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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Calculate the following ratios on the basis of the following information: (i) Gross Profit Ratio; (ii) Current Ratio; (iii) Acid Test Ratio; and (iv) Inventory 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 |
(i) Gross Profit Ratio = Gross Profit ÷ Revenue from Operations × 100 = 50,000 ÷ 1,00,000 × 100 = 50%
(ii) Current Assets = Inventory + Cash and Cash Equivalents + Trade Receivables = 15,000 + 17,500 + 27,500 = ₹60,000
Current Ratio = 60,000 ÷ 40,000 = 1.5 : 1
(iii) Liquid Assets = Cash and Cash Equivalents + Trade Receivables = 17,500 + 27,500 = ₹45,000
Acid Test Ratio = 45,000 ÷ 40,000 = 1.125 : 1
(iv) Cost of Goods Sold = Revenue from Operations − Gross Profit = 1,00,000 − 50,000 = ₹50,000
Inventory Turnover Ratio = 50,000 ÷ 15,000 = 3.33 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.178 - 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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