12th | Accounting Ratios | Question No. 146 To 150 | Ts Grewal Solution 2022-2023

Opening Inventory  `80,000; Purchases  `4,30,900; Direct Expenses  `4,000; Closing Inventory  `1,60,000; Administrative Expenses  `21,100; Selling and Distribution Expenses  `40,000; Revenue from Operations, i.e., Net Sales  `10,00,000. Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio.

(i)

Opening Inventory = 80,000

Closing Inventory = 1,60,000

Cost of Goods Sold = Opening Inventory + Purchases + Direct Expenses − Closing Inventory

= 80,000 + 4,30,900 + 4,000 − 1,60,000

= 3,54,900

Average Inventory= Opening Inventory+ Closing Inventory/2

                        =80,000+90,000/2

                        =1,20,000

Inventory Turnover Ratio= Cost of Goods Sold/ Average Inventory

                                                =3,54,000/1,20,000

=2.96 Times

(ii)

Sales = 10,00,000

Gross Profit = Net Sales − Cost of Goods Sold

= 10,00,000 − 3,54,900 = 6,45,100

Gross Profit Ratio= Gross profit ×100/Net Sales

                        = 645000×100/10,00,000

                        =64.51%

(iii)

Operating Expenses = Administration Expenses + Selling and Distribution Expenses

= 21,100 + 40,000 = 61,100

Operating Cost = Cost of Goods Sold+ Operating Expenses 

                        =3,54,900+61,100=4,16,000

Operating Ratio= Operating Cost/ Net Sales ×100

                        =4,16,000/10,00,000× 100

= 41.6%

 

Following information is given about a company:

	`			`
Revenue From Operations, i.e., Net Sales Gross Profit	1,50,000		Opening Inventory	29,000
Cost of Revenue From Operations	30,000		Closing Inventory	31,000
(Cost of Goods Sold)	1,20,000		Debtors	16,000

From the above information, calculate following ratios:

(i) Gross Profit Ratio,

(ii) Inventory Turnover Ratio, and 

(iii) Trade Receivables Turnover Ratio.

 

(i)

Sales = 1,50,000

Gross Profit = 30,000

Gross Profit Ratio= Gross profit ×100/Net Sales

                        = 30,000×100/1,50,000

                        = 20%

(ii)

Opening Inventory = 29,000

Closing Inventory = 31,000

Average Inventory= Opening Inventory+ Closing Inventory/2

                                    =29,000+30,000/2

                                    =30,000

Cost of Goods Sold = 1,20,000

Inventory tunover ratio= Cost of goods sold / Average Inventory

                                    = 1,20,000/30,000

                                    = 4 Times

(iii)

Trade receivable turnover ratio= Net Credit sales/ Average Trade receivables

Trade receivable turnover ratio= 1,50,000/16,000

= 9.4 Times

From the following calculate:

(a) Current Ratio; and 
(b) Working Capital Turnover Ratio.

		`
(i)	Revenue from Operations	1,50,000
(ii)	Total Assets	1,00,000
(iii)	Shareholders' Funds	60,000
(iv)	Non-current Liabilities	20,000
(v)	Non-current Assets	50,000

A) Current Ratio = Current Assets Current Liabilities                        
Current Assets = Total Assets – Non Current Assets
                           = 1,00,000 – 50,000
                           =  ` 50,000

Total Assets = Total Liabilities = Shareholders’ Funds + Non-Current Liabilities + Current Liabilities
     1,00,000 = 60,000 + 20,000 + Current Liabilities
Current Liabilities =  ` 20,000
       Current Ratio = 50,000/20,000 = 2.5 : 1

B) Working Capital Turnover Ratio = Revenue from Operations /Working Capital                                                         
Working Capital = Current Assets – Current Liabilities
                              = 50,000 – 20,000
                              =  ` 30,000

Working Capital Turnover Ratio = 1,50,000/30,000 =  5 times

 

From the following information obtained from the books of Kamal Ltd., calculate (i) Gross Profit Ratio and (ii) Net Profit Ratio:

	`
Revenue from Operations	2,50,000
Purchases	1,05,000
Carriage Inwards	4,000
Salaries	30,000
Decrease in Inventory	15,000
Return Outwards	5,000
Wages	18,000

(CBSE 2020)

(i) Gross Profit= Revenue- Net Purchase- Carriage Inwards- Wages- Decrease in Inventory

Gross Profit= 2,50,000- (1,05,000-5,000)- 4,0000 – 18,000-15,000

Gross Profit=1,13,500

Gross Profit=1,13,500×100/2,50,000 =45.20%

(ii) Net Profit= Gross Profit –Salaries

Net Profit= 1,13,000 – 30,000

Net Profit= 83,000

Net Profit=83,500×100/2,50,000 =33.20%

 

Calculate following ratios on the basis of the following information:
(i) Gross Profit Ratio;
(ii) Current Ratio;
(iii) Acid Test Ratio; and 
(iv) Inventory Turnover Ratio.

	`			`
Gross Profit	50,000		Revenue from Operations	1,00,000
Inventory	15,000		Trade Receivables	27,500
Cash and Cash Equivalents	17,500		Current Liabilities	40,000

 

(i)

Gross Profit Ratio = Gross Profit /Revenue from Operations×100

Gross Profit Ratio = 50,000/1,00,000×100=50%

 

(ii)

Current Ratio = Current Assets/Current Liabilities

Current Ratio = Inventory + Cash and Cash Equivalents + Trade Receivables/Current Liabilities

Current Ratio=15,000+17,500+27,500/40,000

=1.5:1

 

(iii)

Liquid Ratio = Liquid Assets/Current Liabilities

Liquid Ratio = Cash and Cash Equivalents + Trade Receivables/Current Liabilities

Liquid Ratio = 17,500+27,500/40,000

=1.125:1

 

(iv)

Inventory Turnover Ratio = Cost of Goods Sold/Average Stock

Inventory Turnover Ratio = Revenue from Operations − Gross Profit/Average Stock Inventory 

                 Turnover Ratio = 1,00,000 − 50,000/15,000

                  =3.33times