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(a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.?
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(a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4...
Return on Investment:
To calculate the Return on Investment (ROI), we need to divide the net profit after interest and tax by the total investment.
Given:
Net Profit after interest and tax = Rs 1,00,000
Current Assets = Rs 4,00,000
Current Liabilities = Rs 2,00,000
Tax Rate = 20%
Fixed Assets = Rs 6,00,000
Long term Debt = 10% of Rs 4,00,000 = Rs 40,000
Calculation:
1. Total Investment:
Total Investment = Fixed Assets + Current Assets - Current Liabilities
Total Investment = Rs 6,00,000 + Rs 4,00,000 - Rs 2,00,000
Total Investment = Rs 8,00,000
2. Net Profit after Tax:
Net Profit after Tax = Net Profit after interest and tax - (Tax Rate * Net Profit after interest and tax)
Net Profit after Tax = Rs 1,00,000 - (0.20 * Rs 1,00,000)
Net Profit after Tax = Rs 1,00,000 - Rs 20,000
Net Profit after Tax = Rs 80,000
3. Return on Investment:
Return on Investment = (Net Profit after Tax / Total Investment) * 100
Return on Investment = (Rs 80,000 / Rs 8,00,000) * 100
Return on Investment = 10%
Therefore, the Return on Investment is 10%.
Working Capital Turnover Ratio:
The Working Capital Turnover Ratio measures the efficiency of a company in utilizing its working capital to generate sales revenue. It is calculated by dividing the net sales by the working capital.
Given:
Gross Profit = Rs 5,00,000
Rate of Gross Profit on cost = 25%
Shareholders funds = Rs 12,00,000
Current Liabilities = Rs 3,00,000
Current Assets = Rs 10,00,000
Calculation:
1. Cost of Goods Sold (COGS):
Gross Profit on cost = Gross Profit / COGS
25% = Rs 5,00,000 / COGS
COGS = Rs 5,00,000 / 0.25
COGS = Rs 20,00,000
2. Working Capital:
Working Capital = Current Assets - Current Liabilities
Working Capital = Rs 10,00,000 - Rs 3,00,000
Working Capital = Rs 7,00,000
3. Net Sales:
Net Sales = COGS + Gross Profit
Net Sales = Rs 20,00,000 + Rs 5,00,000
Net Sales = Rs 25,00,000
4. Working Capital Turnover Ratio:
Working Capital Turnover Ratio = Net Sales / Working Capital
Working Capital Turnover Ratio = Rs 25,00,000 / Rs 7,00,000
Working Capital Turnover Ratio = 3.57 times (approx.)
Therefore, the Working Capital Turnover Ratio is approximately 3.57 times.
To calculate the Return on Investment (ROI), we need to divide the net profit after interest and tax by the total investment.
Given:
Net Profit after interest and tax = Rs 1,00,000
Current Assets = Rs 4,00,000
Current Liabilities = Rs 2,00,000
Tax Rate = 20%
Fixed Assets = Rs 6,00,000
Long term Debt = 10% of Rs 4,00,000 = Rs 40,000
Calculation:
1. Total Investment:
Total Investment = Fixed Assets + Current Assets - Current Liabilities
Total Investment = Rs 6,00,000 + Rs 4,00,000 - Rs 2,00,000
Total Investment = Rs 8,00,000
2. Net Profit after Tax:
Net Profit after Tax = Net Profit after interest and tax - (Tax Rate * Net Profit after interest and tax)
Net Profit after Tax = Rs 1,00,000 - (0.20 * Rs 1,00,000)
Net Profit after Tax = Rs 1,00,000 - Rs 20,000
Net Profit after Tax = Rs 80,000
3. Return on Investment:
Return on Investment = (Net Profit after Tax / Total Investment) * 100
Return on Investment = (Rs 80,000 / Rs 8,00,000) * 100
Return on Investment = 10%
Therefore, the Return on Investment is 10%.
Working Capital Turnover Ratio:
The Working Capital Turnover Ratio measures the efficiency of a company in utilizing its working capital to generate sales revenue. It is calculated by dividing the net sales by the working capital.
Given:
Gross Profit = Rs 5,00,000
Rate of Gross Profit on cost = 25%
Shareholders funds = Rs 12,00,000
Current Liabilities = Rs 3,00,000
Current Assets = Rs 10,00,000
Calculation:
1. Cost of Goods Sold (COGS):
Gross Profit on cost = Gross Profit / COGS
25% = Rs 5,00,000 / COGS
COGS = Rs 5,00,000 / 0.25
COGS = Rs 20,00,000
2. Working Capital:
Working Capital = Current Assets - Current Liabilities
Working Capital = Rs 10,00,000 - Rs 3,00,000
Working Capital = Rs 7,00,000
3. Net Sales:
Net Sales = COGS + Gross Profit
Net Sales = Rs 20,00,000 + Rs 5,00,000
Net Sales = Rs 25,00,000
4. Working Capital Turnover Ratio:
Working Capital Turnover Ratio = Net Sales / Working Capital
Working Capital Turnover Ratio = Rs 25,00,000 / Rs 7,00,000
Working Capital Turnover Ratio = 3.57 times (approx.)
Therefore, the Working Capital Turnover Ratio is approximately 3.57 times.
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(a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.?
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(a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.?.
(a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.?.
Solutions for (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? in English & in Hindi are available as part of our courses for Commerce.
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(a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.?, a detailed solution for (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? has been provided alongside types of (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? theory, EduRev gives you an
ample number of questions to practice (a) Net Profit after interest and tax Rs 1,00,000; Current Assets Rs 4,00,000; Current Liabilities Rs 2,00,000; Tax Rate 20%; Fixed Assets Rs 6,00,000; 10% Long term Debt Rs 4,00,000. Calculate Return on Investment. (b) Rate of Gross Profit on cost of a company is 25%. Its Gross Profit is Rs 5,00,000 Its Shareholders funds are Rs 12,00,000; Current Liabilities are Rs 3,00,000 and Current Assets are Rs 10,00,000. Calculate its Working Capital Turnover Ratio.? tests, examples and also practice Commerce tests.
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