TEST PAPER
ACCOUNTING RATIOS
Class 12 - Accountancy
Time Allowed: 1 hour and 30 minutes Maximum Marks: 50
1. The current ratio of a company is 2.5 : 1.5. State with reasons which of the following transactions will increase, [4]
decrease or not change the ratio.
i. Discounted a bills receivable of Rs. 10,000 from bank. Bank charged discount of Rs. 200.
ii. A bill receivable Rs. 8,000 discounted with bank was dishonoured.
iii. Cash deposited into bank 7,000.
iv. Paid cash Rs. 5,000 to the creditors.
2. State giving reason, whether the Current Ratio will improve or decline or will have no effect in each one of the [4]
following transactions if Current Ratio is (i) 2.5 : 1, (ii) 1 : 1, (iii) 0.75 : 1.
1. Paid ₹ 50,000 to a Creditor.
2. Sale of goods at a loss of 10%.
3. Sale of a fixed asset for ₹ 1,00,000 (Book Value ₹ 1,20,000).
4. Payment of outstanding salaries.
5. Received ₹ 25,000 from a Debtor of ₹ 30,000 in full settlement of his account.
6. Bills payable discharged on maturity.
7. Bills Receivable drawn on debtor.
8. Purchased goods on credit.
9. Issued debentures to the vendors of machinery.
3. i. From the following information calculate Interest Coverage Ratio: Net profit after interest and tax ₹ [4]
1,20,000; Rate of income tax 40%; 15% debentures ₹ 1,00,000; 12% Mortgage loan ₹ 1,00,000.
ii. A company had Current Assets ₹ 3,00,000 and Current Liabilities ₹ 1,40,000. Afterwards, it purchased goods
worth ₹ 20,000 on credit. Calculate the Current Ratio after the purchase of goods.
4. From the following information calculate: [6]
i. Gross Profit Ratio
ii. Inventory Turnover Ratio
iii. Current Ratio
iv. Liquid Ratio
v. Net Profit Ratio
vi. Working capital Ratio:
Revenue from Operations 25,20,000
Net Profit 3,60,000
Cast of Revenue from Operations 19,20,000
Long-term Debts 9,00,000
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Trade Payables 2,00,000
Average Inventory 8,00,000
Liquid Assets 7,60,000
Fixed Assets 14,40,000
Current Liabilities 6,00,000
Net Profit before Interest and Tax 8,00,000
5. Calculate the following ratio on the basis of following information: [6]
i. Gross Profit Ratio
ii. Current Ratio
iii. Acid Test Ratio
iv. Inventory Turnover Ratio
v. Fixed Assets Turnover Ratio
Gross Profit 50,000
Revenue from Operations 1,00,000
Inventory 15,000
Trade Receivables 27,500
Cash and Cash Equivalents 17,500
Current Liabilities 40,000
Land & Building 50,000
Plant & Machinery 30,000
Furniture 20,000
6. On the basis of the following information calculate: [4]
i. Debt to Equity Ratio; and
ii. Working Capital Turnover Ratio.
Information: ₹ ₹
Revenue from Operations:
(a) Cash Sales 40,00,000 Paid-up Share Capital 17,00,000
(b) Credit Sales 20,00,000 6% Debentures 3,00,000
Cost of Goods Sold 35,00,000 9% Loan from Bank 7,00,000
Other Current Assets 8,00,000 Debentures Redemption Reserve 3,00,000
Current Liabilities 4,00,000 Closing Inventory 1,00,000
7. Compute debt-equity ratio, proprietary ratio, and total assets to debt ratio from the following information: [4]
Equity Share Capital 2,00,000
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12% Preference Share Capital 3,00,000
Reserves and Surplus 2,50,000
The balance of Statement of Profit and Loss 1,50,000
10% Debentures 10,00,000
Loan from IDBI 6,00,000
Current Liabilities 6,80,000
Net Fixed Assets 21,00,000
Long Term Investment 2,00,000
Current Assets 8,80,000
8. Following information is given by a company from its books of accounts as on March 31, 2017: [6]
Particulars ₹
Inventory 1,00,000
Total Current Assets 1,60,000
Shareholders’ funds 4,00,000
13% Debentures 3,00,000
Current liabilities 1,00,000
Net Profit Before Tax 3,51,000
Cost of revenue from operations 5,00,000
Calculate:
i. Current Ratio
ii. Liquid Ratio
iii. Debt Equity Ratio
iv. Interest Coverage Ratio
v. Inventory Turnover Ratio
9. Compute Gross Profit Ratio, Working Capital Turnover Ratio, Debt Equity Ratio and Proprietary Ratio from the [6]
following information:
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
10. The debt-equity ratio of a company is 1 : 2. Which of the following suggestions would increase, decrease or not [6]
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change it?
i. Issue of Equity Shares
ii. Cash Received from Trade Receivables
iii. Sale of Goods on Cash Basis
iv. Repayment of Long term Borrowings
v. Purchased Goods on Credit
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