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Calculate Following Ratios From The Following Information: (i) Current Ratio (ii) Acid Test Ratio (iii) Operating Ratio (iv) Gross Profit Ratio
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Calculate following ratios from the following information:
(i) Current ratio (ii) Acid test ratio (iii) Operating Ratio (iv) Gross Profit Ratio
Current Assets
Rs. 35,000
Current Liabilities
Rs. 17,500
Inventory
Rs. 15,000
Operating Expenses
Rs. 20,000
Revenue from Operations
Rs. 60,000
Cost of Goods Sold
Rs. 30,000
(i) Current ratio = `\frac{Current Asset}{Current Liabilities}` Current ratio = `\frac{35,000}{17,500}` = 2:1 (ii) Acid test ratio = `\frac{Liquid Asset}{Current Liabilities}` Liquid Asset = Current Asset - Inventory = 35,000 - 15,000 = 20,000Acid test ratio = `\frac{20,000}{17,500}` = `\frac{1.143}{1}` = 1.143 : 1 (iii) Operating Ratio
= `\frac{30,000+20,000}{60,000}\times100`=` \frac{50,000}{60,000}\times100`= 83.33 % (iv) Gross Profit Ratio
Gross Profit = Net Revenue from Operations - Cost of Good Sold = 60,000 - 30,000 = 30,000Gross Profit Ratio = `\frac{30,000}{60,000}\times100` = 50 %
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