SHATABDI EXPRESS------------------------- RATIO ANALYSIS



RATIO ANALYSIS

Qs. 1 From the following information calculate following ratios :

1) Net Profit Ratio (2) Debt-Equity Ratio (3) Quick Ratio (4) Current Ratio

(5) Return on Investment ( 6) Proprietary Ratio.

Equity Share capital 20,00,000

Capital Reserve 2,00,000

9% Debentures 8,00,000

Net Sales 14,00,000

Gross Profit 8,00,000

Indirect Expenses 2,00,000

Current Assets 4,00,000

Current Liabilities 3,00,000

Opening Stock 50,000

Tax paid during the year 40%

Closing Stock – 20% more than opening stock.

Qs. 2 (a) A company’s Stock Turnover is 5 times. Stock at the end is Rs. 20,000 more than that at the beginning. Sales are Rs. 8,00,000. Rate of Gross Profit on cost is ¼. Current Liabilities Rs. 2,40,000. Acid Test Ratio 0.75. Calculate Current Ratio.

(b) Cash Sales of a company is 1/3rd of credit Sales. Stock Turnover Ratio is 5 times. Closing Stock is Rs. 8,000 more than opening stock and closing debtors are 2/3rd of opening debtors. Closing debtors are Rs. 40,000 and Opening stock was Rs. 60,000. Gross Profit is 20% on Sales. Calculate Debtors Turnover Ratio.

Qs. 3 From the following information calculate the following ratios:

1) Gross Profit Ratio (2) Working Capital Turnover Ratio (3) Proprietary Ratio

Paid up capital Rs. 8,00,000

Current Assets Rs. 5,00,000

Credit Sales Rs. 3,00,000

Cash Sales 75% of Credit Sales

9% Debentures Rs. 3,40,000

Current Liabilities Rs. 2,90,000

Cost of goods sold Rs. 6,80,000

Qs. 4 (a) Profit before Interest and Tax (PBIT): Rs. 2,00,000; 10% Pref. Shares of Rs. 100 each: Rs. 2,00,000; 20,000 Equity Share of Rs. 10 each; Rate of Tax @ 50%. Calculate Earning per share(EPS).

(b) Calculate the amount of opening debtors and closing debtors from the following figures:

Debtors turnover ratio 4 times

Cost of goods sold Rs. 6,40,000

Gross profit ratio 20%

Closing debtors were Rs. 20,000 more than at the beginning.

Cash Sales being 33 1/3% of credit sales.

Qs. 5 The following information is provided to you

Debtor turnover ratio : 4 time, Stock Turnover Ratio : 8 times, Current Ratio : 3 , Average Debtors : Rs. 1,80,000, Working Capital Turnover Ratio : 8 times ,Cash Sales : 25% of total sales, Gross Profit Ratio : 33 1/3%, Closing Stock Rs. 10,000 in excess of Opening Stock, Based on the above information calculate (a) Sales, (b) Cost of goods sold and (c) Closing stock.

Qs 6 The Profit and Loss Account of S Ltd for the year ended 31.3.2008 and the Balance Sheet of the Company as on 31.3.2008 is given below:

Profit and Loss Account

For the year ended 31.3.2008

|Particulars |Rs. |Particulars |Rs. |

|Opening Stock | 40,000 |Sales | 4,40,000 |

|Purchases |2,50,000 |Closing stock |20,000 |

|Direct Expenses |30,000 | | |

|Gross Profit |1,40,000 | | |

| | | | |

| |4,60,000 | |4,60,000 |

| | | | |

|Salary |32,000 |Gross Profit |1,40,000 |

|Loss on Sale of Building |8,000 | | |

|Net Profit |1,00,000 | | |

| |1,40,000 | | 1,40,000 |

Balance Sheet

as on 31st March, 2008

|Liabilities |Rs. |Assets |Rs. |

|Equity Share Capital |3,00,000 |Land | 4,00,000 |

|Profit and Loss Account |1,00,000 |Stock |20,000 |

|Debentures |1,50,000 |Debtors |1,00,000 |

|Outstanding Salary |50,000 |Cash |80,000 |

| |6,00,000 | | 6,00,000 |

On the basis of the information given in these two statement, calculated the following ratios:-

1) Current Ratio (2) Quick Ratio (3) Gross Profit Ratio (4) Net Profit Ratio

(5) Return on Equity (6) Return of Investment (7) Stock Turnover Ratio

Qs 7 The Profit and Loss Account of Kanika Ltd for the year ended 31.3.2009 and the Balance Sheet of the Company as on 31.3.2009 is given below:

Profit and Loss Account

For the year ended 31.3.2009

|Particulars |Rs. |Particulars |Rs. |

|Opening Stock | 1,50,000 |Sales | 10,00,000 |

|Purchases |3,00,000 |Closing stock |2,50,000 |

|Direct wages |2,00,000 |Profit on sale of shares |50,000 |

|Manufacturing Expenses |1,00,000 | | |

|Administrative Expenses |50,000 | | |

|Selling & Distribution Exp. |50,000 | | |

|Loss on sale of Plant |55,000 | | |

|Interest on Debentures |10,000 | | |

|Net Profit |3,85,000 | | |

| |13,00,000 | | 13,00,000 |

Balance Sheet

as on 31st March, 2009

|Liabilities |Rs. |Assets |Rs. |

|Equity Share Capital |1,00,000 |Fixed Assets |2,50,000 |

|Preference Share Capital |1,00,000 |Stock |2,50,000 |

|Reserve |1,00,000 |Sundry Debtors |1,00,000 |

|Debentures |2,00,000 |Bank |30,000 |

|Sundry Creditors |1,00,000 |Discount on issue of share | |

|Bills Payable |50,000 | |20,000 |

| |6,50,000 | |6,50,000 |

On the basis of the information given above, calculated the following ratios

(1) Current Ratio (2) Quick Ratio (3) Gross Profit Ratio (4) Net Profit Ratio

(5) Return on Equity (6) Return of Investment (7) Stock Turnover Ratio (8) Operating Ratio.

Qs. 8 Following information is provided to you:

Rs.

(i) Cash Sales 2,68,000

(ii) Credit Sales 5,36,000

(iii) Gross Profit 1,34,000

(iv) Inventory Turnover Ratio 5 times

Calculate the value of opening and closing stock in each of the following cases:

Case 1: If closing stock is 3 times that in the beginning.

Case 2: If closing stock is 3 times more than that in the beginning.

Case 3: If closing stock is 1/3 of opening stock.

Case 4: If closing stock is Rs. 40,000 more than opening stock.

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