From the following Information Calculate: (i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio (v) Net Profit Ratio (vi) Working capital Ratio:-ACCOUNTING RATIOS

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 From the following information calculate:

(i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio (v) Net Profit Ratio (vi) Working capital Ratio:

Revenue from OperationsRs. 25,20,000
Net ProfitRs. 3,60,000
Cast of Revenue from OperationsRs. 19,20,000
Long-term DebtsRs. 9,00,000
Trade PayableRs. 2,00,000
Average InventoryRs. 8,00,000
Current AssetsRs. 7,60,000
Fixed AssetsRs. 14,40,000
Current LiabilitiesRs. 6,00,000
Net Profit before Interest and TaxRs. 8,00,000



(i) Gross Profit Ratio =  `\frac{Gross Profit}{Revenu from Operations }  \times 100`
Gross Profit = Revenue from Operations - Cost of Sales
= 25,20,000 - 19,20,000
=6,00,000
Gross Profit Ratio =  `\frac{6,00,000}{25,20,000}  \times 100` = 23.81 

(ii) Inventory Turn over Ratio


=   `\frac{19,20,000}{8,00,000 } `
= 2.4 times

(iii) Current asset = `\frac{Current Asset}{Current Liabilities } `
Current Asset = Liquid asset + Inventory
= 7,60,000 + 8,00,000
= 15,60,000
Current Ratio = `\frac{15,60,000}{6,00,000 } `
= `\frac{2.6 }{1 }` =2.6:1

(iv) Liquid Ratio = `\frac{Liquid Asset}{Current Asset } `

= `\frac{7,60,000}{6,00,000 } `
= `\frac{1.27}{1 } `
= 1.27:1


(v) Net Profit Ratio =  `\frac{Net Profit}{Net Revenue from Operations}  \times 100`
=  `\frac{3,60,000}{25,20,000}  \times 100`
= 14.28 %

(vi) Working capital Ratio 

Working Capital = Current Assets - Current Liabilities
= 15,60,000 - 6,00,000
= 9,60,000
Working Capital Ratio = `\frac{25,20,000}{9,60,000} ` = 2.625 times

Chapter-5 Accounting Ratios-II



Location: India

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