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12th | Accounting Ratio | Question No. 121 To 125 | Ts Grewal Solution 2023-2024

Question 121:


Capital Employed  ` 12,00,000; Net Fixed Assets 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations  ` 40,00,000; Gross Profit is 20% on Cost. Calculate Working Capital Turnover Ratio.

Answer:


Cost of Goods Sold = 40,00,000

Gross Profit = 20% of Cost

Gross Profit =20/100×40,00,000=8,00,000

Total Sales

= Cost of goods sold + Gross profit

 

=40,00,000+8,00,000

=48,00,000

Working Capital

= Capital employed – Net Fixed  Assets

=12,00,000-8,00,000

=4,00,000

Working Capital turnover ratio

= Net sales /Working  Capital

 

=48,00,000/4,00,000

 

= 12 Times

     = 5 Times

Question 122:


Calculate Working Capital Turnover Ratio from the following information: 
Revenue from Operations  ` 15,00,000; Current Assets  ` 6,25,000; Total Assets  ` 10,00,000; Non-current Liabilities  ` 5,00,000, Shareholders' Funds  ` 2,50,000.

Answer:


Working Capital Turnover Ratio = Net Sales/Working Capital

Revenue from Operations (Net Sales) = ` 15,00,000 

(Given)Working Capital=Current Assets-Current Liabilities

Current Assets = 6,25,000 

(Given)Current Liabilities= ?

Total Assets = Total Liabilities =  ` 10,00,000 

(Given)Total Liabilities = Shareholders' Funds + Non-Current Liabilities + Current Liabilities

10,00,000 =2,50,000+5,00,000+Current Liabilities

Current Liabilities = ` 2,50,000

Working Capital=6,25,000-2,50,000= ` 3,75,000

Working Capital Turnover Ratio=15,00,000/3,75,000

Working Capital Turnover Ratio =4 times

Question 123:


A company earns Gross Profit of 25% on cost. For the year ended 31st March, 2017 its Gross Profit was  ` 5,00,000; Equity Share Capital of the company was  ` 10,00,000; Reserves and Surplus  ` 2,00,000; Long-term Loan  ` 3,00,000 and Non-current Assets were  ` 10,00,000.
Compute the 'Working Capital Turnover Ratio' of the company.

Answer:


Working Capital Turnover Ratio= Revenue from Operation/Working Capital
Gross Profit = 25% on Cost
Let Cost of Goods sold be  ` 100.
Gross Profit =  ` 25
Revenue from Operations =  ` (100 + 25) =  ` 125
When Gross profit is  ` 25, revenue from operations is=  ` 125
And, if Gross profit is  ` 5,00,000 then revenue from operations will be=  ` (5,00,000 × 125/25) =  ` 25,00,000
Capital Employed = Shareholder’s Funds + Non-Current Liabilities
                          =  ` (10,00,000 + 2,00,000 + 3,00,000) =  ` 15,00,000
Also, Capital Employed = Non Current Assets + Working Capital
Alternatively, Working Capital = Capital Employed – Non-current Assets =  ` (15,00,000 – 10,00,000)=  ` 5,00,000
Hence, Working Capital Turnover Ratio= 25,00,000/5,00,000= 5 times

 

Fixed Assets Turnover Ratio

 

Question 124: Net Fixed Assets `  5,00,000, Revenue from Operations 25,00,000.


Calculate Fixed Assets Turnover Ratio.

Answer:


Fixed Assets Turnover Ratio= Revenue from Operations/ Net Fixed Assets

Fixed Assets Turnover Ratio= 25,00,000/ 5,00,000= 5 Times

 

Question 125: Fixed Assets (at Cost)  `7,00,000, Accumulated Depreciation `1,00,000, Credit Revenue from Operations `17,00,000, Cash Revenue from Operations `1,00,000. Calculate Fixed Assets Turnover Ratio.


Answer:


Fixed Assets Turnover Ratio= Revenue from Operations/ Net Fixed Assets

Fixed Assets Turnover Ratio= 18,00,000/ 6,00,000= 3 Times

Working note:

(i)                 Net Fixed Assets= Fixed Assets (at Cost)  - Accumulated Depreciation

Net Fixed Assets= 7,00,000 - 1,00,000

Net Fixed Assets= 6,00,000

 

(ii)               Revenue from operation= Credit Revenue from Operations + Cash Revenue from Operations

Revenue from operation= 17,00,000+ 1,00,000=18,00,000

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – I

Chapter 3 – Accounting Ratio

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