Ratio analysis can help know about the potential areas which can be improved with the effort in the desired direction.
The working capital of IAN Ltd. is ₹ 2,00,000 and its current assets are ₹ 6,00,000. What is its current ratio?
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Working capital is the excess of current assets over current liabilities.
If current assets and current liabilities both reduce by the same amount, the current ratio will
Purchase of goods ₹ 40,000 for cash will increase the operating ratio.
A ratio reflects quantitative as well as qualitative aspects of results.
Current ratio of Vidur Pvt. Ltd. is 3:2. Accountant wants to maintain it at 2:1. Following options are available
(i) He can repay bills payable.
(ii) He can take short-term loan.
(iii) He can purchase goods on credit.
Choose the correct option.
What will be the effect on current ratio if a bills payable is discharged on maturity?
Ratios are comparable even if different accounting policies and procedures are followed by different firms.
Which of the following ratios measure the long-term solvency of an organisation?
Which of the following is/are not the component(s) of quick asssets?
The Current Assets of APE Ltd. are T 6,00,000 ; Current Liabilities are ₹ 2,00,000; Inventories are ₹ 1,50,000; Prepaid Expenses are ₹ 50,000 and Cash and Cash Equivalents are ₹ 1,00,000. What is its quick ratio?
Generally, a lower current ratio is considered better.
Purchase of machinery for cash will _____ the quick ratio.
What is the debt to equity ratio when the following information is available Total Assets ₹ 35,00,000; Total Debts ₹ 25,00,000; Current Liabilities ₹ 8,00,000.
ARYA Ltd has a term Loan of ₹ 10,00,000. Interest on Loan for the year is ₹ 1,25,000 and its PBIT is ₹ 5,00,000. Its interest coverage ratio is
If P Ltd obtains a Bank Loan of ₹ 30,00,000 payable after 5 years, then its proprietary ratio will
Purchase returns amounting to ₹ 20,000 will deteriorate the inventory turnover ratio
Debt-equity ratio expresses the relationship between short-term debt and equity share capital of an enterprise.
What is the inventory turnover ratio, when the following is given?
COGS = ₹ 1,50,000;
Closing Inventory = ₹ 60,000;
Excess of Closing Inventory over Opening Inventory ₹ 20,000.
A rise in operating ratio will indicate a rise in efficiency.
Debt-equity ratio of a company is 1:2.
Purchase of a fixed asset for ₹ 5,00,000 on long-term deferred payment basis will
If the debtor’s turnover ratio of MON Ltd. is 6 times, creditors turnover ratio is 4 times then what is its average collection period in months?
Which ratio indicates the speed with which amount is being paid to the creditors?
XYZ Ltd. extends credit terms of 45 days to its customers. Its credit collection would be considered poor if its average collection period was.
Which of the following groups of ratios primarily measure risk?
What will be the effect of purchase of goods for cash ₹ 3,000 on gross profit ratio?
What will be the current ratio of a company whose net working capital is zero?
Directions: There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the appropriate option from the options given below
Assertion (A): The debt to equity ratio will increase at the time of issue of equity shares for cash.
Reason (R): Issue of equity shares will increase the shareholders’ funds but the long-term debts will remain the same.
Directions: There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the appropriate option from the options given below
Assertion (A): Inventories and prepaid expenses are not considered as quick assets.
Reason (R): Inventories take some time before it is converted into cash while prepaid expenses can be converted into cash.
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