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Question 131 Chapter 4 of +2-B – T.S. Grewal 12 Class

Question 131 Chapter 4 of +2-B
Question No. 131- Chapter No.4 - T.S. Grewal +2 Book Part B

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Question 131 Chapter 4 of +2-B

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Return on Capital Employed (or Return on Investment) Ratio

131. y Ltd.’s profit after interest and tax was Rs. 1,00,000. Its Current Assets
were Rs. 4,00,000; Current Liabilities Rs. 2,00,000; Fixed Assets Rs.
6,00,000 and 10% Long-term Debt Rs. 4,00,000. The rate of tax was 20%.
Calculate ‘Return on Investment’ of Y Ltd.

 

The solution of Question 131 Chapter 4 of +2-B: –

 

Profit before tax=100
Tax=20
Profit after tax=100 – 20
 =80
Profit after tax=Rs. 1,00,000
Profit before tax=100XRs.1,00,000
80
 =Rs. 1,25,000
Interest on long-term borrowings=Rs. 4,00, 000 ×10%
 =Rs. 40,000
Capital Employed=Fixed Assets+ Current Assets – Current Liabilities
 =Rs. 6,00,000 + Rs. 4,00,000 – Rs. 2,00,000
 =Rs. 8,00,000

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Net Profit Ratio=Profit before Interest and TaxX100
Capital Employed
Net Profit Ratio=Rs. 1,65,000X100
Rs. 8,00,000
 =20.63%  

 

 

Balance Sheet: Meaning, Format & Examples

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

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

Question 1 Chapter 1 of +2-B
T.S. Grewal’s Analysis of Financial Statements

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