Question 104 Chapter 4 of +2-B - USHA Publication 12 Class

Question 104 Chapter 4 of +2-B

Miscellaneous (Analytical Questions)

104. (GP Ratio/Operating Profit Ratio/Current Ratio/Liquidity Ratio) From the following information related to the year ending 31s, March, 2018, Calculate the following ratios :
(i) Gross Profit ratio (ii) Operating Profit ratio
(iii) Current ratio (iv) Liquidity ratio

	₹		₹
Opening Inventories	1,52,000	Carriage inward	4,000
Purchases	6,30,500	Sales (Revenue from Operation)	10,01,000
Wages	10,000	Closing Inventories	1,96,000
Administrative Expenses	2,02,000	Non-operating income	12,000
Selling and Distribution Expenses	24,000
Financial Expenses	4,000

BALANCE SHEET
(AS AT 31st MARCH, 2018)
Particulars	₹
I. Equity and Liabilities
Shareholders’ Funds
Share Capital
Equity Share Capital	7,00,000
Reserves and Surplus
Balance of Profit and Loss (Profit for the current year)	1,68,000
Reserves	12,000
Current Liabilities
Short-term Borrowings :
Bank Overdraft	7,000
Trade Payable	30,000
	9,17,000
II. Assets :
Non-Current Assets
Tangible Assets
Fixed Assets	6,01,000
Current Assets
Inventory	1,96,000
Trade Receivable	90,000
Bank	30,000
	9,17,000

The solution of Question 104 Chapter 4 of +2-B: –

(i) Gross Profit Ratio	=	Gross Profit	X	100
		Net Sales

	=	₹ 4,00,000	X	100
		₹ 10,01,000
	=	39.96%

(ii) Operating Ratio	=	Operating Cost	X	100
		Net Sales

	=	₹ 1,60,000	X	100
		₹ 10,01,000
	=	15.98%

(iii) Current Ratio	=	Current Assets
(iii) Current Ratio	=	Current Liabilities

	=	₹ 3,16,000
	=	₹ 37,000
	=	8.54 : 1

(iv) Liquidity Ratio	=	Liquid Assets
(iv) Liquidity Ratio	=	Current Liabilities
	=
	=	₹ 1,20,000
	=	₹ 37,000
	=	3.24 : 1

Gross Profit	=	Sales – Cost of goods sold
	=	₹ 10,01,000 – ₹ 6,01,000
	=	₹ 4,00,000
Cost of goods sold	=	Opening Inventory + Purchases + wages + carriage inward – closing inventory
	=	₹ 1,52,500 + ₹ 6,30,500 + ₹ 10,000 + ₹ 4,000 – ₹ 1,96,000
	=	₹ 6,01,000
Operating Profit	=	Net Profit + Non operating expenses – non-operating incomes
	=	₹ 1,68,000 + ₹ 4,000 – ₹ 12,000
	=	₹ 1,60,000
Liquidity Assets	=	Trade receivable + Bank
	=	₹ 90,000 + ₹ 30,000
	=	₹ 1,20,000

End of Solution

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