Question

Stock turnover Ratio is 5 times
Sales (all credit) ₹200000
Gross profit ratio 20%
Current liability ₹60000
Liquid ratio 0.75
Stock at the end, is ₹5000 more than the stock in the beginning
Find current assets

Answer 1

Answer:

if stock converts the ratio of the following time he sales 20%of t he profit so all the stock end in current rate of the value given below and then find ratio

Answer 2

ANSWER :

• ❖ If the Stock Turnover Ratio is 5 times; Sales (all credit) is Rs. 2,00,000; Gross Profit Ratio is 20%; Current Liabilities is Rs. 60,000; Liquid Ratio is 0.75 and Stock at the end is Rs. 5,000 more than the stock in the beginning; then Current Assets will be Rs. 79,500.

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SOLUTION :

❒ Given :-

• Stock Turnover Ratio = 5 times

• Sales (all credit) = Rs. 2,00,000

• Gross Profit Ratio = 20%

• Current Liabilities = Rs. 60,000

• Liquid Ratio = 0.75

• Stock at the end is Rs. 5,000 more than the stock in the beginning.

❒ To Calculate :-

• Current Assets = ?

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❒ Calculation :-

Here,

• Gross Profit Ratio = 20%

• Net Sales = Rs. 2,00,000

Using the formula of Gross Profit Ratio, we get,

• $\bigstar \: \: \sf{Gross \: \: Profit \: \: Ratio = \dfrac{Gross \: \: Profit}{ Net \: \: Sales} \times 100}$

$\longrightarrow \: \sf{20 = \dfrac{Gross \: \: Profit}{2,00,000} \times 100}$

$\longrightarrow \: \sf{Gross \: \: Profit = Rs. \: 40,000}$

So,

• Gross Profit = Rs. 40,000

Using the formula of Cost of Goods Sold, we get,

• $\bigstar \: \: \sf{Cost\: \: of \: \: Goods \: \: Sold = Net \: \: Sales - Gross \: \: Profit}$

$\longrightarrow \: \sf{Cost\: \: of \: \: Goods \: \: Sold = Rs. \: 2,00,000 - Rs. \: 40,000}$

$\longrightarrow \: \sf{Cost\: \: of \: \: Goods \: \: Sold = Rs. \: 1,60,000}$

Again,

• Stock Turnover Ratio = 5 times

• Cost of Goods Sold = Rs. 1,60,000

Using the formula of Stock Turnover Ratio, we get,

• $\bigstar \: \: \sf{Stock \: \: Turnover \: \: Ratio = \dfrac{ Cost\: \: of \: \: Goods \: \: Sold}{ Average \: \: Stock}}$

$\longrightarrow \: \sf{ 5 = \dfrac{ 1,60,000}{ Average \: \: Stock}}$

$\longrightarrow \: \sf{Average \: \: Stock = Rs. \: 32,000}$

Now,

• Stock at the end is Rs. 5,000 more than the stock in the beginning.

Suppose,

• Opening Stock = Rs. X

Then,

• Closing Stock = Rs. (X + 5,000)

Using the formula of Average Stock, we get,

• $\circledcirc \: \: \rm{Average \: \: Stock = \dfrac{O pening \: \: Stock + Closing \: \: Stock}{2}}$

$\longrightarrow \: \rm{32,000 = \dfrac{X + (X + 5,000)}{2}}$

$\longrightarrow \: \rm{32,000 = \dfrac{2X + 5,000}{2}}$

$\longrightarrow \: \rm{X = 29,500}$

So,

• Closing Stock = Rs. (X + 5,000) = Rs. (29,500 + 5,000) = Rs. 34,500

Moreover,

• Liquid Ratio = 0.75

• Current Liabilities = Rs. 60,000

Using the formula of Liquid Ratio, we get,

• $\bigstar \: \: \sf{Liquid \: \: Ratio = \dfrac{Liquid \: \: Assets}{Current \: \: Liabilities}}$

$\longrightarrow \: \sf{0.75 = \dfrac{Liquid \: \: Assets}{60,000}}$

$\longrightarrow \: \sf{Liquid \: \: Assets = Rs. \: 45,000}$

Now, we have,

• Liquid Assets = Rs. 45,000

• Closing Stock = Rs. 34,500

We know that,

• $\dag \: \: \underline{ \boxed{ \bold{ \: Current \: \: Assets = Liquid \: \: Assets + Closing \: \: Stock \: }}}$

Using this formula, we obtain,

• ✪ Current Assets = Liquid Assets + Closing Stock

➨ Current Assets = Rs. 45,000 + Rs. 34,500

∴ Current Assets = Rs. 79,500