio (2) Acid Test Ratio, from the following details:
Cash in hand Rs. 6,000
Cast at Bank Rs.1,30,000
Bills Receivable Rs. 20,000
Stock Rs.2,40,000
Debtors Rs.1,60,000
Prepaid Expenses Rs. 4,000
Sundry Creditors Rs.2,40,000
Bills Payable Rs. 40,000.

49.Compute the Pay-out ratio, EPS and market price if the P/E ratio is 10 times from the following
details:
No. of equity shares 3,000of 10 each
Dividend per equity share Rs.0.40
Net profit Rs.10,000
Provision for tax Rs. 5,000
Preference dividend Rs. 2,000.

50. A company’s equity shares are being traded in the market at Rs.48 per share with a price earning
ratio of 8. The company’s dividend payout is 80%. It has 1,00,000 equity shares of
Rs.10 each and no preference shares. Book value per share is Rs.40.
Calculate: i) Earnings per share; ii) Net income;
iii) Dividend yield; and iv) Return on equity.

51. Calculate: Stock Turnover Ratio, Creditors turnover ratio , average payment period, average
collection period: Opening stock Rs.28,000, Closing Stock Rs.32,000, Sales Rs.3,20,000,Gross Profit
Ratio 25% on sales. Cash Sales 20,000, Total Debtors at the end of the year 11,000
Total Purchases 4,00,000, Cash purchases 50,000, Purchases Returns 20,000 Creditors at the end
60,000 Take 365 days in a year.
52.Calculate (1) Current Ratio (2) Acid Test Ratio, from the following details:
Cash in hand Rs. 16,000
Cast at Bank Rs.1,60,000
Bills Receivable Rs. 120,000
Stock Rs.4,40,000
Debtors Rs.60,000
Prepaid Expenses Rs.14,000
Sundry Creditors Rs.1,40,000
Bills Payable Rs. 30,000.

53.Compute the EPS, P/E ratio, Dividend yield ratio and Pay-out ratio form the following details:
No. of equity shares 30,000 @ 100
Dividend per equity share Rs.1 market price per share 98
Net profit Rs.300,000
Provision for tax Rs. 45,000
9%Preference capital Rs. 2,00,000.

54. A company’s equity shares are being traded in the market at Rs.88 per share with a price earning
ratio of 8. The company’s dividend payout is 100%. It has 2,00,0000 equity shares of
Rs.20 each and 10% preference shares 1000 of 100 each. Book value per share is Rs.40.
Calculate: i) Earnings per share; ii) Net income; iii) Dividend yield; and iv) Return on equity v. P/E
ratio.

56. Recent Financial statements of LAYLO Corp. a company that sells drilling equipment are given
below: Selected Year-ended financial statements of McCord Corporation follow.
(Note: All Sales are on credit; selected balance sheet amounts at December 31,2014, were stock $
32,400 AccountsReceivables 32500 and accounts payable 20000.;
McCord Corporation Balance sheet December 31,2015

Assets Amount Liabilities Amount

$ $
Cash 9000 Accounts Payable 16,500
Short-term Investments 7,400 Accrued Wages Payable 2,200
Accounts Receivables 28,200 Income Taxes Payable 2,300
Notes Receivable(trade) 3,500 Long –term loan 62,400
Prepaid exp 1,650 Equity stock $ 1 par value 90,000
Plant assets, net 1,52,300 Retained earnings 59,800
Stock 31,150
Total 2,33,200
Total 2,33,200

Income statement: ($ in ‘000) For the Year Ended Dec 31, 2015
Particulars ($)
Sales 3,48,600
Cost of goods sold 2,29,150
Operating expenses 32,500
Interest exp 13,100
Non operating exp 5000
Tax 30%
Dividend per share 0.50 $ Market price per share is 3$
 Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) creditor turnover ratio, (6) Debt Equity ratio,(7) Times Interest
Coverage , (8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and
(11) Return on Investment 12)Net profit ratio 13) Operating profit 14) Return on equity capital 15)
EPS 16) P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working
capital

57. Jones Corporation’s Financial Statements appear below:

Balance Sheet on Dec 31, 2006
Assets Amount

Current Assets :
Cash…………………………………………… $ 1,00,000
Receivables 2,00,000
Inventory 3,00,000
Non-Current Assets:
Plant assets 5,00,000

Total Assets 11,00,000

Liabilities and Stockholders’ Equity Amount

Current Liabilities (Creditors) $2,00,000

10% debentures 1,00,000
Equity Stock, $ 1 par Value, 1,00,000 Shares 1,00,000
Premium on Common Stock 5,00,000
Retained Earnings 2,00,000

Total Liabilities and Stockholders’ Equity 11,00,000

Income Statement for the Year Ended Dec 31, 2006

Net Sales……………………………………………… $ 1,00,0000
Cost of Goods Sold 60,00,00
Gross Income 40,0000
Operating Expenses 10,0000
Income Before Taxes 30,00,00
Interest 10,000
Income Taxes 15,0000

Net Income 14,0000

Additional Information available is a market price of $ 150 per share of stock and total
dividends of $ 6,00,000 for 2006, and $ 2,50,000 of inventory as of Dec 2005.
Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in days , (4)
Inventory Turnover, (5) operating cost ratio, (6) Debt Equity ratio,(7) Times Interest Coverage , (8)
Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and (11) Return on
Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity 15) EPS 16) P/E ratio
17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working capital
58) From the following prepare maximum ratios from the Statement .(in lakhs).
2016-17
Net sales 160000
Cost of goods sold 120000
Administrative expenses 4000
Selling expenses 6000
Interest 12000
Income tax 5000

Particulars Amount ($) on 31.3.17

Equity Share Capital @ 10 each 1,50,000
Reserves 40,000
Debentures 5,000
Long term loans 42,000
Current liabilities 13,000
Buildings 1,50,000
Furniture 30,000
Sundry Debtors 15,000
Stock 25,000
Bank 30,000

Market price per share is 14 and dividend 1 per share is declared. Opening stock 28000 and opening
debtors 14000

Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) capital gearing, (6) Debt Equity ratio,(7) Times Interest Coverage ,
(8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and (11) Return
on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital 15) EPS 16)
P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working capital

59.From the following prepare maximum ratios from the Statement Rs.(in lakhs).
2017-18
Net sales 200000
Cost of goods sold 150000
Administrative expenses 4000
Selling expenses 8000
Interest 13500

Particulars Amount as on 31.3.18

Equity Share Capital @ 20 each 1,50,000
Reserves 50,000
Debentures 40,000
Creditors 60,000
Buildings 1,80,000
Furniture 25,000
Sundry Debtors 20,000
Stock 65,000
Bank 10,000

Market price per share is 32 and dividend 3 per share is declared. Opening stock 55000 and opening
debtors 18000
Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) Return on capital employed (6) Debt Equity ratio,(7) Times Interest
Coverage , (8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and
(11) Return on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital
15) EPS 16) P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working
capital

60) Prepare all ratios from the income Statement from the following.
Net Sales 1,00,000
Cost of goods sold 70,000
Administrative expenses 4,000
Selling Expenses 6,000
Interest 1000
Tax rate 50 percent
Equity Share Capital @ 5 each 1,50,000
Reserves 40,000
Debentures 47,000
Creditors 13,000
Buildings 1,50,000
Furniture 30,000
Sundry Debtors 15,000
Stock 25,000
Bank 30,000
Market price per share is 8 and dividend 0.10 per share is declared. Opening stock 38000 and opening
debtors 19000
Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) operating ratio, (6) Debt Equity ratio,(7) Times Interest Coverage ,
(8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and (11) Return
on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity 15) EPS 16) P/E
ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working capital

61) Net Sales 150,000

Cost of goods sold 112,000
Administrative expenses 6,000
Selling Expenses 9,000
Interest 3,200
Tax rate 50 percent
Equity Share Capital @ 10 each 1,50,000
Reserves 50,000
Debentures 40,000
Short term loans 60,000
Buildings 1,80,000
Furniture 25,000
Sundry Debtors 20,000
Stock 65,000
Bank 10,000
Market price per share is 9 and dividend 0.75 per share is declared. Opening stock 68000 and opening
debtors 24000
Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) capital gearing , (6) Debt Equity ratio,(7) Times Interest Coverage ,
(8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and (11) Return
on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital 15) EPS 16)
P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working capital
62) From the following prepare maximum ratios from the Balance Sheet.
Particulars Amount (Rs.) as on 31.3.16
Equity Share Capital @ 100 each 500000
Reserves 40,000
Debentures 250000 --
Account payable 55,000
Buildings 450,000
Machinery 50,000
Furniture 230,000
Bills Receivable 3,000, Sundry Debtors 57,000 ,Stock 25,000
Bank 25,000 Cash 5,000
Particulars 2016
Sales 685,000
Less cost of goods sold 341,600
Gross margin 343,400
Selling expenses 147,000
Administrative exp 81,250
Net operating income 115,150
Other income 2,500
Interest 30,000
Net income before taxes 87,650
Income tax 32,000
Net income 55,650
Market price per share is 108 and dividend 2 per share is declared. Opening stock 18000 and opening
debtors 64000
Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) operating profit, (6) Debt Equity ratio,(7) Times Interest Coverage ,
(8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and (11) Return
on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital 15) EPS 16)
P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working capital

63.From the following prepare maximum ratios from the Balance Sheet.
Particulars Amount (Rs.) as on 31.3.17
Equity Share Capital @50 each 7,50,000
Reserves 50,000
Debentures 140,000
Creditors 60,000
Buildings 5,10,000
Machinery 170,000
Furniture 25,000
Bills Receivable 4,000
Sundry Debtors 116,000
Stock 65,000
Bank 4,000
Cash 6,000

Particulars 2017
Sales 598,000
Less cost of goods sold 280,000
Gross margin 318,000
Selling expenses 105,000
Administrative exp 65,000
Net operating income 148,000
Other income 2,000
Interest 32000
Net income before taxes 118000
Income tax 40,000
Net income 78000

Market price per share is 58 and dividend 2 per share is declared. Opening stock 128000 and opening
debtors 94000
Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) cash ratio, (6) Debt Equity ratio,(7) Times Interest Coverage , (8)
Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and (11) Return on
Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital 15) EPS 16)
P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working capital

64) From the following prepare maximum ratios from the Balance Sheet.
Particulars Amount (Rs.) as on 31.3.17
Share capital and Liabilities:
Equity Share Capital @m 100 each 6,00,000
Reserves 3,30,000
Debentures 2,00,000
Long term loans 1,50,000
Bills payable 50,000
Sundry Creditors 1,00,000
Other current liabilities 20,000
Total: 14,50,000
Assets:
Buildings 4,00,000
Machinery 5,00,000
Furniture 1,00,000
Bills Receivable 30,000
Sundry Debtors 1,20,000
Stock 2,50,000
Bank 25,000
Cash 25,000
Total: 14,50,000

Particulars 2017
Sales 500000
Less cost of goods sold 316000
Gross margin 184000
Selling expenses 70000
Administrative exp 68000
Net operating income 46000
Interest exp 27000
Net income before taxes 19000

Market price per share is 98 and dividend 2 per share is declared. Opening stock 228000 and opening
debtors 140000
Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) fixed asset turnover, (6) Debt Equity ratio,(7) Times Interest
Coverage , (8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and
(11) Return on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital
15) EPS 16) P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working
capital

65) From the following prepare maximum ratios from the Balance Sheet.
Particulars Amount (Rs.) as on 31.3.18
Share capital and Liabilities:
Equity Share Capital @10 each 8,00,000
Reserves 2,20,000
Debentures 3,00,000
Long term loans 2,00,000
Bills payable 45,000
Sundry Creditors 1,20,000
Other current liabilities 15,000
Total: 17,00,000
Assets:
Buildings 5,00,000
Machinery 6,00,000
Furniture 2,00,000
Bills Receivable 40,000
Sundry Debtors 1,60,000
Stock 1,60,000
Bank 24,000
Cash 16,000
Total: 17,00,000

Particulars 2018
Sales 400000
Less cost of goods sold 240000
Gross margin 160000
Selling expenses 50000
Administrative exp 58400
Net operating income 51600
Interest exp 24000
Net income before taxes 27600

Market price per share is 58 and dividend 1 per share is declared. Opening stock 128000 and opening
debtors 141000

Required: Compute the following: (1) Current Ratio,(2) Acid-Test Ratio, (3) Drs turnover ratio in
days , (4) Inventory Turnover, (5) working capital turnover, (6) Debt Equity ratio,(7) Times Interest
Coverage , (8) Gross Profit Margin Ratio, (9) Total Assets Turnover, (10) Return on Total Assets and
(11) Return on Investment 12)Net profit ratio 13) Creditor turnover ratio 14) Return on equity capital
15) EPS 16) P/E ratio 17) Proprietary ratio. 18) Dividend pay out 19) Dividend yield ratio 20) working
capital

66. Recent Financial statements of Madison Corp. a company that sells drilling equipement are given
below: compute the Liqudity,profitability,solvency and activity.
Balance sheet June30,2012

Assets Amount $ Liabilities Amount $

 Stock 300,000 Equity Capital @ 5 $ per
Accounts Receivables 160,000 share 200,000
Bank 21,000 10%debentures 300,000
Prepaid exp 9,000 Current liabilities 200,000
Property and Retained earning 600,000
Equipment 810,000

Total 1,300,000 Total 1,300,000

Income statement: ($ in ‘000)

Particulars June 30. ($)
Sales 2,100,000
Less cost of goods sold 1,260,000
Gross margin 8,40,000
Selling & Admin expenses 6,60,000
Net operating income 1,80,000
Less: interest exp 30,000
Net income 150,000
Taxes 45,000
Net income after taxes 105,000
Account balances at the end of the year-Stock $260,000 and account receivables 140,000.

67.Prepare ratios for both years based on Liquidity, profit, solvency and activity.
Balance Sheet
Particular Jan.2013 Jan.2014
Cash 40,000 44,400
Account Receivable 10,000 20,700
Inventories 15,000 15,000
Land 4,000 4,000
Building 20,000 16,000
Equipment 10,000 14 ,200
Patents 1,000 900
Total 1,00,000 1,15,200
Current Liabilities 30000 32,000
Bonds Payable 22,000 22,000
Bonds Discount (2,000) (1,800)
Capital Stock(10 each) 35,000 43,500
P/L account 15,000 19,500
Total 1,00,000 1,15,200
Sales 120000 145000
G.P 30% 26%.
Operating exp 12000 11500
Interest 4000 4500
Dividend paid 0.75 1.25 per share
Market price 9.50 13.50

68.From the following information, Prepare ratios based on Liquidity, profit, solvency
and activity.
Balance Sheet of XYZ Ltd. as on March 31, 2012
Liabilities March March Assets March March
31,2011 31,2012 31,2011 31,2012
Equity Share (100 each) 15,00,000 Goodwill 1,80,000
Profit and Loss 5,50,000 Land & Building 6,50,000
Debentures 2,00,000 Plant & Machinery 3,60,000
Bank Loan -- 1,00,000 Investments -- 6,00,000
Profit for Taxation 95,000 Debtors 1,50,000 2,00,000
Creditors 60,000 70,000 Stock 1,00,000 1,80,000
Bills Payable 50,000 30,000 Cash 70,000
Bank 3,05,000
25,45,000 25,45,000

Sales 21,00,000
Cost of goods sold 12,40,000
Operating exp 2800000
Interest 50000
Tax 40%
Dividend paid 1 per share. Market price per share is 105

69.From the following particulars related to Agro Mills Ltd., Prepare ratios based on
Liquidity, profit, solvency and activity.
Particulars 31.3.11
Source of funds (Rs. lakh)
Shareholders funds Capital 1,300 (Rs.10 each)
Reserve and Surplus 4,700
Grand Total 6,000
Application of funds
Fixed Assets
Net Block 2,400
Investments 300
Current Assets
- Inventories 1,200 Opening stock 1,300
- Sundry Debtors 800 opening drs 900
- Cash and Bank Balance 1,200
- Loans and Advances 800
Total 4000
Current Liabilities
- Trade Creditors 500 opening balance 400
- Short term loans 200
Gross Total 6,000

Sales 3120
Cost of goods sold 2430
Operating exp 120
Interest 32
Tax 40%
Dividend paid 1 per share. Market price per share is 18.50
70.From the following Balance Sheets of Steel Ltd., Prepare ratios based on Liquidity,
profit, solvency and activity.

Balance Sheet
Liabilities 2010 2011 Assets 2010 2011
Equity Share Capital (10 each) 1,20,000 Goodwill 18,800
10%Prefer Sh. Capital 20,000 Land & Building 20,000
General Reserve 12,000 Plant 76,400
Profit and Loss Ac ount 10,800 Investment 14,000
Proposed Dividend 15,600 Debtor’s 30,000 43,200
Accts Payable 14,000 21,200 Stock 34,000 31,200
Outstanding Expenses 2,400 Cash 11,200
Provision for Taxation 12,800
2,14,800 2,14,800

Sales 212,000
Cost of goods sold 1,43,000
Operating exp 12000
Interest 3000
Tax 40%
Dividend paid 24000. Market price per share is 18

71. Prepare ratios based on Liquidity, profit, solvency and activity from the following
Information:
Balance Sheet
Liabilities 2010 2011 Assets 2010 2011
Equity Share Capital of 10 each 7,00,000 Cash/Bank 4,00,000
8% Debentures 4,00,000 Sundry Debtor 4,00,000 6,00,000
Profit &Loss Acct 5,00,000 Stock 5,00,000 6,00,000
Creditor 6,00,000 9,00,000 Goodwill 1,70,000
Discount 30,000
Plant 7,00,000
25,00,000 25,00,000
Sales 4120000
Cost of goods sold 32,43,000
Operating exp 120000
Interest 32000
Tax 40%
Dividend paid 3 per share. Market price per share is 32

72. Recent Financial statements of ABCD LTD are given below:

Balance sheet June 30,2016

Assets Amount $ Liabilities Amount $

 Stock 600,000 Equity Capital @ 10 $
Accounts Receivables 360,000 per share 1200,000
Bank 21,000 10%debentures 300,000
Prepaid exp 9,000 Current 500,000
Equipment 810,000 liabilities/Account
Furniture 500,000 Payable
Retained earning 300,000

Total 2,300,000

Total 23,00,000

Income statement: ($ in ‘000)

Particulars June 30. ($)
Sales 2,000,000
Less cost of goods sold 1,160,000
Gross margin 8,40,000
Selling & Admin expenses 4,60,000
Net operating income 3,80,000
Less: interest exp 1,30,000
Net income 250,000
Taxes 45,000
Net income after taxes 205,000
Account balances at the end of the year-Stock $560,000 and account receivables 340,000.

73.The following is the summerised transactions and Profit and Loss Account for
the year ending March 31, 2007 and the Balance Sheet as on that date. calculate
appropriate ratios.
Expenses/Losses Amount Revenue/Gains Amount
Rs. Rs.
Opening Stock 5,000 Sales 50,000
Purchases 25,000 Closing Stock 7,500
Direct Expenses 2,500
Gross Profit 25,000
57,500 57,500
Administrative Expenses 7,500 Gross Profit 25,000
Interest 1,500
Selling Expenses 6,000
Net Profit 10,000
25,000 25,000

Liabilities Amount Assets Amount

Rs. Rs.
Share Capital 50,000 Land and Building 45,000
Account payable 20,000 Plant and Machinery 15,000
Profit and Loss 10,000 Stock 7,500
Long term loan 25000 Sundry Debtors 12,500
Bills Receivables 6,250
Cash in Hand 8,750
Furniture 10,000
80,000 80,000

74. From the following balance sheet of Mr. Arvind Industries Ltd., as 31st March 2017.
Liabilities Rs. Assets Rs.
Equity Share Capital 10,000 Fixed assets 26,000
7% Preference Share Capital 2,000 (less depreciation Rs. 10,000)
Reserves and Surplus 8,000 Current Assets:
6% Mortgage Debentures 14,000 Cash 1,000
Current Liabilities: Investments (10%) 3,000
Creditors 1,200 Sundry debtors 4,000
Bills payable 2,000 Stock 6,000
Outstanding expenses 200
Tax Provision 2,600
40,000 40,000
Other information:
1. Net sales Rs. 60,000
2. Cost of goods sold Rs. 51,600, interest 1400
3. Net income before tax Rs. 4,000
4. Net income after tax Rs. 2,000
Calculate appropriate ratios.