Question 61:
From the following
information, calculate Interest Coverage Ratio: Profit after Tax `4,25,000;
Tax `75,000; Interest on Long-term Funds `1,25,000.
Answer:
Profit before Interest and
Tax = Profit after Tax + Tax +Interest
Profit before Interest and
Tax = 4,25,000 + 75,000 + 1,25,000
Profit before Interest and Tax = 6,25,000
Interest Coverage Ratio=
Net Profit before Interest and Tax/Interest
Interest Coverage Ratio =6,25,000/1,25,000=5 times
Question 62;
From the
following detail, calculate Interest Coverage ratio;
|
Net profit after Tax |
`7,00,000 |
|
6% Debentures |
`20,00,000 |
|
Tax Rate 30% |
|
Answers;
Interest coverage ratio= net profit before interest and tax/ interest on long term debt
Interest coverage ratio =11,20,000/1,20,000
Interest coverage ratio =9.33
Working
notes;
Wn-1
Net profit after tax=7,00,000
Tax rate 30%
Net profit after tax = 70%
Net profit before tax=7,00,000 × 100/70
Net profit before tax= 10,00,000
Wn-2
Interest on loan term borrowings=20,00,000×6/100=1,20,000
Net profit before Interest and tax= 10,00,000+1,20,000=11,20,000
Question 63;
From the following
information, calculate Interest Coverage ratio;
Net profit after interest and
Tax `1,20,000; Rate of Income
tax;40%; 15%; Debentures `1,00,000; 12% Mortgage loan `1,00,000.
Answers;
Interest coverage ratio = net profit before interest and tax / interest on long term debt
Interest coverage ratio = 2,27,000/ 27,000
Interest coverage ratio = 8.41 times
Working
notes;
Wn-1
Net profit after interest and tax 1,20,000
Rate of income tax 40%
Net profit before tax= 60%
Net profit before tax=1,20,000×100/60=2,00,000
Wn-2
Interest on long term borrowings= 27,000
Interest on debenture= 1,00,000 × 15 / 100= 15,000
Interest on 12% Mortgage loan= 1,00,000 ×12 / 100= 12,000
Net profit before interest and tax= 2,00,000+ 27,000 =2,27,000
Question 64:
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
Question 65:
From the following details, calculate Inventory Turnover Ratio:
|
|
` |
|
Cost of Revenue from Operations (Cost of
Goods Sold) |
9,00,000 |
|
Inventory in the beginning of the year |
2,50,000 |
|
Inventory at the close of the year |
3,50,000 |
Answer:
|
Inventory tunover ratio |
= Cost of goods sold / Average
Stock
|
|
Cost
of Goods Sold |
= 9,00,000 |
|
Average
Stock |
= Opening Stock + Closing
Stock/2 =2,50,000+3,50,000/2 = 3,00,000 |
|
Inventory
turnover ratio |
=9,00,000/3,00,000 = 3 Times |
Click below for more Questions
Ts Grewal Solution 2022-2023
Class 12 / Volume – 3
Chapter 4 – Accounting Ratios
Question No. 1 To 5
Question No. 6 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55
Question No. 56 To 60
Question No. 61 To 65
Question No. 66 To 70
Question No. 71 To 75
Question No. 76 To 80
Question No. 81 To 85
Question No. 86 To 90
Question No. 91 To 95
Question No. 96 To 100
Question No. 101 To 105
Click on below links for
12th TS Grewal’s Accountancy Solutions