Compute Gross Profit Ratio- Working capital Turnover Ratio- Debt Equity Ratio- and Proprietary Ratio from the following information - Items amp- Rs- Paid - up Capital amp- 5-00-000- Curret Assets amp- 4-00-000- Net Sales amp- 10-00-000- 13 -

(i) Gross Profit Ratio = Gross Profit/Net Sales× 100 nbsp;Gross Profit = Net Sales – Cost of Goods Sold = Rs. 10,00,000 nbsp; – Rs. nbsp;6,0 ...

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Byju's Answer

Standard XII

Accountancy

Current Ratio

Compute Gross...

Question

Compute Gross Profit Ratio, Working capital Turnover Ratio, Debt Equity Ratio, and Proprietary Ratio from the following information
$\begin{matrix} Items & Rs. Paid - up Capital & 5, 00, 000 Curret Assets & 4, 00, 000 Net Sales & 10, 00, 000 13% Debentures & 2, 00, 000 Current Liability & 2, 80, 000 Cost of Goods Sold & 6, 00, 000 \end{matrix}$

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Solution

$(i) G r o s s P r o f i t R a t i o = \frac{G r o s s P r o f i t}{N e t S a l e s} \times 100$

$G r o s s P r o f i t = N e t S a l e s - C o s t o f G o o d s S o l d = R s . 10, 00, 000 - R s . 6, 00, 000 = R s . 4, 00, 000$

$G r o s s P r o f i t R a t i o = \frac{R s . 4, 00, 000}{R s . 10, 00, 000} \times 100 = 40 %$

$(i i) W o r k i n g C a p i t a l T u r n o v e r R a t i o = \frac{N e t S a l e s}{W o r k i n g C a p i t a l}$

$W o r k i n g C a p i t a l = C u r r e n t A s s e t s - C u r r e n t L i a b i l i t i e s = R s . 4, 00, 000 - R s . 2, 80, 000 = R s . 1, 20, 000$

$Working Capital Turnover Ratio = \frac{R s . 10, 00, 000}{R s . 1, 20, 000} = 8.33 t i m e s$

$(i i i) D e b t E q u i t y R a t i o = \frac{D e b t}{E q u i t y} = \frac{2, 00, 000}{5, 00, 000} = 2 : 5 = 0.4 : 1$

$(i v) P r o p r i e t o r y R a t i o = \frac{S h a r e h o l d e r s F u n d s}{T o t a l A s s e t s}$

Total Assets = Total Liabilities
Total Liabilities = Paid up Capital + Debentures + Current Liabililties
= Rs. 5,00,000 + Rs. 2,00,000 + Rs. 2,80,000 = Rs. 9,80,000
Proprietary Ratio
= $\frac{R s . 5, 00, 000}{R s . 9, 80, 000} = 25 : 49 = 0.51 : 1$

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Similar questions

Compute Gross Profit Ratio, Working Capital Turnover Ratio, Debt Equity Ratio and Proprietary Ratio from the following information:

	Rs
Paid-up Share Capital	5,00,000
Current Assets	4,00,000
Revenue from Operations	10,00,000
13% Debentures	2,00,000
Current Liabilities	2,80,000
Cost of Revenue from Operations	6,00,000

Q. From the information given below, calculate any three of the following ratio:

(i) Gross Profit Ratio;
(ii) Working Capital Turnover Ratio:
(iii) Debt to Equity Ratio; and
(iv) Proprietary Ratio.

	₹		₹
Revenue from Operations (Net Sales)	5,00,000	Current Liabilities	1,40,000
Cost of Revenue from Operations (Cost of Goods Sold)	3,00,000	Paid-up Share Capital	2,50,000
Current Assets	2,00,000	13% Debentures	1,00,000

Q. From the following calculate
(a) Debt Equity Ratio
(b) Total Assets To Debt Ratio
(c) Propietory Ratio

$\begin{matrix} Items & Amt. (Rs.) Equity Share Capital & 75, 000 Preference Share Capital & 25, 000 General Reserve & 50, 000 Accumulated Profits & 30, 000 Debentures & 75, 000 Sundry Creditors & 40, 000 Outstanding Expenses & 10, 000 Preliminary Expenses to be written off & 5, 000 \end{matrix}$

Calculate (i) Debt-Equity Ratio; (ii) Total Assets to Debt Ratio; and (iii) Proprietary Ratio from the following particulars :

$\begin{matrix} Particulars & Rs. Equity Share Capital & 3, 00, 000 Preference Share Capital & 1, 00, 000 General Reserve & 60, 000 Profit & Loss Balance & 40, 000 12 % Mortgage Loan & 1, 80, 000 Current Liabilities & 1, 20, 000 Non Current Assets & 4, 50, 000 Current Assets & 3, 50, 000 \end{matrix}$

What conclusions do you draw from the above ratios ?

Q. From the following information calculate
(i) Gross Profit Ratio
(ii) Inventory Turnover Ratio
(iii) Current Ratio
(iv) Liquid Ratio
(v) Net Profit Ratio
(vi) Working Capital Ratio

$\begin{matrix} Items & Rs. Sales & 25, 20, 000 Net Profit & 3, 60, 000 Cost of Sales & 19, 20, 000 Long term Debts & 9, 00, 000 Creditors & 2, 00, 000 Average Inventory & 8, 00, 000 Current Assets & 7, 60, 000 Fixed Assets & 14, 40, 000 Current Liabillities & 6, 00, 000 Net Profit Before Interest and Tax & 8, 00, 000 \end{matrix}$

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Compute Gross Profit Ratio, Working capital Turnover Ratio, Debt Equity Ratio, and Proprietary Ratio from the following information ItemsRs. Paid - up Capital5,00,000Curret Assets4,00,000Net Sales10,00,00013% Debentures2,00,000Current Liability2,80,000Cost of Goods Sold6,00,000