Problems Ratio Analysis 1.

The following are the extract for the financial statements of blue and red ltd. as on 31st March, 1997 ad 1998 respectively. Particular 31st March 1997 31st March 1998 Stock 10,000 25,000 Debt 20,000 20,000 Bills receivable 10,000 5000 Advances ( recoverable in cash or 2,000 kind) Cash in hand 18,000 15,000 Bills payable 15,000 20,000 Bank overdraft ------2,000 9 % Debentures,2000 5,00,000 5,00,000 Sales for the year 3,50,000 3,00,000 Gross Profit 70,000 50,000 You are required to compute for both years: i. Current ratio ii. Liquidity ratio iii. Stock turnover ratio iv. Number of days outstanding of debtors v. Stock working capital ratio 2. From the following details prepare a statement of proprietary fund (balance sheet with as many details as possible Stock velocity ratio Fixed Assets Turnover ratio Capital turnover ratio Gross profit turnover ration Debtors velocity months Creditors velocity days The gross profit was Reserves and surplus amounted to Closing stock was Rs.5,000 in excess of opening stock 6 4 2 20% 20 73 Rs.60,000 Rs. 20,000

3. With the following ratios and further information given below prepare a Trading accounting, Profit and Loss a/c and Balance Sheet of Mr.X Particulars Gross profit ratio Net profit ratio Stock turnover Net profit to capital Capital to total liabilities Fixed assets/capital Fixed assets Closing stock Amount 25% 20% 10 1/5 1/2 5/4 Rs.10,00,000 Rs.1,00,000

4. The ratios relating to Cosmos Ltd are given as follows Gross Profit Ratio : 15 % stock velocity 6 months debtors velocity 3 month creditors velocity 3 months Gross profit for the year ending 31/1/2001 mounts Rs.60,000. Closing stock is equal to opening stock. Find out Sales 2

Closing stock Sundry debtors Sundry creditors

5. From the following information make a Balance Sheet with as many details at possible Current ratio 2.5 Liquid ratio 1.5 Fixed assets /proprietary funds 0.75 Working capital Rs.60,000 Reserves and surplus Rs.40,000 Bank overdraft Rs.10,000. There are no long term loans 6. Using the details, Prepare a balance sheet of Kamini Limited Current ratio 2.75 Acid ratio 2.25 Working capital Rs.7,00,000 Reserves and surplus Rs.1,00,000 Total current assets include sock debtors and cash only which are in the ratio of 2:6:3 Total current liabilities included creditors and bills payable in the ratio 3:2 Fixed assets are 50 % of share capital The share capital is Rs.12,00,000. There are no other items of assets or liabilities 7. Following is the information of G Company Gross profit ratio = 30% Net profit ratio = 20% Sales/inventory ratio= 8 Fixed assets/total current assets= 2/2 Fixed assets/total capital=3/2 Total capital /total outside liabilities = 2/4 Inventory= Rs.6,00,000 Fixed Assets= 40,00,000 Fill the following accounts Trading & Profit & Loss account

Balance sheet Liabilities Capital(Balancing Fig) Add: Net Profit Outside liabilities Total

Amount (Rs.) .. . ..

Assets Fixed Assets Current Assets Stock Other current assets Total

Amount (Rs.) .. .. .

8. The following is information related to xyz organization Particular Year 1 Year 2 Stock 40,000 1,00,000 Debt 60,000 60,000 Bills receivable 40,000 20,000 Advances ( recoverable in cash or 8,000 kind) Cash in hand 72,000 60,000 Bills payable 60,000 80,000 To cost of sales .. ------By sales 8,000 Bank overdraft To profit c/d . Netgross Profit 1,50,00 1,00,000 0 Gross Profit 2,80,00 2,00,000 To expenses By gross profit b/d 0 Sales To net profit . 8,00,00 1,50,000 0 ______________ ______________ ____ Calculate for both years Current ratio Liquidity ratio Stock turnover ratio Net Profit Ratio Gross Profit Ratio 9. A companys sales are Rs.36,00,000, compute balance sheet Sales /total assets 3 Sales /fixed assets 5 Sales/current assets 7.5 Sales /inventories 20 Sales /debtors 2

. . .. ____________ ____________ ____

Current ratio 2.5 Debt equity 1 Balance sheet Liabilities Amount Assets Amount Net worth Fixed assets Long term debt Inventories Current liabilities Debtors Liquid assess

10. From the following prepare balance sheet Current ratio 1.75 Liquid ratio 1.25 Stock turnover ratio (cost of sales /closing stock) Gross profit ratio 25 % Debt collection period 11/2 months Reserves and surplus to capital 0.2 Turn over to fixed assets 1.2 Capital gearing ration (long term debt to equity capital) 1.25 Sales for the year Rs.12,00,000