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12th | Accounting Ratio | Question No. 71 To 75 | Ts Grewal Solution 2023-2024

Question 71:

From the following information, calculate Interest Coverage Ratio:

 

 `

10,000 Equity Shares of  `10 each

1,00,000

8% Preference Shares

70,000

10% Debentures

50,000

Long-term Loans from Bank

50,000

Interest on Long-term Loans from Bank 

5,000

Profit after Tax

75,000

Tax

9,000

Answer:

Interest on 10% debentures=50,000×10/1000=5,000

Profit before Interest and Tax = Profit after Tax + Tax + Interest on Debentures + Interest on Long-term Loans from Bank

Profit before Interest and Tax = 75,000 + 9,000 + 5,000 + 5,000

Profit before Interest and Tax = 94,000

Total Interest Amount = Interest on Debentures + Interest on Long-term loans from Bank

Total Interest Amount = 5,000 + 5,000

Total Interest Amount = 10,000

Interest Coverage Ratio = Net Profit before Interest and Tax/Interest

Interest Coverage Ratio = 94,000/10,000

Interest Coverage Ratio = 9.4 times

Debt to Capital Employed Ratio

Question 72: From the following information, calculate Debt to Capital Employed Ratio:

 

`

Shareholders' Funds

24,00,000

Long-term Borrowings

(9% Debentures)

12,00,000

Current Liabilities

2,00,000

Non-current Assets

28,00,000

Current Assets

10,00,000

Answer:

Debt to Capital Employed Ratio= Debt ÷ Capital Employed

Debt to Capital Employed Ratio= 12,00,000 ÷ 36,00,000

Debt to Capital Employed Ratio= 0.33/1

Working note:

Capital Employed = Shareholders' Funds + Long-term Borrowings (9% Debentures)

Capital Employed = 24,00,000+12,00,000=36,00,000

 

Question 73: From the following information, calculate Debt to Capital Employed Ratio:


 

`

 

`

Capital Employed

87,00,000

Cash and Cash Equivalents

7,20,000

Investments

4,80,000

Equity Share Capital

45,00,000

Machinery

14,00,000

8% Debentures

36,00,000

Trade Receivables

8,00,000

Capital Reserve

6,80,000

Surplus, ie., Balance in Statement of Profit & Loss: (`1,00,000).

Answer:


Debt to Capital Employed Ratio= Debt ÷ Capital Employed

Debt to Capital Employed Ratio= 36,00,000 ÷ 87,00,000

Debt to Capital Employed Ratio= 0.41/1

 

Question 74: From the following, calculate 'Debt to Capital Employed Ratio':

9% Debentures - `2,00,000

8% Public Deposits - `5,00,000

Long-term Provisions - `2,00,000

Equity Share Capital - `8,00,000

Reserves and Surplus - `5,00,000

Answer:


Debt to Capital Employed Ratio= Debt ÷ Capital Employed

Debt to Capital Employed Ratio= 2,00,000 ÷ 15,00,000

Debt to Capital Employed Ratio= 0.41/1

Working note:

Debt= 9% Debentures - `2,00,000

Equity= 9% Debentures (`2,00,000) + Equity Share Capital (`8,00,000) + Reserves and Surplus (`5,00,000)=15,00,000

 

 

Question 75: Calculate Debt to Capital Employed Ratio from the following information:

 

 

`

Shareholders’ Funds

 

50,00,000

Non-current Liabilities:

 

 

Long-term Borrowings

20,00,000

 

Long-term Provisions

17,50,000

37,50,000

Non-current Assets:

 

 

Property, plant and Equipment and Intangible Assets

90,00,000

 

Non-current Investments

12,50,000

1,02,50,000

Current Assets

 

23,75,000

 

Answer:

Debt to Capital Employed Ratio= Debt ÷ Capital Employed

Debt to Capital Employed Ratio= 37,50,000÷ 87,50,000

Debt to Capital Employed Ratio= 0.428/1

Debt to Capital Employed Ratio= 0.43:1

 

Working note:

Debt = Long-term Borrowings + Long-term Provisions

37,50,000=20,00,000+17,50,000

Capital Employed= Debt+ Shareholders’ Funds

87,50,000=37,50,000+50,00,000

 

Ts Grewal Solution 2023-2024

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Class 12 / Volume – I

Chapter 3 – Accounting Ratio

Question No. 1 To 5

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