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Pioneer Stationeries Ltd. Has The Following Balance Sheet and Income Statement For The
Pioneer Stationeries Ltd. Has The Following Balance Sheet and Income Statement For The
has the following balance sheet and income statement for the
financial year 2013-14.
Balance sheet as on March 31, 2014
Owners equity and
liabilities
(Rs. in lakhs)
Assets
(Rs. in
lakhs)
250
250
250
Investments (long-term)
100
Sundry creditors
110
Inventories
150
Accrued expenses
50
Sundry debtors
150
Provisions
40
50
700
700
1600
1250
350
100
250
75
175
Calculate:
i. Current ratio
ii. Acid-test ratio
iii. Average collection period
iv. Debt-equity ratio
v. Return on investment
vi. Return on equity.
vii. GP ratio
(Assume 1 year = 360 days)
b. Calculate the current ratio and the debt equity ratio if the inventories grow by 40%,
and long-term debt is raised to the extent of 50% of the increase in inventories,
reserves and surplus increase by 25% of the increase in inventories and trade
credit increases by 25% of the increase in inventories.
c.
Comment on the change in the current ratio and the debt-equity ratio.