Calculate Following Ratios: (i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio - ACCOUNTING RATIOS

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From the following Balance Sheet and other information, calculate following ratios:
(i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio

Balance Sheet as at March 31, 2017

Particulars

Note No.

Rs.

I. Equity and Liabilities:

 

 

1. Shareholders’ funds

 

 

a) Share capital

 

10,00,000

b) Reserves and surplus

 

9,00,000

2. Non-current Liabilities

 

 

Long-term borrowings

 

12,00,000

3. Current Liabilities

 

 

Trade payable

 

5,00,000

Total

 

36,00,000

II. Assets

 

 

1. Non-current Assets

 

 

a) Fixed assets

 

 

Tangible assets

 

18,00,000

2. Current Assets

 

 

a) Inventories

 

4,00,000

b) Trade Receivables

 

9,00,000

c) Cash and cash equivalents

 

5,00,000

Total

 

36,00,000

Additional Information: Revenue from Operations Rs. 18,00,000




(i)  Debt-Equity Ratio

Debt-Equity Ratio = `\frac{Debt}{Equity}`

= `\frac{12,00,000}{19,00,000}` = 0.63 : 1


Debt = Long term borrowings = 12,00,000

Equity = Share Capital + Reserve and Surplus

= 10,00,000 + 9,00,000

= 19,00,000

2. Working Capital Turnover Ratio

 Working Capital Turnover Ratio


=   `\frac{18,00,000}{13,00,000}` = 1.39 times

Revenue from Operations = Rs. 18,00,000

Working Capital = Current Asset - Current Liabilities

= 18,00,000 - 5,00,000

= 13,00,000

3. Trade Receivables Turnover Ratio

 Trade Receivables Turnover Ratio 


= `\frac{18,00,000}{9,00,000}` = 2 times

Chapter-5 Accounting Ratios-II



Location: India

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