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VDO+ Tag:Question 69 Chapter 14 of Class 12 Part – 2 – 2024
IV. Profitability Ratios
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Video Tag:69. (GP Ratio/NP Ratio/Stock T/O Ratio/Reasons for Variation in two years) The following is the statement of profit and loss of a Trader for the year ended 31st March 2019 with the corresponding figures for the previous year.
| Particulars | 2018 | 2019 | ||
| ₹ | ₹ | |||
| Revenue from Operations (Sales) | 6,00,000 | 7,48,000 | ||
| Less : Purchase | 4,80,000 | 5,84,000 | ||
| Changes in Inventories | -8,000 | 12,000 | ||
| (Opening Inventory — Closing Inventory) | ||||
| 2018 (₹ 1,25,000 —₹ 1,33,000) | ||||
| 2019 (₹ 1,33,000 — ₹ 1,21,000) | ||||
| Administrative Expenses | 38,000 | 38,000 | ||
| Selling Expenses | 22,500 | 29,290 | ||
| Other Expenses | 37,500 | 46,710 | ||
| Interest | – – – – | 5,70,000 | 4,000 | 7,14,000 |
| Net Profit | 30,000 | 34,000 |
Calculate the following ratios for both the years and indicate the possible reasons for variation of the ratios of the two years (1) Gross profit ratio (2) Net profit ratio (3) Stock turnover ratio.
The solution of Question 69 Chapter 14 of Class 12 Part – 2 – 2024: –
| (1) Gross Profit Ratio | = | ₹ 1,28,000 | X | ₹ 2,00,000 |
| ₹ 6,00,000 | ||||
| = | 21.33% |
| (2) Net Profit Ratio | = | ₹ 30,000 | X | 8,00,000 |
| ₹ 6,00,000 | ||||
| = | 5% | |||
| Net Profit | = | Gross Profit – Indirect Expenses | ||
| = | ₹ 2,00,000 – ₹ 40,000 | |||
| = | ₹ 1,60,000 |
| (3) Stock Turnover Ratio | = | Cost of goods sold |
| Average Inventory | ||
| Cost of goods sold | = | Opening Inventory – Closing Inventory + Purchase |
| = | (₹ 8,000) + ₹ 4,80,000 | |
| = | ₹ 4,72,000 | |
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 | ||
| = | ₹ 1,25,000 + ₹ 1,33,000 | |
| 2 | ||
| = | ₹ 1,29,000 | |
| Stock Turnover Ratio | = | ₹ 4,72,000 |
| ₹ 1,29,000 | ||
| = | 3.66 Times |
| (1) Gross Profit Ratio | = | ₹ 1,52,000 | X | ₹ 2,00,000 |
| ₹ 7,48,000 | ||||
| = | 20.32% |
| (2) Net Profit Ratio | = | ₹ 34,000 | X | 8,00,000 |
| ₹ 7,48,000 | ||||
| = | 4.54% |
| (3) Stock Turnover Ratio | = | Cost of goods sold |
| Average Inventory | ||
| Cost of goods sold | = | Opening Inventory – Closing Inventory + Purchase |
| = | ₹ 12,000 + ₹ 5,84,000 | |
| = | ₹ 5,96,000 | |
| Average Inventory | = | Opening Inventory + Closing Inventory |
| 2 | ||
| = | ₹ 1,33,000 + ₹ 1,21,000 | |
| 2 | ||
| = | ₹ 1,27,000 | |
| Stock Turnover Ratio | = | ₹ 5,96,000 |
| ₹ 1,27,000 | ||
| = | 4.69 Times |
Reason: Gross Profit Ratio and Net Profit Ratio both are decreased in 2019 from the previous year. This happened due to an increase in the cost of goods sold in 2019 like the percentage of sales and expenses are also increase.
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Chapter-Wise Solution of Usha Publication Accountancy – Part 2 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 2 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 8 – Company Accounts (Share Capital)
Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
Chapter No. 12 – Financial Statement Analysis
Chapter No. 13 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 14 – Ratio Analysis
Chapter No. 15 – Cash Flow Statement
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 2 Class 12 by Unimax Publication
- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Issue of Debentures
- Chapter No. 3 – Redemption of Debentures
- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
- Chapter No. 6 – Tools/Methods of Financial Analysis
- Chapter No. 7 – Ratio Analysis
- Chapter No. 8 – Cash Flow Statement
Check out Part 1 of both books.
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1. Accountancy – Part 1 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 1 Class 12 by Unimax Publication