Q1. The current ratio of the company is 2.5:1. State giving reasons whether declaration of dividend will improve, reduce or not change the ratio.
Q2. If operating ratio of a company is 24% what is the operating profit ratio of the company?
Q3. Find debt equity and proprietary ratio and also comment upon the financial position of the business
Q4. What will be the impact of the following transactions on debt equity ratio-.8:1
Sale of fixed assets at a profit
Declaration of dividend
Payment of dividend for dividend already declared
Q5. a) X Ltd. has a current ratio of 3.5:1 and quick ratio of 2:1. If excess of current assets over quick assets represented by Inventory is 24,000, calculate current assets and current liabilities.
b) From the following information, calculate Inventory Turnover Ratio.
Revenue from Operations: 4,00,000, Average Inventory : 55,000, The rate of Gross Loss on Revenue from Operations was 10%.
Q6. Net profit after Interest taxes is Rs2,80,000,15% long term debt Rs8,00,000. 10% preference Share capital Rs4,80,000, Tax rate 30% Calculate return on capital employed and interest coverage ratio.
Q7. A company’s Stock Turnover is 5 times. Stock at the end is Rs. 20,000 more than that at the beginning. Revenue from operations are Rs. 8,00,000. Rate of Gross Profit on cost 1/4; Current Liabilities Rs. 2,40,000. Acid Test Ratio 0.75. Calculate Current Ratio
Q8. From the following information, calculate the following ratios:
(i) Acid Test Ratio (ii) Debt Equity Ratio (iii) Working Capital Turnover Ratio (iv) operating ratio
Net RFO 3,00,000; Gross Profit 1,00,000; Total Current Assets 2,00,000; Closing Inventory 20,000; Prepaid Insurance 4,000; Total Current Liabilities 1,20,000; Share Capital 3,50,000; Reserve & Surplus 40,000; Preliminary Expenses 7,000; Fixed Assets 4,30,000, selling and distribution expenses Rs.4,000 & office and administrative expenses Rs.6,000.
Q9. Current ratio- 2,Quick ratio- 1.5,Working capital- rs.3,00,000 Closing stock is 3times more than the opening stock, Average age of inventory 73 days, Gross profit is 10% of revenue from operations, Cash revenue from operations is ¼ of credit revenue from operations, Average debtors-Rs.50000.Find Cl. stock, cost of revenue from operations and debtors velocity.
|1. What is ratio analysis in financial statement analysis?|
|2. How is liquidity ratio calculated and what does it indicate?|
|3. What are profitability ratios and how are they useful in financial statement analysis?|
|4. How can solvency ratios help in assessing a company's financial stability?|
|5. What are the limitations of ratio analysis in financial statement analysis?|