Accountancy, asked by mohdadeebabis, 3 months ago

1. From the following information, calculate the following ratios:
a) Liquid Ratio
b) Inventory Turnover Ratio
c) Return On Investment
Information:
CAL
Inventory in the beginning
50,000
Inventory at the end
60,000
Revenue from operations
4,00,000
Gross Profit
1,94,000
Trade Receivables
40,000
Trade Payables
1,00,000
Other Current Liabilities
1,90,000
Share Capital
70,000
Reserve and Surplus
2,00,000​

Answers

Answered by raziakhaleel19874
2

Answer:

(i) Quick Ratio = Quick AssetsCurrent Liabilities

Quick Assets = Cash + Debtors

= 40,000 + 1,00,000

= 1,40,000

Current Liabilities = Creditors + Outstanding Expenses

= 190,000 + 70,000

= 260,000

Quick Ratio =

1,40,0002,60,000=7:13=0.54:1

(ii) Inventory Turnover Ratio =

cost of Revenue from OperationsAverage Inventory

Cost of Revenue from Operations = Revenue From Operations - Gross Profit

= 4,00,000 - 1,94,000

= 2,06,000

Average Inventory =

Inventory in the beinning + Inventory at the end2

= 50,000+60,0002

= 55,000

Inventory Turnover Ratio =

2,06,00055,

= 3.74 times

Return on Investment =

Profit before Interest and taxCapital Employed

x 100

Capital Employed =

Equity Share Capital + Profit and Loss

= 2,00,000 + 1,40,000

= 3,40,000

Return on Investment =

1,40,0003,40,000

= 41.17 %

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