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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the following Balance Sheet of Akhil Ltd. as at 31st March, 2023, calculate (i) Net Assets Turnover Ratio and (ii) Fixed Assets Turnover Ratio:
I. Equity and Liabilities
| Share Capital | 10,00,000 |
| Reserves and Surplus | 3,00,000 |
| 8% Debentures (Long-term Borrowings) | 5,00,000 |
| Trade Payables | 1,50,000 |
| Other Current Liabilities | 50,000 |
| Total | 20,00,000 |
| II. Assets | |
|---|---|
| Property, Plant and Equipment (Net of Depreciation) | 13,00,000 |
| Inventories | 3,00,000 |
| Trade Receivables | 2,50,000 |
| Cash and Cash Equivalents | 1,50,000 |
| Total | 20,00,000 |
Revenue from Operations for the year was ₹45,00,000.
(i) Net Assets (Capital Employed) Turnover Ratio
Capital Employed = Share Capital + Reserves and Surplus + 8% Debentures
= 10,00,000 + 3,00,000 + 5,00,000 = ₹18,00,000
Net Assets Turnover Ratio = Revenue from Operations ÷ Capital Employed = 45,00,000 ÷ 18,00,000 = 2.5 times
(ii) Fixed Assets Turnover Ratio
Fixed Assets Turnover Ratio = Revenue from Operations ÷ Fixed Assets (Net) = 45,00,000 ÷ 13,00,000 = 3.46 times
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.133 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
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