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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate Revenue from Operations of BN Ltd. from the following information (CBSE 2019): Current Assets ₹8,00,000; Quick Ratio is 1.5:1; Current Ratio is 2:1; Inventory Turnover Ratio is 6 times; Goods were sold at a profit of 25% on cost.
Current Ratio = Current Assets ÷ Current Liabilities
2 = 8,00,000 ÷ Current Liabilities
Current Liabilities = ₹4,00,000
Quick Assets = Quick Ratio × Current Liabilities = 1.5 × 4,00,000 = ₹6,00,000
Inventory = Current Assets − Quick Assets = 8,00,000 − 6,00,000 = ₹2,00,000
Cost of Revenue from Operations = Inventory × Inventory Turnover Ratio = 2,00,000 × 6 = ₹12,00,000
Since Profit is 25% on Cost, Cost:Profit:Revenue = 100:25:125.
Revenue from Operations = 12,00,000 × 125/100 = ₹15,00,000
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.173 - Accounting Ratios", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Accounting Ratios.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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