previous Years'

Examination Questions
2 Marks Questions
1. Sumo Ltd. had a current ratio of 0.8 : 1, its current as·s ets being t 2,00,000. and current
liabilities being t 2,50,000. . ·
What will be the revised current ratio of Sumo Ltd after one of its endorsed bills
. '
receivable oft 30,000 gets dishonoured? , . Sem I 2021
(a) 0.71 : 1 (b) 0.92 : 1
(c) 0.72: 1 (d) 0.82: 1
Ans (d) Current Ratio of Sumo Ltd. = O·8 = 2,00,000
. 1 2,50,000
Endorsed bill dishonoured will increase both debtor and creditor
Revised Current .Ratio= 2,00,000 + 30,000 = 2,30,000 = 0.82: 1
· 2,50,000 + 30,000 2,80,000

2. The debt-equity ratio o~ a company is 1. 7 : 1.

Which one of the following transactions will reduce the debt-equity ratio? Sem I 2021
(a) Plant and machinery worth t 1,20,000 sold at a loss oft 10,000
(b) Interest oft 5,000 received on calls-in-arrears
(c)-A loan of~ 10,00,000 taken from a bank
(d) Interest of~ 10,000 paid on the bank loan
Ans (b) Interest oft 5,000 received on calls-in-arrears will reduce the debt-equity ratio.

3. The particulars of Mars Ltd. are given below

Particulars Amt (t)
Opening Debtors 50,000
Cash received from debtors 2,20,000
Closing Debtors 30,000

What will be the trade receivables turnover ratio of the company? Sem I 2021
(a) 4.75 times (b) 5.5 times
(c) 5 times (d) 6.75 times
. Credit Sales 2,00,000 ·
Ans (c) Trade Receivable Turnover Ratio = - - - -- - - - - - = - -- = 5 Times
Average Trade Receivables 40,000
-r. d R · . bl Opening Trade Receivable+ Closing Trade Receivable
Average .1ra e ece1va e =
2
= 50,000 + 30,000 = 40 000
2 ,
Credit Sales = Closing Debtors + ·Cash Received - Opening Debtors •
= 30,000 + 2, 20,000 - 50,000
= 2,00,000
294 Chapterwise ISC Solved Papers Accounts (Class XII)

Direction Q,uestions 4 and 5 are based on by hypothetical situation given below

_ ______---,---:-~-
The particulars of Barua Ltd are given below
___::_
Particulars Amt (t)

Revenue from Operations 10,00,000

Purchase of Stock-in-trade 6,00,000

Changes in lnventory_of Stock-in-trade (60,000)

(Opening_Inventory t 1,20,000, Closing

lnv'entory t 1,80,000)
Employee Benefit Exp~nses (Sala_ries) 40,000

Provision for Tax 1,00,000

Sundry Creditors 2,00,000

Cash at Bank • 5,00,000
Marketable Securities 50,000
Sem 12021

4. What will be the current ratio of the company?

(a) 2.23 : 1 (b) 3.65 : 1
(c) 2.43 : 1 (d) 1.83 : 1
. Current Assets
Ans (c ) Current Ratio = ·,
Current Liabilities
7,30;000 = 2 _43 : I
3,00,000
I

5. What will _be the net profit ratio of the company?

W3~ ~3~
(c) 42% · (d) 36%
. Net Profit
Ans (a) Net Profit Ratio = - - - x I00
Net Sales
2
Net Profit= 3, 0,000 x lO0 = 32%
10, 00,000

6. State the objective of calculating liquidity ratios. 2020

Ans Liquidity is defined as the ability of a company to meet its financial obligations when they become due.
Thus, liquidity ratio is used to pay its short-term debts. It includes current ratio, acid-test ratio and cash
ratio.

7. · Assuming that the cm;rent _ratio of company is 0. 7: 1 , ·mention whether this ratio would
increas~, decrease or not change after the following transactions
(z) Payment oft 15,000 made to a creditor.
(it) Purchase of inventory'worth t 1,00,000 on 1;:redit. 2020
Ans (z) Decrease 'Since numerator [current assets (cash)] and denominator [current liabilities (creditor)]
reduces by same amount, the ratio decreases.
(ii) Increase Since numer~tor [current assets (inventories)] and denominator [current liabilities
(creditor)] increases by same amount, the ratio increases.
Ratio Analysis
295

8. From the following info f ul . . )

rrna ion, ca1c ate earnings per share (upto two decimal places
10% Pefe~ence Share Capital · t 6,00,000
Equity Share Capital (3,00,000 Shares oft 1oeach) t 30,00,000
Profit before Tax
t 15,00,000
Tax Rate
30%

2020
Ans Profit before Tax
= t 15,00,000
(-) Tax Rate @ 30%
= t (4,50,000)
~ 10,50,000
(- ) Preference Dividend = ~ (60,000)
~ 9,90,000
Outstanding Equity Shares = 3, 00, 000
Earning per Share = 9,9 o, OOO = 3.3
3,00,000

9. Calculate the gross profit ratio from the following information

Particulars Amt (~)
Opening Inventory 80,000
Closing Inventory 1,00,000
Revenue from Operations 9,00,000
Inventory Turn over Ratio 8 times
2019
Average 1nventory = Opening·Inventory + Closing Inventory
Ans ·
2
= 80,000 + 1, 00, 000 = ~ 90 000
2 '
Cost of Revenue from Operations = Inventory Turnover Ratio x Average Inventory
= 8 x 90,000
=~7,20,000
Gross Profit = Revenue from Operations - Cost of Revenue from Operations
= 9,00,000 - 7,20,000
= ~ 1,80,000
Gross Profit
Gross Profit Ratio = . · x lOO
• Revenue from 0 perations
= 1,80, 000 X 100 = 20%
9,00,000

10. · The _quick ratio of a company is 0.8 : 1. State whether the quick ratio will improve, decline
or will not change in the following cases · 2018
(z) Cash collected from debtors t 50,000.
(ii) Creditors oft 20,000 paid-off.
296 Chapte rwise ISC Solved Papers Accoun ts (Class XII)

Will be
Ans (z) Cash collec~ed from debtors will not change the total of quick assets because one quick asset
replaced by another. Therefo re, the quick ratio will not change.
the same amount.
(iz) Paymen t to creditor s will reduce the quick assets as_well as current liabilitie s by
Therefo re, the quick ratio will decline.
11. The current ratio of a compan y is 2_: 1. State whethe r .the current ratio will improv e,
2017
decline or will not change in the followi ng cases
( z) Bill receiva ble of~ 2,000 endorse d to a credito r is dishono ured.
(ii) ~ 8,000 cash collecte d from debtors of ~8,500 in full and final settlem ent.
as current
Ans ( t) Bill receivab le endorse d to a creditor is dishono ured. It will reduce the current assets as well
liabilitie s by the same amount. Therefo re, the current ratio will decline.
current asset will
(ii) Cash collecte d from debtors will not change the total of current assets because one
current
be replaced by another. But discount allo~ed reduces the account receivab le, thus reducing
· assets. Therefo re, tlie current ratio will decline.

12. The current ratio of a compan y is 2 : 1. State whethe r the followi ng will increas e, reduce
2015
or not change the ratio
( z) Bills payable ~ 5,000 discharg ed. (iz) Purchas e of invento ry f 20,000 on credit.
the same amount.
Ans ( z) Bills payable discharg ed will reduce current assets as well as current liabilitie s by
Therefo re, current ratio will increase.
( it) Purchas e of inventor y on credit will increase current assets as well as current
liabilities by the same
amount. Therefo re, current ratio will reduce. ·
2015
13. Give the formula e for calculat ing
( ZJ Earning per share. ( itJ Trade payable s ·turnove r ratio.
.) E . p Sh Net Profit available to Equity Shareho lders
Ans (z am1ng er are =
Number of Equity Shares
Net Credit Purchase s-
( ii) Trade Payable s Turnove r Ratio = - - - - -- ·P --
Average Trade ayables

14. Assum ing that the debt-eq uity ratio of a compan y is 2 : 1, state whethe r this ratio would
2012
increas e, decreas e or not change in the following cases
(i) Issue of new shares for cash · _
(ii) Repaym ent of a long-te rm bank lban
decrease.
Ans (i) Issue of new shares for cash will increase the equity. Therefo re, debt-equ ity ratio will
( ii) Repaym ent of a long-ter m bank loan will reduce deb~ as well as shareho lders'
fund, i.e. current assets
by the same amount. Therefo re, debt-equ ity ratio will decrease .
2011
15. State two differen ce betwee n .current ratio and quick ratio.
Ans Differen ce between current ratio and quick ratio
Basic Current ratio Quick ratio

Meaning This ratio establishes relationship between
current assets and current liabilities and is
used to assess the short-term financial
position of the business concern.
Ideal ratio Current ratio of 2: 1is considered to be
satisfactory.'
This ratio establishes relationship between liquid
assets and current liabilities and is used to
measure the firm 's ability to pay the claims of
credi,tors immediately.
This ratio is a better indicator of liquidity and 1 : 1
is considered to be satisfactory. -

J
Ratio Analysis 297

16. How is 'cost of goods sold' i.e., cost of revenue from operations calculated? 2009
Ans Cost of Revenue from Operations = Opening Inventory + Net Purchases + D irect Expenses
- Closing Inventory
or
= Revenue from Operations (Net sales) - Gross Profit
17. What is gross profit ratio and net profit ratio? 2009
Ans Gross Profit Ratio Gross profit ratio shows the relationship between gross profit to net sales (revenue
from operations).
Gross Profit Ratio = Gross Profit x 100
Revenue from Operations (Net sales)
Net Profit Ratio Net profit ratio shows the relationship between net profit and net sales (revenue
from operations). Net profit ratio is an indicator of overall operational efficiency 6f the business.
Net Profit Ratio= Net Profit x 100
Revenue from Operations (Net sales)
18. Name any two balance sheet ratios. 2008
Ans The two balance sheet ratios are
(i) Current ratio (ii) Quick ratio·
19. When calculating the acid test ratio, name two items that are excluded from current assets.
2008
Ans Inventories and pre pai~ expenses are the items, which are excluded.
20. What is quick ratio? State its significance. 2005
Ans This ratio establishes relationship between liquid assets and current liabilities and is used to measure
the firm' s ability to pay the claims of creditors immediately. This ratio is a better indicator of liquidity
. and.a quick ratio of 1 : 1 is considered to be satisfactory.
Liqw·d R atio · Jn, · k Ra.tio/Ac1'd 'T'1.est R atio
'<-mc . =-
Liquid Assets or~
Quick Assets*
~- - -- ~- - --
. Current Liabilities
*Liquid/ Quick Assets= All Current Assets - Inventories (excluding loose tools and spare parts)
- Prepaid Expenses

6 Marks Questions
21. From the following information calculate the following ratios (upto two decimal places)
(z) Debt to Total Assets Ratio .(ii) Proprietary Ratio
(iii) Inventory Turnover Ratio
Particulars Amt (~)
Property, Plant and Equipment and Intangible Assets 14,00,000
~urrerit Assets (including inventory of~ 2,00,000) 10,00,000
St:iareholders' Funds 14,40,000
Non-current Liabilities (10% long-term Bank Loan) 8,00,000
Current Liabilities 5,00,000
Revenue from Operations 15,00,000
Gross Profit -6,00,000

2020
298 Chapte rwise ISC solved Papers Accoun ts (Class XII)

Ans (r) Long-te rm Debt = ~ 8,00,000

Total Assets= 14,00,00 0 + 10,00,00 0 = ~ 24,00,00 0

Debt to Total Assets Ratio = _Lo_n_,g=-----te_rm_D_eb_t

Total Assets
= 8,00,000 = 0.33 : l
' 24,00,00 0

(ir) Propriet ary Ratio = Shareho lder's Funds

Total Assets
~ 14,40,00 0 = 0.6: l
24,00,00 0
-· ~Inventory 11urnover Ratio= - - COGS
(m ----
1
Average Inventor y
Cost of Goods Sold (COGS) = Revenue from Operatio ns - Gross Profit
' . =15,00,000 -6,00,00 0 =~ 9,00,000
Average Invento ry = ~ 2,00,000 ·
9
Now, Invento ry Turnove r Ratio= ,00,000 ::; 4.5 times
2,00,000

22. From the following information calculate (upto two decimal places)
(i) Gross profit ratio ·
(ii) Inventory turnover ratio
(iii) Net profit ratio ·
Particulars Amt m

Cash Revenue from Operations 70,000

Net Purchases 2,97,000
Credit Revenue from Operation s 2,80,000
Closing Inventory 80,000
Opening Inventory 60,000
. . Carriage Inward , 3,000
Selling Expenses 5,000
Administrative Expenses 40,opo
Loss on Sale of Property, Plant and Equipment and Intangible Assets 10,000
Dividend Received 7,000
2015
Gross Profit
Ans (z) Gross Profit Ratio = . x.100
, Revenue from 0 perations
= · ?O,OOO X 10() = 200/o
3,50,000
Working Notes
1. Cost of Revenue from Operatio ns
·=Opening Invento ry+ Ne t Purch ases + Carriage Inward -Closin g Inventory
=60,000 :f- 2,97,0 00 :+- 3,000 - 80,000 = t 2,80,000
Ratio Analysis 299

2
· Gross Profit = Revenue from Operations (Cash_+Credit) - Cost of Revenue from Operations
= (70,000 + 2,80,000) - 2,80,000
= 3,50,000- 2,80,000 = ~ 70,000

(ii) Inventory Turnover Ratio = Cost of Revenue from Operations

Average Inventory
2,80,000 ·
= 70,000 = 4 times
- Average I
nventory = -
Opening Inventory + Closing Inventory
. ----=----___:::..__
-- __..!,_
2
60,000 + 80,000 .
= =f 70,000
2

(iii) Net Profit Ratio= Net -Profit x 100

Revenue from Operations
24
= QOO X 100 = 6.290/o
3,5~,000
Worlcing Note
Net Profit =Gro~s Profit - Indirect Expenses+ Indirect Incomes
. = 70,000 - (10,000 +40,000 + 5,000) + 7,000
= 77 ,ooo -55,000
= ~ 22,000

8/10 Marks Questions

23. From the following statement of profit and loss of Gama Ltd. for the year 2017-18;
calculate (upto two decimal places)
.(zj Net profit ratio (iz) Operating profit ratio
(iizj- Current ratio (iv) Quick ratio
Staten,ent of Profit and Loss of Gama Ltd.
for the year ending 31st March, 2018
Particulars Note No. Amt(~)
Revenue from Operations 3,00,000
Ot~er Income (Dividend received) 40,000
Total Revenue 3,40,000
Expenses
Purchases 1,80,000
Chang~ in Inventories 1 (4,000)
Employee Benefit Expenses (Salaries) 10,000
Depreciation and Amortization (Depreciation of Fixed Assets) 28,000
Other hpenses 2 6,000
Total Expenses 2,20,000
300 ch~pterwise ISC Solved Papers Accounts (Class XII)

Note No. Amt(~).

Particulars
1,20,000
Profit before Tax
(48,000)
(-) Provision for Tax
72,000
Profit after Tax

Notes to Accounts

Particulars Amt (~)

1. Change in Inventories
Opening Inventory 8,000
· Closing Inventory 12,000
(4,000)
2. Other Expenses
Carriage Outward 4,000
Rent 2,000
6,000

Additional information
Total current liabilities as on 31st March, 2018 t 50,000
Current assets (other than inventory) as on 31st March, 2018 t 70,000 2019
Ans ~ N p fi R . Net Profit after Tax
(i1 et ro 1t aho = - - - - - - - -- x 100
Revenue from Operations
= 74000 x l00
3,00,000
=24%
. • Operating Profit
(ii) Operating Profit Ratio = - - - = - - - - - - = ' - - - - - x 100
Revenue from Operations
= 1,20,000 xl0O
3,00,000
=40%
Operating Profit = Revenue from Operations + Other Income - Purchase - Change in Inventories
- Employee Benefit Expenses (salary) - Depreciation - Other Expenses
= 3,00,000 + 40,000 - 1,80,000 - (-4,000) - 10,000 - 28,000 - 6,000
= t 1,20,000
Current Assets
(iii) Current Ratio = . b"l" .
Current Lia 1 1ties
70,000 + 14000
= 50,000
= 1.64 : 1
Quick Assets ·
(iv) Quick Ratio = - ~ - - - -
Current Liabilities
= 70,000 =1.4 : l
50,000
Ratio Analysis
301

24. (i) Calculate the Net Profit Ratio (upto two decimal places) from the following information

Particulars ·1 Amt (~
Gross Profit 80,000
Salary and Rent 30,000
Interest on Debentures 5,000
Gain on Sale of Furniture 2,000
Revenue from Operations 4,00,000

(ii) From the following information calculate the following ratio (upto two decimal places)
(a) Earning pe~ share (b) Price earning ratio
(c) Return on investments (d) Working capital turnover ratio
Particulars Amt(~
Net Profit after Interest-and Tax 2,40,000
Tax 1,60,000
Net Property, Plant and Equipment and lnta.ngible Assets 10,00,000_
Non-current Investments (Non-trade) 1,00,000
Equity Share Capital (face value~ 10 per share) 5,00,000
15% Preference Share Capital 1,00,000
Reserves and Surplus (including surplus of the year undertonsideration) 2,00,000
10% Debentures 4,00,000
Revenue from Operations 10,00,000
Working Capital 1,00,000

2018
Note The market value of an equity share is~ 40.
Ans (i) Net Profit after Tax = Gross Profit - Salary and Rent - Interest on Debentures
+ Gain on Sale of Furniture
=80,000 - 30,000 - 5,000 + 2,000 =~ 47,000
. =
Net Profit Ratio Net Profit after Tax. x 100-
- 47,000 x 100 = 11 .75%
Revenue from Operations 4, 00, 000

Net Profit (after interest, tax and dividend on preference share)

(ii) (a) Earning Per ~hare = Number of Equity Shares

= 2,40,000-15,000 = ~ 4.50
50,000 ..
. . . Market Value of an Equity Share _ 40 =
. (b) Price_Earnmg Ratio = Earning.Per Share - 4.5 8 .88

Net Profit before Interest and Tax x l00 = 4,40,000 x 100 = 36.67%
(c) Return on Investment= Capital Employed 12,00,000
. . . _ Revenue from Operations = 10, 00, 000 = times
(d) Working Capital Turnover Ratio - Working Capital 1, 00, 000 10
r

302 Chapterwise ISC Solved Papers Accounts (Class XII)

Working Note
Amtm
Particulars
2.40,000
1. Net Profit after Interest and Tax
1,60,000
(+)Tax
4,00,000
40,000
(+) Interest
4.40,000
Net Profit before Interest and Tax
2. Capital Employed
5,00,000
Equity Share Capital
2,00,000 ·
(+) Reserve and Surplus
7,00,000
(+) Preference Share Capital
l,00,000
Shareholders' Fund
8,00,000
(+) Long-term Borrowings (10% Debentures) 4,00,000
12,00,000

25. From the information given below, calculate (upto two dec_imal places)
(i) Operating ratio (ii) Quick ratio
(iii) Debt to equity ratio (iv) Proprietary ratio
(v) Working tapital turnover ratio
Particulars Amtm
Net Revenue from Operations 12,00,000
Cost of Revenue from Operation 9,00,000
Operating Expenses 15,000
Inventory 20,000
Other Current Assets 2,00,000
Current Liabilities 75,000
Paid-up Share·Capital 4,00,000
Statement of Profit and Loss (Dr-) 47,500
Total Debt 2,50,000
2017
·) . . Cost of Revenue from Operations + Operating Expenses
Ans (i 0 perating Ratio = · x 100
·Net Revenue from Operations ,
=9,00,000 + 15,000 X lO0 = 76 _250
12 00 000
, ' Vo
.
Liquid Assets 2 00 000
(ii) Quick Ratio -----"--- - = ' ' = 2.67 · 1
Current Liabilities 75,000 ·
Note Other current assets are treated as liquid assets.
·· ·) D b E · Ra .
(rn e t to qwty tio =
Debt
· =-2,50,000
- - = O 71 · 1
Shareholders' Funds 3,52,500 · ·
Working Note
Shareholders' Fund= Paid- up Sha.re Capital - Statement of Profit and Loss (Dr)
= 4,00,000 - 47,500 =t 3,52,500
p_atio Analysis
303

(iv) Proprietary Ratio= Shareholders' Funds

T otal Assets xlOO
3,54500
=6,04500 X 100 =58.51%
Working Note
Total Assets== Shareholders,· Funds+ Tot~l Debt
== 3,52,500+ 2,50,000 ==~ 6,02,500
(v) Working Capital Turnover Ratio = Net Revenue from Operations
Working Capital
Working Capital Turnover Ratio :;; l2,00,000 = 8.28 times
· ~~000
Worlcing Note
Working Cagital =Current Assets -Current Liabilities
==(20,000+ 2,00,000)-75,0 00
==~ 1,45,000

26. (i) Calculate liquid ratio from the following (upto two decimal places)
Current assets ~ 1,26,000
Inventories ~ 2,000
Current ratio 3 :2
(ii) From the following statement of profit and loss of Dixon Ltd for the year 2014-15,
calculate (upto two decimal places) .
·(a) Trade receivables turnover ratio (b) Inventory turnover ratio
(c) Net profit ratio (d). Operating profit ratio
Statement of Profit and Loss
for the year ending 31st March, 20 i 5
Particulars Note No. Amt(f)
Revenue from Dperations 2,00,000
Other Income (Rent received) 10,000
Total Revenue 2,10,000
Expenses .
Purchases 55,000
Change in Inventories 1 3,000
Employee Benefit Expenses 2 5,000
Depreciation 2,000
Other Expenses 3 5,000
Total Expenses 70,000
Profit before Tax 1.40,000
(-l Tax (56,000)
Profit after Tax 84,000
304 Chapter wise ISC Solved Papers Account s (Class XII) .

Notes to Accounts
31st MarchI
Particulars 201s m
'
1. Change in Inventories
6,000
Opening Inventory
(3,000)
Closing Inventory
3,000

2. Employee Benefit Expenses

2,000
Wages
3,000
Salaries -
5,000

3. Other Expenses
. 2,000
Carriage Inward
3,000
. Carriage Outward
5,000

Additional information
Debtors (as on 31st March, 2015) t 7,000
Bills receivable (as on 31st March, 2015) t 5,000
Cash revenue from operations t 50,000 2016

. = -Liquid
L' .d R atio Assets 1,24,000 = _
Ans (t.) 1qm - - ' - - - - - = - - - 1 48
Current Liabilities 84,000
Working Notes
. CurrentA ssets 3 1,26,000
1. Curren tRa t1 0 = - - - -- - =- =-'---'----
CL
Current Liabilities 2
CL=~ 2,52,000
3
Thus, Current Liabilitie s= f 84,000
2 . Liquid Assets= Current Assets - Inventori es = 1!26,000 - 2,000 = f 1,24,000

Credit Revenue from Operation s i, 50,000

(ii) (a) Trade Receivables Turnover Rabo = - - -- - - - -- - - - = - --
12,000
Average Trade Receivables
= 12.5 times
Working Notes
1. Credit Revenue from Operatio ns= Revenue from Operation s -Cash Revenue from Operations
= 2,00,000 - 50,000 = f 1,50,000

2. Opening rec·eivables is not given therefore , closing receivable is taken as average trade
receivables
Average Trade Receivables= Closing Debtors+ Closing Bills Receivable
=7,000 + 5,oob =f 12,000
R . Cost of Revenue from Operation s 62,000 .
,n
(b) I nventory .1umover atio =- -- - -- - - ~- - - =- . times
- = 4133
_ Average Inventory 1,500
Working Notes
1. Cost of Revenue from Operatio ns= Purchase s+ Changes in Inventori es
· + Direct Expenses (Wages + Carriage inward)
~ 55,000 + 3,000 + (2,000 + 2,000) = ~ 62,000
r
~atio Analysis 305

2. Average Inventory= Opening Inventory+ Closing Inventory 6 ooo + (-3 ooo)

- ----=:..__- -~~::..::.::..=--:.:~:..:...:....::..::.:::..:..!.... = ' ' = ~ 1,500
2 2
(c) Net Profit Ratio = Net Profit after Tax 84 000
R x 100 = ' x 100 = 42%
evenue from Operations 2, 00, 000
(d) Operating Profit Ratio = Operating Profit x 100 = 1, 32,000 x 100 = 66%
Revenue from Operations 2, 00, 000
Working Note
Operating Profit =Revenue from Operations-Cost of Revenue from Operations-Other Expenses
= 2,00,000 - 62,000 - (3,000 + 3,000) = ~ 1,32,000
27. (i) How ~oes the quality of ratio analysis of a business depend upon the accuracy of its
financial statements? .
(i,"i) From th. e c1011o~g information, calculate trade receivable turnover ratio
Credit Revenue from Operations f 9,60,000
· Gross Debtors t 1,90,000
Bills Receivable f 50,000
Provision for Doubtful Debts t 10,000
(iii) · From the following information, calculate the following ratio (upto two decimal places)
(a) Debt equity ratio (b) Interest coverage ratio (c) Proprietary ratio
Amt (t)
Equity Share Capital 2,00,000
5% Preference Share Capital 60,000
General Reserve 1,20,000
Property, Plant and Equipment and Intangible Assets 5,05,000
Current Assets 1,20,000
Current Liabilities 40,000
. Loan @10% ln.terest 5,00,000
Tax paid During the Yfi!ar 30,000
Profit for the.Current Year after Interest and Tax (available for the shareholders) 90,000
2014
Ans (i) The quality of ratio analysis of a business depends upon the accuracy of its financial statements
because ratios are calculated on the basis of data given in profit and loss statement and balance ·sheet.
Therefore, they will be only as correct as the accounting data on which they are based.
. . Credit Revenue from Operations
(ii) Trade Receivables Turnover Ratio=--------------=--- - - - - -
Trade Receivables (Gross Debtors+ Bills receivables)
9,60,000
= = 9,60,000 = 4 times
. 1,90, 000 + 50,000 2, 40,000
Note Provision for doubtful debts will not be deducted from gross total receivables.
... . . _ Long-term Debts = 5,00,000 = 1 06 . 1
(m) (a) Debt Eqmty Ratio - Shareholders' Funds 4,70,000 · ·

Working Notes .
1. Shareholders' Funds= Equity Share Capital + Preference Share Capital+ General Reserve+ Profit
= 2,00,000 + 60 ,000 + 1,20,000 + 90,000 =f4,70,000
2. Long-term Debts = Loan =f 5,00,000
,
\

306 chapterwise ISC Solved Papers Accounts (Clas~XII)

(b) t tC R . Profit before Interest and Tax _ i,70,000 = 3 . 4 times

1n eres overage atio = Total Interest - 50,000
Worlcing Note
Profit before Interest and Tax= Profit after Interest and Tax+ IntereSr + Tax
= 90,000 + (5,001000 X 100/o) + 30,000 = f 1,70,000

. tary Rati
(c) Propne Shareholders' Funds 4, 70,000 _ 0 75 .1
o=----- = . - · ·
Total Assets 6, 25, 000
Worlcing Note '
Total Assets= Fixed Assets + Current Assets= 5,05,000 + 1,20,000 =~ 6, 2 5,000

28. (i) The following information is available from the books of Greg Good~ Ltd
Particulars Amt (~)

Equity Share Capital 1,00,000

8% Preference Share Capital 40,QOO
Reserves and .Surplus 60,000 .
Investments 30,000
Current Assets 70,000
Proprietary Ratio is 0.8 : 1
Assuming that there are no fictiticms assets, calculate the value of the property, plant and
equipment and intangible asse~ of the company. ..
(ii) The following figures have been extracted from the records of Allen Cosmetics Ltd
Particulars Amt (t)

· Cost of Revenue from Operati_ons (Cost of goods sold) 4,00,000

Current Liabilities 90,000
Pro~it Margin is equal to 20% on Revenue from Operations
Working Capital Turnover Ratio is equal to 10 times.

Determine the value of the current assets of the company.

( iii) The following details are available from the books of Simon Gadgets Ltd
Particulars Amt (t)
Revenue from Operations (Sales) . 8,00,000
Opening Inventory 40,000
Closing Inventory 50,000
Gross Profit Ratio is 20%
Calculate the stock turnover ratio of the company (upto two decimal places).
(iv) The following data is available from the records ofJohnson and Company.Ltd
Particulars · Amt ({)
Stock 50,000
Sundry Debtors 40,000
Bills Receivable 10,000
Advances Paid 4,000
Cash in Hand 30,000
Sundry Creditors 60,000
Bills Payable 40,000
Ratio Ana lysis
307

Particulars Amt {f)

Bank Overdraft .
Reserves 4,000
10% Preference Share Capital 70,000
Equity Share Capital 5,00,000
·
Net Profit after Tax 1;00,000
1,40,000
Calculate the following (upto two decimal plac
es)
(a) Cur rent ratio (b) Qui ck ratio
2013
Ans (i) Prop rieta ry Ratio = Shareholders' Funds
• Total Assets
Working Not ~
l . Shar ehol ders , Fun ds= Equity Shar e Cap
ital+ 8% Preferenc~ Shar e Cap ital+ Rese rve
and Surp lus
= 1,00 ,000 + 40,0 00 + 60,0 00 = f 2,00 ,000
2. As, propri,etary ratio = o.8: 1 ~ o.8 = 2 0
, 0,00 0
. Total Assets
Total Ass ets= 2,oo,ooo = ~ 2,50,000 .
0.8
3. Tota l Asse ts = P.roperty, Plan t and Equ ipme
n.t and In~angible Asse ts+ Curr ent Asse ts+ inve
2,50 ,000 = Prop erty , Plan t and Equ ipm ent stm ents
and Inta ngib le Ass ets+ 70,0 00 + 30,0.00
Prop erty , Plan t and Equ ipm ent and Inta ngib
le Ass ets= 2,50 ,000 - 1,00 ,000 = ~ 1,50 ,000
•t
' ) ·ur ki
(• nor ng C ap1·tat 11urnover Rati·o = Revenue from Operations {Net sales) 4,00,000
Working Capital
. = -'----'--- = -8 = 8 :-1
50,000 1
Working Note s
1. Rev enue from Ope ratio ns= Cost of Revenue
from Ope ratio ns + Gross Prof it
2. Cos t of reve nue from oper atio ns or Cos
t of good s sold =t 4,00 ,000
3. Prof it mar gin= 20% on selli ng price
20% on selli ng pric e= 25% on cost pric e
Hen ce, Gro ss pro fit= ~ x 4,oo,ooo = ~ 1,00,000
· 100
4. Rev enue from Ope ratio ns (Net sale s)= 4,00
,000 + 1,00 ,000 = f 5,00 ,000
5. Wor king capi tal turn over ratio =10 time
s
. 5,00 ,000
10
Wor king Capital
Wor king capi tal= 5,oo,ooo = f 50,000
10
6. Wor king Cap ital= Cur rent Asse ts -
Cur rent Liabilities
50,0 00 = Cur rent Asse ts - 90,0 00
Current Asse ts= t 1,40 ,000
. Cos t of Revenue from Operations
(iii) Inve ntor y Tur nove r Ratio =
Avera I
ge nven tory
Inve ntor y Tur nove r Rati.o = 6,40,000 = 14 22 ti.
. mes
45,000
308 chapterw ise ISC Solved Papers Accounts (Class XII)

Working Notes
1. Cost of Revenue from Operations = Revenue from Operations - Gross Profit
Gross Profit= 20 x 8,00,000 = ~ 1,60,000
100
Cost of Revenue from Operations = 8,00,000 - 1,60,000 = ~ 6,40,ooo
Opening Inventory+ Closing Inventory 40,ooo + so,ooo t45,ooo
2 . Average Inventory=....:...E....:..:..:.::..:..::.!e~_.:_:_:.:..:..:..:.L---=----""---~ = .
2 2

(iv) (a) Current Ratio= Current Assets = 1,34,000 = 1_29 : 1

Current Liabilities 1, 04, 000
Working Notes
1. Current Assets= Stock+ Debtors+ Bills Receivable+ Advances Paid+ Cash
= 50,000 +40,000 + .1 0,000 +4,000 + 30,000 = ~ 1,34,000
2 . Current Liabilities = Bills Payable + Overdraft + Creditors

.
=40,000 +4,000 + 60,000 = ·t 1,04,000
.
(b) Quick Ratio= Quick Assets = 80,000 = _ 0_77 : 1 .
Current Liabilities 1, 04, 000
Working Note
Quick Assets = Debtors + Bill Receivable + Cash
=40,000 + 10,000 + 30,000 = t 80,000
29. From the following information, calculate (upto two decimal places)
(i) Liquid ratio (ii) Current ratio
(iii) Proprietary ratio (iv) Working capital turnover ratio
.(v) Gross profit ratio (vi) Operating ratio
(vii) Net profit ratio
Particulars Amt(~)

Cost of Revenue from Op_erations 6,00,000

Operating Expenses 50,000
Revenue from Operations 8,00,000
Sales Returns 10,000
Total Current Assets . 3,00,000
Total Current Liabilities 1,00,000
Total Assets 7,00,000
Closing Stock 30,000
Prepaid Insurance 5,000
Preliminary Expenses 6,000
Share Capital 5,60,000
Reserves and Surplus 40,000

2012
Ratio Analysis 309

Ans (i) Liquid Ratio= Liquid Assets _ 2,65,000

Current Liabilities -1,00,000 = 2.65:1
Working Note
.
Liquid Assets= Current Asse t s - Cl osmg
. Inventory - Prepaid Insurance
= 3,00,000 - 30,000 - 5,000 =~ 2,65,000

(ii) Current Ratio = Current Assets _ 3, 00, 000

3 1
Current Liabilities - 1, 00, 000 = :

(iii) Proprietary Ratio = Shareholders' Funds _ 5,94,000 0

Total Assets - 7,00,000 x lOO =84.86 Vo
Working Note

Shareholde rs' Funds= Share Capital+ Reserves and Surplus

= 5,60,000 + 3.4 ,000 = ~ 5,94,000

(iv) Working Capital Turnover Ratio= Revenue from Operations (Net sales)
Working Capital

= 7,90,000 = 3.95 times

2,00,000
Working Note
1. Revenue froi:n Operations (Net sales)= Revenue from Operations - Sales Return
=8,00,000 -10,000 =~ 7, 90,000
2 . Working Capital =Current Assets-Cu rrent Liabilities
= 3,00,000 - 1,00,000 = ~ 2,00,000
Gross Profit 1,90,000 11
(v) G ross Profi t R atio = . x 100 = - - - x 100 = 24.050,o
Revenue from Operations (Net sales) 7,90,000

Working Note
Gross Profit= Revenue from Operations (Net sales) - Cost of Goods Sold (Cost of revenue from
operations)
= 7,90,000 - 6,00,000 = ~ 1,90,000

_ . . Operating Cost _ 6,50,000 _8 ,_

(vi) Operating Ratio = _ _ _ _..____ -=----- - - x 100 - - - - x 100 - 2 . 280ro
Revenue from Operations (Net sales) 7,90,000

Working Note
Operating Cost= Cost of Revenue from Operations + Operating Expenses
= 6,00,000 + 50,000 = ~ 6,50,000

.. . Net Profit _ 1,40;000 _

(vu) Net Profit Ratio = - - -- - - - ----:----- :-- x 100 - - --- x 100 -17. 72 0Vo
, sales}
Revenue from Operations (Net 7,90,000

Working Note
Net Profit= Gross Profit - Operating Expenses
= 1,90,000 - 50 ,000 =~ 1,40,000
310 Chapter wise ISC Solved Papers Account s (Class XII)

nd
30. The following figure have been extracted from the books of Arvind a Compan y Ltd
Amt(~)
Particulars
12.00,000
Net Sales (Revenue _from operations)
5,00,000
Net Purchases
65,000
Administrative Expenses
35,000
Selling and Distribution Expenses
20% on sales
Gross Profit
10,00,000
Net Profit after Tax
40,00,000
Total Assets
10,00,000
Equity Share Capital oft 10 each
3,00,000
10% Preference Share Capital fort 10 each
2,00,000
Reserves and Surplus
8,00,000
8% Debentures
1,20,000
Opening Debtors
80,000
Closing Debtors
60,000
Opening Bills Receivable
40,000.
Closing Bills Receivable
1,30,000
Opening Creditors
70,000
Closing Creditors
50,000
Closing Bills Payable
1,10,000
Opening Bills Payable

From the above information, calculate the following

(i) Total assets to debt ratio (ii) Debt equity r~tio
(iii) Operatin g ratio , (iv) Operatin g profit ratio
(v) Ea.nlll1g per share · (vi) Debtors turnover ratio
(vii} Creditor s turnover ratio
Note All calculations are to be made to two places of decimal. 2011

40,00,000
(i') ~
tal Assets to Deb ts Ra.tio = - Total
- -Assets
--- =- - - - = 5 :1
Ans 1.0
Long-term Debts 8,00,000

..) D b E . R . 8,00,000
Debt / Long -term Debts - = - 0
(u e t qt11ty atio = - - - - ~ - - -- - - = 53 · I
Equity/Shareholder s' Funds 15,00,000 · ·

Working Note
Sharehol ders' Funds= Equity Share Capital+ Preferenc e Share Capital+ Reserve and Surplus
=10,00,000 + 3,00,000 + 2,00,000 =t 15,00,000
Operating Cost
--
(iii) Operatin g Ratio = - - - -~ - ~ - - - -sales)
Revenue from Operations (Net
Cost of Revenue from Operations + Operating Expenses
or = . x l00
Revenue from Operations (Net sales)
- = 10,60,000 x lO0 =88. 33%
12,00,000
Ratio Analysis 311

Working Notes
1. Cost of Revenue from opera t"ions= Net Revenue from Operations
·
-Gross Pro_fit
= 12,00,000 -(20% of 12,001000)
. = 12,00,000-2,40,000 =f 9,60,000
2
· Operating Cost =Cost of Revenue from Operations +Operating Expenses
·=9,60,000 +(65,000 +35,000) =' 10,60,00~
(iv) Operating Profit Ratio= Operating Profit xlOO ~ 1,40,000 xlOO = 11.670/o
Revenue from Operations (Net Sales) · 12,d0,000
Working Note

Operating Profit =Net Revenue from Operations-Operating Cost

= 12,00,000 -10,60,000 =' 1,40,000
(v) Earning Per Share= Net Profit Available to Equity Shareholder~= 10,00,000-30,000 = ~ 9 _70
Number of Equity Shares 1,00,000

(vi) Debtors_Turnover Ratio= Revenue from Operations (Net credit sales)= 12,00,000 =8 times
Average Trade Receivable 1,50,000
Working Note
Average Trade Receivables
= Opening Debtors+ ClosiI).g Debtors+ Opening Bills Receivable+ Closing Bills Rece·ivable
2
1, 20,000 + 60,000 + 80,000 + 40,000 ., O
= - - - ' - -- ----'------'--------'----'--- = '\ 1, 5 ,ooo
2 !

(vii··) C red't
1 11urnover
Rati'o = -Net
-- Credit
- -Purchases
- - - - = _.5,00,000
....;__ _ = 2. 77 : 1
Average Trade Payables 1,80,000
Working Note
Average Trade Payables= Opening Creditors+ Opening Bills Payable+ Closing Creditors+ Closing Bills Payable
. . 2 -
= 1,30,000 + 1,10,000 + 70,000 + 50,000 =' 1,80,000
2

31. ·From the given information, calculate the following ratios

(i) Debt equity ratio (ii) Total assets to debt ratio
(iii) Oper_ating ratio (iv) Debtors turnover ratio
(v) Creditors turnover ratio
Particulars Amt (t)
Shareholders' Funds 50,000
10% Debentures 25,000
Total Assets 1,75,000
Credit Sales (Revenue from operations) 2,70,000·
Credit Purchases 1,80,000
Average Debtors 30,000
. Average Creditors~ 16,000
Cost of Goods Sold (Cost of revenue from operations) 2,16,000
Operating Expenses 24,000

Note All calculations are to be made to two places of decimal. 2009

 312 Cha~terwise ISC Solved Papers Accounts (Class XII)

Ans .) D b . . Debt /Long-term Debts _ 25,000 - l · 2

(1 e t EqUity Ratio= __:::....:.::..:___~....!aL------=:---=-- - - ·
Equity / Shareholders' Funds 50,000
Working Note
Long-term Debts= 10% Debenture =t 25,000
Total Assets 1,75,000
( ii) Total Assets to Debt Ratio = L D b = 000 = 7 : l
ong-term e ts 25,
. . Co.st of Revenue from Operations+ Operating Expenses l00
(iii) Operatmg Rat10 = ---------=--------=----=--------"--- x
Revenue from Operations
·= 2,16,000 + 24,000 x l00
2,70,000
= 2, 40,000 x l00 = 88.89%
2,70,.000

(l.v) D e btors -r.

.1urnover R a t·10 = -
Revenue from Operations (Net credit
--------'--------''---- -- sales)
--'-
Average Trade Receivables

.2,'l0,000 g .
= - - - = times
30,000
Working Note

i~ Average Trade Receivable= Average Debtors.= t 30,000

··':, ..
'_,. ·. . : "-(· ,\ C d"t -r. R t· Net Credit Purchase 1,80, 000 11 25 t·
.( , . v1 re 1 ors .1urnover a 10 = · = = . 1mes
,, ,-,.. Average Trade Payable 16,000
,.
_Working Note
-. Average Trade Payable =Average Creditors= t 16,000

32~. Calculate the followiQg_ratios froqi the given information

(i) Acid test ratio (ii) Gross profit ratio
(iii) Stock turnover ratio (iv) Operating ratio
(v) Debt equity ratio
Statement of Profit and Loss
for the year ended ...
Particulars Note No. Amt m
I. Revenue from Operations 5,00,000
II. Expenses
Purchase of Stock-in-trade 2,00,000,
Change in Inventories 1 (30,000)
Other Expenses 2 1,25,000
Total Expenses 2,95,000
Ill. Profit before Tax (1-11) 2,05,000
IV. Provision for Tax 40,000
V. Profit after Tax (Ill - IV) 1,65,000
Ratio Analy sis
313
Notes to Accounts

Particulars
1. Changes in Inventories Amt (f)

Opening Inventory
(-) Closing Inventory 50,000

2. Other Expenses (80,000) (30,000)

Administrative Expenses
Selling Expenses 20,000
30,000
Finance Expenses (Interest on long-term loan)
Direct Expenses 25,000
50,000
1,25,000
Balance Sheet
as at 31st March 2012
'
Particulars
Note No. Amt (f)
I. EQUITY AND LIABILITIES
1. Shareholders' Funds
(a) Share Capital
(bl Reserves and Surplus 1 7,00,000
2. Non-current Liabilities 2 1,11 ,000
Long-term Borrowings
1,50,000
3. Current Liabilities
Trade Payables
3 24,000
Total
9,85,000
II. ASSETS
1. Non-current Assets
Property, Plant and Equipment
7,20,000
2. Current As·sets
(a) Inventory
80,000
(b) Trade Receivables
1,20,000
(c) Cash and Cash Equivalents
4 60,000
(d) Other Current Assets
5 f--
5,000
Total
9,85,000
-
Notes to Accounts
- - - - -- -- - - - - -- - -- - - - - - - - - - - - -
Particulars
Amt m
1. Share Capital
Equity Share Capital
4,000 Equity Shares of~ 100 each
4,00,000
Preference Share Capital
3,000, 5% Preference Shares of~ 100 each
3,00,000
7,00,000
 Chap terw ise ISC Solved Papers Acco unts (Class XII)
314
Amt(?)
-
Particu lars -- -
2. Reserve and Surplus 5,000
Reserves 1,06,000
Statement of Profit and Loss 1,11,000
-
3. Trade Payables 20,000
Creditors 4,000
Bills Payable 24,000
---=

4. Cash and Cash Equivalents 15,000

Casi'! Balance 45,000
Bank Balance 60,000

5. Other ·current Assets 5,000

Prepaid Expenses
2007

.) A .d ~ Ra . _ Liquid _ 0 -_ 7.5 .• l
1,80,00__
_ _ _- _;__.;__
Assets
A ns (i c1 .test ho - _ __.___ Liabili ties 24,000
Liquid
Working Notes
1.Liquid Assets =Trade Receivables + Cash + .Bank
=1,20, 000 + 15,000 + 45,000 =t 1,80,0 00
2. Liquid Liabilities =Cred itors+ Bills Payabl e= 20,000 +4,000 = t 24,000
Profit 2,80,00
-- 0 x lOO = 56011,o
..) G ross p rofi1t R atio
u
. =- - - - - Gross
- - -- - - - - x 100 =-
( Revenue from Operat ions (Net sales) 5, 00, 000

Working Notes
tions (WN2)
1.Gross Profit= Revenue from Opera tions - Cost of Reven ue from Opera
. = 5,00,0 00 - 2,20,0 00 ~ 2,80,0 00
Direct Expen ses
2. Cost of Revenue from Opera tions= Openi ng Invent ory+ Purch ases+
- Closing Inventory
= 50,000 + 2,00,0 00 + 50,000 - 80,000 = ~ 2,20,0 00

.turnover Rabo
...) S toek rr.
m _of
Cost
. =_ __ ue
_Reven _ _Operat
_from _._____ions _ _of goods sold)
_...:(Cost _.!.. ___.!,!.....__ _

( Average Invent ory

= 42 0,000 = 3.38 times
65,000
Working Note
Openin g Invent ory+ Closin g Invent ory 50,000 +80'ooo = t 65 ooo
~ -----..::...::...::.!... -
Average Invent ory _..__- -"'_ _ _ -!.,.__ _

2 '
2

. =_
. g Ratio Cost of Reven ue from_Operat ions + Opera
__.___ ___ ting Expen ses
. ! . . . _ _ ~ _ L _ _ _ x 100
.
w 1 peratm ___ ___
( 10
Revenue from Operat ions (Net sales)
= 2,20,000 + (20,000 + 30,000) X _ 0
5 00 000 lOO - 54 1/o
' '
. R . Debt / Long~term Debts 1, 50,000
. D b
( v11 e t
E
qmty atio - - - =--- - - - =-8,11,-000 =0.18 ·. I
=-Equity I Shareholders' Funds
Ratio Analysis 315

Working Note
Shareholders' Funds= Equity Share Capital + Preference Share Capital + Reserves
+ Statement of Profit and Loss
=3,00,000 + 4,00,000 + 5,000 + 1,06,000 =" 8,11,000
33. Statement of Profit and Loss
for the year ending 31st March
Particulars Note No. Amt(~
-
I. Revenue from Operations 1:00.100
II. Other Income 1 1,200
Ill. Total Revenue 1,01,300
IV. Expenses
Purchase of Stock-in-trade 63,050
Changes in Inventories 2 (4,350)
Employee Benefit Expenses 3 1,000
Other Expenses 4 24,800
Total Expenses . 84,500
V. Profit before tax (Ill-IV) 16,800
.
f:lotes to Accounts
Particulars Amt(~)

1. Other Income
No_n-operating Income 1 200
2. Changes in Inventories
Opening Inventory 15,250
(-) Closing Inventory (19,600) (4,350)

3. Employee Benef_"rt Expenses

Wages 1,000
4. Other Expenses
Admi~istrative Expenses 20,200
Selling and Distribution Expenses 2.400
Finance Expenses 1,400
Non-operating Expenses 400
Carriage Inward 400 24,800

Balance Sheet
Particulars Note No. Amt(~)

I. EQUITY AND LIABILITIES

Shareholders· Funds
Share Capital 70,000
Reserves and Surplus 18,000
Current Liabilities
Trade ~ayables (Creditors) 3,700
Total 91,700
316 Chapterwise ISC Solv~d Papers Accounts (Class XII)

Particulars Note No. Amt (t)

II. ASSETS
Non-current Assets
Property, Plant and Equipment 60,100
Current Assets
Inventories 19,600
Trade Receivables (Debtors) 9,000
Cash and Cash Equivalents 3,000
Total 91.700

Notes to Accounts

Particulars Amtm
1. Reserves and Surplus
Reserves 1,200
Statement of Profit and Loss 16,800
18,000

From the above, calculate the following ratios

(i) Gross profit ratio(%) (ii) Net profit ratio (%)
(iii) Stock turnover ratio (iv) Proprietary ratio
(v) Current ratio (vi) Qukk ratio
Note All calculations are to be made to two places of decimal. 2005

• G ross Pro61t Ratio

Ans (;) . = - -- - -
Gross
-- Profit
- - - - - x 100
Revenue from Operations (Net sales)

= 40,000 x l0O = 39 .96%

1,00,100
Working Notes
1. Gross Profit= Revenue from Operations - Cost of Revenue from Operations
= 1,00,100 - 60,100 =t 40,000
2. Cost of Revenue from Operations =Opening Inventory+Purchases- Closing Inventory
+ Direct Expenses (Carriage inwards+ Wages)
=> 15,250 +63,050 - 19,600 +(400 + 1,000) = ~ 60,100
. Net Profit
(ii) Net Profit Ratio =- -- - - -- - - - - x l00
Revenue from Operations (Net sales)

= 16,S?O x l00 =16 . 78%

1,00,100
. ") S k R . Cost of Revenue from Operations (Cost of goods sold)
( m toe 11umover atio = - - - -- - -- -- - - ' ----""- ----'-
Average Inventory
6
= 0,IOO = 3. 44 times
17,425
Ratio Analysis 317

Working Note
Average Inventory= Opening Inventory+ Closing Inventory
2
_ 15,250 + 19,600 •
- =,17,425
2
(iv) Proprietary Ratio = Shareholders' Funds = 88.,000 = _
0 96 times
Total Assets 91,700
Working Notes ·
1. Shareholders> Funds= Share Capital+ Reserves + Statement of Profit and Loss
=70,000 +· 1,200 + 16,800 = ~ 88,000
2. Total Assets= Non-current Assets + Current Assets
=60,100 + (19,600 + 9,000 + 3,000) =t 91,700
(v) Current Ratio _- Current Assets = 31,600 = 8 _54 : 1
Current Liabilities 3,700
Working Note
Current Asse.ts =Inventory+ Debtors +Bank= 19,600 + 9,000 + 3,000 = t 31,600
.) n, . k Ra. · _ Quick Assets _ 12,000 _ 3 24 . 1
(vi x,.UlC tio - --=------- - - - - . .
Current Liabilities 3,700
Working Note
Quick Assets= Debtors +Bank= 9,000 + 3,000 = ~ 12,000