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

 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 Operations	Rs. 25,20,000
Net Profit	Rs. 3,60,000
Cast of Revenue from Operations	Rs. 19,20,000
Long-term Debts	Rs. 9,00,000
Trade Payable	Rs. 2,00,000
Average Inventory	Rs. 8,00,000
Current Assets	Rs. 7,60,000
Fixed Assets	Rs. 14,40,000
Current Liabilities	Rs. 6,00,000
Net Profit before Interest and Tax	Rs. 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

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