Question 103 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

103. (Current Ratio/Acid Test Ratio/Operating Ratio/GP Ratio) Calculate the following ratios, from the details given below :
(i) Current ratio ; (ii) Acid-test ratio ;
(iii) Operating ratio; and (iv) Gross profit ratio.
Details

 ₹ Current assets 70,000 Current liabilities 35,000 Inventory 30,000 Sales (Revenue from Operation) 1,20,000 Operating expenses 40,000 Cost of goods sold 60,000

## The solution of Question 103 Chapter 4 of +2-B: –

 (i) Current Ratio = Current Assets Current Liabilities = = ₹ 70,000 ₹ 35,000 = 2 : 1
 (ii) Acid test Ratio = Quick Assets Current Liabilities = = ₹ 40,000 ₹ 35,000 = 1.14 : 1

 (iii) Operating Ratio = Operating Cost X 100 Net Sales = = ₹ 1,00,000 X 100 ₹ 1,20,000 = 83.33%

 (iv) Gross Profit Ratio = Gross Profit X 100 Net Sales = = ₹ 60,000 X 100 ₹ 1,20,000 = 50%

Working Notes

 Quick Assets = Current Assets – Inventory = ₹ 70,000 – ₹ 30,000 = ₹ 40,000 Operating Cost = Cost of goods sold + Operating Expenses = ₹ 60,000 + ₹ 40,000 = ₹ 1,00,000 Gross Profit = Sales – Cost of goods sold = ₹ 1,20,000 – ₹ 60,000 = ₹ 60,000

Also, Check out the solved question of previous Chapters: –