Question 131: Fixed Assets `10,00,000; Working Capital `5,00,000; Cost of Revenue from Operations `50,00,000;
Gross Profit 20% of Cost.
Calculate Net Assets or Capital Employed Turnover Ratio.
Answer:
Capital Employed Turnover Ratio= Revenue from Operations/ Capital Employed
Capital Employed Turnover Ratio= 60,00,000/15,00,000
Capital Employed Turnover Ratio= 4 Times
Working note:
1. Revenue from Operations = Cost of Revenue from Operations + Gross Profit (20% of Cost 50,00,000)
Revenue from Operations = 50,00,000 + 10,00,000=60,00,000
2. Capital Employed= Fixed Assets +Working Capital
15,00,000= 10,00,000+5,00,000
Capital Employed=15,00,000
Question 132: Shareholders' Funds `10,00,000; Long-term Debts `20,00,000; Gross Profit at 20% on cost was `20,00,000. Calculate Net Assets or Capital Employed Turnover Ratio.
Answer:
Capital Employed Turnover Ratio= Revenue from Operations/ Capital Employed
Capital Employed Turnover Ratio= 1,20,00,000/30,00,000
Capital Employed Turnover Ratio= 4 Times
Working note:
1. Revenue from Operations = 20,00,000×120/20
Revenue from Operations = 1,20,00,000
2. Capital Employed= Shareholders' Funds + Long-term Debts
Capital Employed= 10,00,000+20,00,000= 30,00,000
Capital Employed=30,00,000
Question 133: From the following Balance Sheet of Akhil Ltd. as at 31st March, 2023, calculate (i) Net Assets Turnover Ratio and (ii) Fixed Assets Turnover Ratio:
|
Particulars |
Note No. |
` |
|
I. EQUITY AND LIABILITIES |
|
|
|
1. Shareholders' Funds |
|
|
|
(a) Share Capital |
|
10,00,000 |
|
(b) Reserves and Surplus |
|
3,00,000 |
|
2. Non-Current Liabilities |
|
|
|
Long-term Borrowings: |
|
|
|
8% Debentures |
|
5,00,000 |
|
3. Current Liabilities |
|
|
|
(a) Trade Payables |
|
1,50,000 |
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(b) Other Current Liabilities |
|
50,000 |
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Total |
|
20,00,000 |
|
IL. ASSETS |
|
|
|
1. Non-Current Assets |
|
|
|
Property, Plant and Equipment and Intangible Assets: |
|
|
|
Property, Plant and Equipment (Net of Depreciation) |
|
13,00,000 |
|
2. Current Assets |
|
|
|
(a) Inventories |
|
3,00,000 |
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(b) Trade Receivables |
|
2,50,000 |
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(c) Cash and Cash Equivalents |
|
1,50,000 |
|
|
|
|
|
Total |
|
20,00,000 |
Revenue from Operations for the year was 45,00,000.
Answer:
(i) Net Assets Turnover Ratio
Net Assets Turnover Ratio = Revenue from Operations/ Capital Employed
Net Assets Turnover Ratio = 45,00,000/18,00,000
Net Assets Turnover Ratio = 2.5 Times
Working Note:
Capital Employed= Share Capital +Reserves and Surplus +8% Debentures
Capital Employed= 10,00,000+3,00,000+5,00,000
Capital Employed=18,00,000
Fixed Assets Turnover Ratio
Net Assets Turnover Ratio = Revenue from Operations/ Fixed Assets (Net)
Net Assets Turnover Ratio = 45,00,000/13,00,000
Net Assets Turnover Ratio = 3.47 Times
166. Net Profit after interest but before tax ` 1,40,000; 15% Long-term Debts 4,00,000; Shareholders' Funds `2,40,000; Tax Rate 50%. Calculate Return on Capital Employed.
Answer:
Return on Capital Employed = Profit Before interest, tax and dividend/ Capital Employed×100
Return on Capital Employed = 2,00,000/6,40,000×100=31.25%
Working Note:
Interest =4,00,000×15/100=60,000
Profit Before interest= Profit after interest + Interest
Profit Before interest=1,40,000+60,000=2,00,000
Capital Employed= Long-term Debts + Shareholders' Funds
Capital Employed= 4,00,000+2,40,000=6,40,000
Question 134:
From the following, calculate Gross Profit Ratio:
Gross Profit: `50,000; Revenue from
Operations `5,00,000; Sales
Return: `50,000.
Answer:
Net Sales = ` 5,00,000
Gross Profit = ` 50,000
Gross Profit Ratio = Gross Profit / Net Sales × 100
= 50,000/5,00,000 × 100 = 10%
Note: Here we will not deduct the amount of sales return because the amount of net sales has already been provided in the question.
Question 135:
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:
Gross Profit = Revenue from Operations – Cost of Revenue
from Operations
= 6,00,000 – 5,40,000
= ` 60,000
Gross Profit Ratio = Gross Profit Revenue from Operations × 100
= 60,0006,00,000 × 100
= 10%
Ts Grewal Solution 2023-2024
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Class 12 / Volume – I
Chapter 3 – Accounting Ratio