Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
From the information given below, calculate any three of the following ratios: (i) Gross Profit Ratio; (ii) Working Capital Turnover Ratio; (iii) Debt to Equity Ratio; and (iv) Proprietary Ratio.
| Revenue from Operations (Net Sales) | 5,00,000 | Current Liabilities | 1,40,000 |
| Cost of Revenue from Operations (Cost of Goods Sold) | 3,00,000 | Paid-up Share Capital | 2,50,000 |
| Current Assets | 2,00,000 | 13% Debentures | 1,00,000 |
(i) Gross Profit Ratio
Gross Profit = Net Sales − Cost of Goods Sold = 5,00,000 − 3,00,000 = ₹2,00,000
Gross Profit Ratio = 2,00,000 ÷ 5,00,000 × 100 = 40%
(ii) Working Capital Turnover Ratio
Working Capital = Current Assets − Current Liabilities = 2,00,000 − 1,40,000 = ₹60,000
Working Capital Turnover Ratio = 5,00,000 ÷ 60,000 = 8.33 times
(iii) Debt to Equity Ratio
Debt-Equity Ratio = 13% Debentures ÷ Paid-up Share Capital = 1,00,000 ÷ 2,50,000 = 0.4 : 1
(iv) Proprietary Ratio
Total Assets = Current Liabilities + Paid-up Share Capital + 13% Debentures = 1,40,000 + 2,50,000 + 1,00,000 = ₹4,90,000
Proprietary Ratio = Shareholders’ Funds ÷ Total Assets = 2,50,000 ÷ 4,90,000 = 0.51 : 1
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.180 - 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.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 3 Chapter 4 Q.180 - Accounting Ratios" instantly.