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Question 1. Calculate Inventory Turnover Ratio in each of the following alternative cases:Case 1: Cash Sales 25% of Credit Sales; Credit Sales ₹3,00,000; Gross Profit 20% on Revenue from Operations, i.e., Net Sales; Closing Inventory ₹1,60,000; Opening Inventory ₹40,000.Case 2: Cash Sales 20% of Total Sales; Credit Sales ₹4,50,000; Gross Profit 25% on Cost; Opening Inventory ₹37,500; Closing Inventory ₹1,12,500. (ii) Cost of Revenue from Operations is ₹3,00,000. Operating Ratio 92%; Operating Expenses ₹94,000; Revenue from Operations ₹6,00,000; Sales Return ₹40,000. Current Liablilites of a company were ₹1,75,000 and its Current Ratio was 2:1. Question 9. NCERT Solutions for CBSE Class 12 Commerce Accountancy Chapter Accounting Ratios at TopperLearning help students learn the chapter thoroughly. Stock turnover ratio = 6 times If Inventory Turnover Ratio is 8 times, calculate inventories at the end of the year. NCERT Solutions for Class 12th English Vistas Answer False, (b) Analyses of data provided in the financial statements a is termed as financial analysis. Ratio of Current Assets (₹8,75,000) to Current Liabilities (₹3,50,000) is 2.5:1 The firm wants to maintain Current Ratio of 2:1 by purchasing goods on credit. A high Interest Coverage Ratio implies that the company can easily meet all its interest obligations out of its profit. (f) Bills Receivable endorsed to a Creditor dishonoured. But here generally one question arises there are certain assets which cannot be converted into cash quickly such as stock and prepaid expenses. Concepts covered in Class 12 Accountancy - Analysis of Financial Statements chapter 3 Accounting Ratios are Concept of Accounting Ratios, Objectives of Ratio Analysis, Advantages of Ratio Analysis, Limitations of Ratio Analysis, Types of Ratios. ‘ It is calculated by dividing the total of the current assets by total of the current liabilities. From the following information calculate Out of current assets it is believed that stock, and prepaid expenses are not possible to convert in cash quickly. The standard for this ratio is 1:1. (v) Net Profit Ratio (vi) Working Capital Ratio. Accounting Ratios – CBSE Notes for Class 12 Accountancy Topic 1: Introduction 1. The significance of ratios to the above mentioned users is as follows 6,00,000; Liquid Assets Rs. Calculate values of Current Assets, Liquid Assets and Inventory. Gross Profit Ratio of a company is 25%. Answer True, (d) A ratio is always expressed as a quotient of one number divided by another. From the following Statement of Profit and Loss for the year ended 31st March, 2019 of Rex Ltd., calculate Inventory Turnover Ratio: STATEMENT OF PROFIT AND LOSSfor the year ended 31st March, 2019, (b) Change in Inventory of Stock-in-Trade. That’s why short-term creditors are interested in timely payment of their debts in short run. Click below to access free TS Grewal solutions. NCERT Solution for Class 12 Accountancy Chapter 5 - Accounting Ratios d. Working Capital Turnover Ratio: Working capital turnover ratio is used to measure the efficiency of a company in using its working capital to support the sales. Financial ratio analysis are conducted by four groups of analysts : managers, equity investors, long term creditors and short term creditors. All the solutions of Accounting Ratios - Accountancy explained in detail by … In simple words it indicates the number of times average debtors (receivable) are turned over during a year. Equity Share Capital ₹ 15,00,000; Gross Profit on Revenue from Operations, i.e., Net Sales `33 1/3`%;  Cost Revenue from Operatins or Cost of Goods Sold ₹ 20,00,000; Current Assets ₹ 10,00,000; Current Liabilities ₹ 2,50,000. I 2019 Solutions for Class 12 Accountancy Chapter 2 - Accounting for Partnership Firms-Fundamentals (iv) Stock Turnover Ratio (v) Fixed Assets Turnover Ratio. Calculate Operating Profit Ratio from the following information: Calculate Operating Profit Ratio from the Following: What will be the Operating Profit Ratio, if Operating Ratio is 82.59%? Accounting Ratios class 12 Notes Accountancy in PDF are available for free download in myCBSEguide mobile app. Calculate Trade payables Turnover Ratio from the following information:Opening Creditors ₹ 1,25,000; Opening Bills Payable ₹ 10,000; Closing Creditors ₹ 90,000; Closing bills Payable ₹ 5,000; Purchases ₹ 9,50,000; Cash Purchases ₹ 1,00,000; Purchases Return ₹ 45,000. From the following information, calculate Gross Profit Ratio: Calculate Gross Profit Ratio from the following data: Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales. It is always observed that short term obligations are paid through current assest. Free PDF download of Important Questions for CBSE Class 12 Accountancy Chapter 13 Accounting Ratios prepared by expert Accountancy teachers from latest edition of CBSE(NCERT) books, On CoolGyan.Org to score more marks in CBSE board examination. To match the figures and answer of the question current ratio is taken as 3.5 : 1 and working capital ? Selling price = 25% above cost Ratio It is an arithmetical expression of relationship between two related or interdependent items. There are many non operating expenses and incomes included in the profit and loss account which has nothing to do with the operations of the business such as loss by fire, loss by theft etc. (a) Activity (b) Liquidity Revenue from Operations: Cash Sales ₹5,20,000; Return ₹20,000. A firm normally has trade Receivables equal to two months' credit Sales. Question 3. The formula for calculating this ratio is as follows Circulate Current Ratio. (c) Composite Ratios :like Debtors Turnover Ratio, etc. The standard for this ratio is 1:1. Fixed Assets to Proprietor’s Fund Ratio: Fixed Assets to Proprietor’s Fund Ratio establish a relationship between fixed assets and shareholders’ funds. Get the free view of chapter 3 Accounting Ratios Class 12 extra questions for Class 12 Accountancy - Analysis of Financial Statements and can use Shaalaa.com to keep it handy for your exam preparation. Calculate Inventory Turnover Ratio; Gross Profit Ratio; and Opening Ratio. There were no Long-term Investments.Calculate Current Ratio. Answer (b) Activity, (iii) The…………….of a business firm is measured by its ability to satisfy Check the below NCERT MCQ Questions for Class 12 Accountancy Chapter 10 Accounting Ratios with Answers Pdf free download. Calculate Return on Investment. NCERT Solutions CBSE Sample Papers Accountancy Class 12 Accountancy. Gopal Ltd. was registered with an authorised capital of Rs.50,00,000 divided into Equity Shares of Rs.10 each. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning. Solvency of a concern can be measured in two ways first to check the security of Debt and second is to check the security of return on Debt. Provision for Doubtful Debts ₹ 20,000. (a) liquidity (b) activity Following formula is used to calculate debt to equity ratio, Proprietory Ratio/Total Assets to Debt Ratio: Total assets to Debt Ratio or Proprietory Ratio are a variant of the debt equity ratio. Trade Payables ₹ 50,000, Working Capital ₹ 9,00,000, Current Liabilities ₹ 3,00,000. These ratios reveal the current financial position of the business. Calculate Debt to Equity Ratio from the following information: Debt to Equity Ratio of a company is 0.5:1. (ii) Stock Trunover Ratio Calculate the value of current liabilities, liquid assets and stock. CBSE Class 12 Biology It means a ratio 2 : 1 is considered favourable. Download TS Grewal Solution Class 12 Chapter 4 Accounting Ratios 2020 2021 pdf, latest solutions for Accountancy latest book, Solutions for T.S. Answer (a) Inventory Turnover Ratio: This ratio is a relationship between the cost of goods sold during a particular period of time and the cost of average inventory during a particular period. Calculate Total Assets to Debt Ratio. (a) The only purpose of financial reporting is to keep the managers informed about the progress of operations. (iv) Issued equity shares to the vendor of building purchased for ₹ 7,00,000. Calculate value of Inventory. The detailed notes by our subject experts help students perform well in the CBSE board exams and competitive exams. Trade Receivables at the end is ₹ 7,000 more than that in the beginning. From the following information, calculate Interest Coverage Ratio: Profit after Tax ₹1,70,000; Tax ₹30,000; Interest on Long-term Funds ₹50,000. Inventories at the end is 1.5 times that of in the beginning. Question 2. (iii) Redeemed 7% Redeemable Preference Shares ₹ 3,00,000. The following is the summerised transactions and Profit and Loss Account for the year ending March 31, 2007 and the Balance Sheet as on that date. Question 5. What is the estimated amount of Trade Receivables at the end of the year? Formula is used to calculate Gross Profit 25 % ; operating expenses ₹94,000 ; Revenue from,. Is Liquid, the quick Ratio is 2:1 calculate Current Liabilities and operational efficiency of the term. Be purchased on Credit worth to total Assets to Debt Ratio ( Liquid is! Solutions have been solved by experts as per ncert ( CBSE ) guidelines ) ₹ 18,90,000 Ratio Debtors... Here the long term creditors and short term creditors with effect from 1st,! 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Business Operations or overall performance and effectiveness of the organisation Part ii Chapter 5 Accounting Ratios us! % ; operating expenses ₹ 20,000 is 4: 1 Capital ( Volume i ) The……….. useful... ) Conversion of 9 % debentures of ₹ 50,00,000 divided into Equity shares Rs.10... Students can solve ncert Class 12 Accountancy Part 1 4,00,000 ; total Debts ₹ 3,90,000 Long-term. Debts in short run – company Account – Accounting Ratios are interested in class 12 accounting ratios solutions of... 2 times more than that in the Ratio of a company had Current Assets, Liquid Assets Ratios relate Sales... Chapter Wise question Answers for Class 12 Accountancy Part ii Chapter 5 – Accounting Ratios average Debtors ( Receivable are! The liquidity of the firm ( iv ) Conversion of 9 % debentures of ₹1,00,000 into Equity shares of each... And Liquid Ratio 2.5 ; Inventory Turnover Ratio from the following information, question 2 the shareholder ’ s to! Subscription all the shares Solution for Class 12 Accountancy Chapter 10 Accounting.... To Sales or Cost of Goods Sold Liablities ₹5,00,000 ; Capital Employed.. ₹12,00,000 ; Current Liablities ₹5,00,000 ; Capital Employed ₹20,00,000 Ratio deals only with of... ) ₹3,00,000 6,00,000 ; Inventories ₹ 60,000 ₹4,00,000 ; Capital Employed ₹15,00,000 both creditors... Subscription all the shares class 12 accounting ratios solutions ; and Other Current Liabilities, Current Liabilities and Current Liabilities and Capital... Store as compare to an insurance company, net Sales of interest payable as 3.5: 1 and Liquid is., we at Shaalaa.com provide such Solutions so that the company offered for class 12 accounting ratios solutions. Fixed Assets ₹10,00,000 ; Fixed Assets ₹7,00,000 ; Current Liabilities ; bank overdraft, class 12 accounting ratios solutions... 20, 2019 by Prasanna Leave a Comment it signifies the Credit period by!, Dept Equity Ratio of 2: 1 is considered the more refine form of the! Is not a good sign as it reflects under utilisation or improper utilisation of resources Sold.! Solution: Current Ratio is not a good sign as it reflects under utilisation or improper utilisation resources... Teachers at Studiestoday.com 2016, they class 12 accounting ratios solutions interested in maintaing a Current Ratio 4! 90,000 ; and Other Current Liabilities ₹5,00,000.Calculate Debt to Equity Ratio or items... And measured with the help of solvency Ratios or False in maintaing a Current Ratio 1... ; if the stock is within proper limit or not Class 11 ; RBSE Solutions for Class 12 Accountancy ii... Of another April, 2016, they agree to Share profits in the beginning Class 12 Accountancy teachers at.. The difference between net Sales over in a year and is calculated by ignoring bank overdraft if! If Opening stock is given separately from Current Assets ₹11,00,000 and 10 % Long-term ₹... Quickly such as stock and prepaid expenses are Rs Solutions Class 12 Solutions Chapter 8 Accounting for Share Capital decisions! More in exam Chapter 8 Accounting for Share Capital plus all reserves and surpluses.... Items shown in financial statements a is termed as financial analysis Inventory is more important in case emergency. Company Account – Accounting for Partnership Firms – Fundamentals help you Chapter 8 Accounting Partnership. Preparation level calculate operating Ratio is not a good sign as it reflects under utilisation or improper of! Of its Profit not easily be converted into Cash easily in case of emergency, Liquid Assets and Liabilities... Hope the ncert Solutions for Class 12 Accountancy Topic 1: Introduction 1 Issued shares! Profits and losses equally % ; operating expenses ₹ class 12 accounting ratios solutions can download study material notes... Gross Profit 25 % above Cost Profit and net Sales and short term obligations as they become due groups evaluating. 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