Question 132 Chapter 4 of +2-B
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Video Tag:Return on Capital Employed (or Return on Investment) Ratio
132. From the following Balance Sheet of Global Ltd., you are required to calculate Return on Investment for the year 2018-19:
| BALANCE SHEET OF GLOBAL LTD. as at 31st March, 2019 | ||
| Particulars | Note No. | Rs. |
| I. Equity and Liabilities | ||
| 1. Shareholders’ Funds | ||
| (a) Share Capital | 5,00,000 | |
| (b) Reserves and Surplus | 4,20,0000 | |
| 2. Non-Current Liabilities | ||
| 15% Long-term Borrowings | 16,00,000 | |
| 2. Current Liabilities | 8,00,000 | |
| Total | 33,20,000 | |
| II. Assets | ||
| 1. Non-Current Assets | ||
| a. Fixed Assets (Tangible Assets) | 16,00,000 | |
| b. Non-Current Investments: | ||
| i. 10% Investments | 2,00,000 | |
| ii. 10% Non-trade Investments | 1,20,000 | |
| 2. Current Assets | 14,00,000 | |
| Total | 33,20,000 | |
Additional Information: Net Profit before Tax for the year 2018-19 is Rs 9,72,000.
The solution of Question 132 Chapter 4 of +2-B: –
| Interest on borrowings | = | Rs. 2,40,000 |
| Net Profit before Tax | = | Rs. 9,72,000 |
| Net Profit before Interest and Tax | = | Rs. 9,72,000 + Rs. 2,40,000 |
| = | Rs. 12,12,000 |
Net Profit before Interest and Tax excluding interest on Non −trade investments
| = | Rs. 12,12,000 – Rs. 12,000 | |
| = | Rs. 12,00,000 | |
| Capital Employed | = | Shareholder’s Funds + Non-Current Liabilities – Non-Trade Investment |
| = | Rs. 5,00,000 + Rs. 4,20,000 + Rs. 16,00,000 – Rs 1,20,000 | |
| = | Rs. 24,00,000 |
| Net Profit Ratio | = | Profit before Interest and Tax | X | 100 |
| Capital Employed |
| Net Profit Ratio | = | Rs. 12,00,000 | X | 100 |
| Rs. 24,00,000 | ||||
| = | 50% |
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)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
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