Question

calculate
gross profit ratio
return on total assets ratio
inventory turnover ratio and
working capital turnover ratio from the following
sales 25,20,000
net profit 3,60,000
fixed assets 14,40,000
current liabilities 6,00,000
cost of goods sold 19,20,000
current assets 7,60,000
inventory 8,00,000​

Answer 1

Explanation:

1. Gross profit Ratio = 23.80%

2. Return on total Assets = 12%

3. Inventory Turnover Ration = 2.4 Times

4.Working Capital turnover Ratio = 2.6 times or 2 times

Answer 2

1). Gross Profit Ratio = 23.8

2). Return on Total Assets = 12%

3). Inventory Turnover Ratio = 2.4 times

4) Working Capital Turnover Ratio = 2 times

Explanation:

★ 1). Gross Profit Ratio =

$\longrightarrow$ $\dfrac{Gross \: Profit }{Net \: Sales} \times 100$

Gross Profit = Net Sales - Cost of Goods Sold

$\longrightarrow$ 25,20,000 - 19,20,000

$\longrightarrow$ 6,00,000

Gross Profit = 600,000

Gross Profit Ratio =

$\longrightarrow$ $\dfrac{Gross \: Profit }{Net \: Sales} \times 100$

$\longrightarrow$ $\dfrac{6,00,000}{25,20,000} \times 100$

Gross Profit Ratio = 23.8

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★ 2). Return on Total Assets :

$\dfrac{Net \: Profit}{Total \: Assets} \times 100$

$\longrightarrow$ $\dfrac{3,60,000}{30,00,000} \times 100$

Return on Total Assets = 12%

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★ 3). Inventory Turnover Ratio :

$\dfrac{Cost \: of \: Goods \: Sold}{Inventory}$

$\longrightarrow$ $\dfrac{19,20,000}{8,00,000}$

Inventory Turnover Ratio : 2.4 times

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★ 4). Working Capital Turnover Ratio :

Working Capital = Current Assets - Current Liabilities

$\longrightarrow$ (7,60,000 +

8,00,000) - 6,00,000

$\longrightarrow$15,60,000 - 6,00,000

Working Capital = 9,60,000

Working Capital Turnover Ratio =

$\longrightarrow$ $\dfrac{1,920,000}{9,60,000}$

$\longrightarrow$ 2 times

Working Capital Turnover Ratio = 2 times

Therefore,

1). Gross Profit Ratio = 23.8

2). Return on Total Assets = 12%

3). Inventory Turnover Ratio = 2.4 times

4). Working Capital Turnover Ratio = 2 times