12th | Accounting Ratios | Question No. 131 To 135 | Ts Grewal Solution 2025-2026

Property, Plant and Equipment and Intangible 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= Property, Plant and Equipment and Intangible Assets +Working Capital

15,00,000= 10,00,000+5,00,000

Capital Employed=15,00,000

 

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

 

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
(b) Other Current Liabilities		50,000
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
(b) Trade Receivables		2,50,000
(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

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.

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%