This will clear students doubts about any question and improve application skills while preparing for board exams. Shine Limited has a current ratio 4.5:1 and quick ratio 3:1; if the stock is 36,000, calculate current liabilities and current assets. Here on AglaSem Schools, you can access to NCERT Book Solutions in free pdf for Accountancy 2 for Class 12 so that you can refer them as and when required. Calculate the amount of Current Assets and Current Liabilities. Calculate Current Ratio. Students can download study material and notes for academic session 2020-2021 based on part 2 … The following is the summarised Profit and Loss account and the Balance Sheet of Nigam Limited for the year ended March 31, 2007, Calculate From the following information, determine Opening and Closing inventories: Inventory Turnover Ratio 5 Times, Total sales ₹ 2,00,000, Gross Profit Ratio 25%. It means if quick assets are just equal to the current liabilities they will be considered favourable with the view point of company’s credibility. NCERT Solution For Class 12 Accountancy Chapter 5 – Accounting Ratios furnishes us with an all-inclusive data to all the concepts. In this way they are interested in knowing Earnings per Share, Return on Investment and Return on Equity. Liquid/Acid Test/Quick Ratio:This ratio establishes relationship between Quick assets and Current liabilities. Calculate (i) Gross Profit Ratio (ii) Current Ratio (iii) Acid Test Ratio Solution : Current Ratio = Current Assets / Current Liabilities. (ii) Students mostly get confused in operating ratio and operating profit ratio, so be careful while doing these ratios. Accounting ratios are widely used for such comparisons. (c) liquidity, activity and debt Comment. Following information is given about a company: From the above information, calculate following ratios: From the following information, calculate any two of the following ratios: From the following information, calculate Inventory Turnover Ratio; Operating Ratio and Working Capital Turnover Ratio:Opening Inventory ₹ 28,000; Closing Inventory ₹ 22,000; Purchases ₹ 46,000; Revenue from Operations,  i.e., Net Sales ₹ 80,000; Return ₹10,000; Carriage Inwards ₹ 4,000; Office Expenses ₹ 4,000; Selling and Distribution Expenses ₹ 2,000; Working Capital ₹ 40,000. Stock turnover ratio/inventory turnover ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory. Capital Employed ₹ 12,00,000; Net Fixed Assets 8,00,000; Cost of Goods Sold or Cost of Revenue from Operations ₹ 40,00,000; Gross Profit is 20% on Cost. Question 9. (a) Inventory Turnover (b) Debtor Turnover The standard for this ratio is 2 : 1. However, it must be interpreted carefully because window-dressing is possible by manipulating the components of current assets and current liabilities, e.g., it can be manipulated by making payment to creditors. Question 16. Calculate Inventory Turnover Ratio in each of the following alternative cases:Case 1: Cash Sales 25% of Credit Sales; Credit Sales ₹3,00,000; Gross Profit 20% on Revenue from Operations, i.e., Net Sales; Closing Inventory ₹1,60,000; Opening Inventory ₹40,000.Case 2: Cash Sales 20% of Total Sales; Credit Sales ₹4,50,000; Gross Profit 25% on Cost; Opening Inventory ₹37,500; Closing Inventory ₹1,12,500. Gross Profit Ratio: Gross Profit Ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. In this way they are interested in knowing Earnings per Share, Return on Investment and Return on Equity. Calculate Total Assets to Debt Ratio. (c) gross profit margin and operating ratio Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios Meaning of Accounting Ratio Accounting ratios also referred to as financial ratios, are applied to compute the performance and profitability of a firm grounded on its financial statements. (c) Payables Turnover (d) Working Capital Turnover Question 2. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio. All solutions have been prepared by Class 12 Accountancy teachers at Studiestoday.com. Answer (b) Current ratio and liquid ratio, (vi) The……………is a measure of liquidity which excludes………………….., generally the least liquid asset. Work out Current Ratio. Working Capital ₹ 1,80,000; Total Debts ₹ 3,90,000; Long-Term Debts ₹ 3,00,000.Calculate Current Ratio. Solvency of a concern can be measured in two ways first to check the security of Debt and second is to check the security of return on Debt. From the following information, calculate Gross Profit Ratio: Calculate Gross Profit Ratio from the following data: Average Inventory ₹3,20,000; Inventory Turnover Ratio 8 Times; Average Trade Receivables ₹4,00,000; Trade Receivables Turnover Ratio 6 Times; Cash Sales 25% of Net Sales. Question 1. Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Net Profit before Interest and Tax ₹2,50,000; Capital Employed ₹10,00,000. Answer Accounting ratios are classified in two ways Categories as follows Management is always interested in future growth of the organisation. (a) liquidity (b) activity Following formula is used to calculate gross profit ratios. Definition and formulae of all type of ratio finding techniques are given in chapter 5 of class 12 accounts part 2. Chapter 5 Cash Flow Statement. Current Assets ₹ 3,00,000; Current Liabilities ₹ 1,00,000. Shareholders' Funds  ₹ 1,60,000; Total Debts ₹ 3,60,000; Current Liabilities ₹ 40,000.Calculate Total Assets to Debt Ratio. Importance of Current Ratio Current Ratio Provides a measure of degree to which current assets cover current liabilities. Calculate Current Ratio if Stock is ? (i) Quick Ratio From the above formula, it is clear that this ratio reveals the average length of time for which the inventory is held by the firm. TEST YOUR UNDERSTANDING I • State which of the following statements are True or False. Question 19. From the following calculate: (i) Current Ratio; and (ii) Quick Ratio: Calculate Debt to Equity Ratio: Equity Share Capital ₹ 5,00,000; General Reserve ₹ 90,000; Accumulated Profits ₹ 50,000; 10% Debentures ₹ 1,30,000; Current Liabilities ₹ 1,00,000. A company earns Gross Profit of 25% on cost. And for calculating Security of Return on Debt we calculate Interest Coverage Ratio. (b) Balance Sheet Ratios: like Current Ratio, Debt Equity Ratio, etc. (ii) Functional Classification This classification of ratios is based on the functional need and the purpose for calculating ratio. XYZ Limited's Inventory is ₹3,00,000. 9,00,000. Current Ratio 4; Liquid Ratio 2.5; Inventory  ₹  6,00,000. Answer Nature of business make inventory turnover ratio more important in case of a grocery store as compare to an insurance company. Cash Sales ₹ 2,20,000; Credit Sales ₹ 3,00,000; Sales Return ₹ 20,000; Gross Profit ₹ 1,00,000; Operating Expenses ₹ 25,000; Non-operating incomes ₹ 30,000; Non-operating Expenses ₹ 5,000. Chapter 5 of Class 12 Accountancy extensively focuses on explaining the meaning of accounting Ratios, objective and advantages of ratio analysis, limitations of ratio analysis. Stock Turnover Ratio = 6 times Calculate Working  Capital Turnover Ratio. Calculate stock Turnover Ratio, (i) The………..is useful in evaluating credit and collection policies. 5,00,000. A firm had Current Assets of ₹5,00,000. NCERT Solutions for Class 12 Accountancy Part 2 Chapter 5. The two basic components of the net profit ratio are the net profit and sales. When ratios are calculated on […] Calculate Inventory Turnover Ratio. Answer True, (c) Long term creditors are concerned about the ability of a firm to discharge its obligations to pay interest and repay the principal amount of term. Chapter 4 Accounting Ratios. Compute Gross Profit Ratio, Working Capitat Turnover Ratio, Dept Equity Ratio and Proprietory Ratio from the fottowing information. Sometimes quick ratio is calculated on the basis of quick liability instead of current liabilities. (b) liquidity, activity and common stock which can be considered as operating incomes such as dividend, bank interest, rent etc. The following is the summerised transactions and Profit and Loss Account for the year ending March 31, 2007 and the Balance Sheet as on that date. NCERT Solutions Class 12 Accountancy 2 Chapter 5 Accounting Ratios. Calculate Operating Ratio from the following information:Operating Cost ₹ 6,80,000; Gross Profit 25%; Operating Expenses ₹ 80,000. Gross profit would be the difference between net sales and cost of goods sold. Calculate the value of current liabilities, liquid assets and stock. It signifies the credit period enjoyed by the firm in paying creditors. Calculate Total Assets to Debt Ratio. Some of the most Important and popular profitability ratios are as under Check the below NCERT MCQ Questions for Class 12 Accountancy Chapter 10 Accounting Ratios with Answers Pdf free download. Interest Coverage Ratio: This ratio deals only with servicing of return on loan as interest. Case 2: Revenue from Operations (Net Sales) ₹30,00,000; Cash Revenue from Operations, i.e., Cash Sales ₹6,00,000; Opening Trade Receivables ₹2,00,000; Closing Trade Receivables ₹6,00,000. Inventory in the beginning of the year ₹ 60,000. For calculating the security of debt we calculate Debt-Equity Ratio, Proprietory Ratio, Fixed Assets – Proprietory Fund Ratio, etc. Interest Coverage Ratio :This ratio deals only with servicing of return on loan as interest. Proprietory/Equity Ratio indicates the long-term or future solvency position of the business. Accounting Ratios – CBSE Notes for Class 12 Accountancy Topic 1: Introduction 1. The ratio is calculated by dividing the cost of goods sold by the amount of average stock at cost. Click below to access free TS Grewal solutions. The standard for this ratio is 1:1. (ii) Purchased machinery of ₹ 2,00,000 by cheque. (b) increase in the value of Closing Inventory by ₹ 40,000. How would you study the solvency position of the firm? (c) current ratio, inventory Question 2. A high Interest Coverage Ratio implies that the company can easily meet all its interest obligations out of its profit. Calculate Opening Inventory and Closing Inventory if Inventory at the end is 2.5 times more than that in the beginning. If current assets are quite capable to pay the current liability the liquidity of the concerned firm will be considered good. ‘ Answer Yes it is true that the liquidity of a business firm is measured by its ability to pay its long term obligations as they become due. Trade Payables ₹ 50,000, Working Capital ₹ 9,00,000, Current Liabilities ₹ 3,00,000. NCERT Solutions for Class 12th Maths (e) Bills Payable discharged. Calculate Stock Turnover Ratio if Opening Stock is Rs. Answer (d) Quick, (iv) ABC Co extends credit terms of 45 days to its customer, its credit collection would be considered poor if its average collection period was You are able to collect the following information about a company for two years Balance Sheet had the following amounts as at 31st March, 2019: Calculate ratios indicating the Long-term and the Short-term financial position of the company. RD Sharma class 12 Solutions Compute Stock Turnover Ratio from the following information, Question 10. 20,000. In this regard management design various policy measures and draft future plans. If Trade Receivables Turnover Ratio is 8 times, calculate Trade Receivables in the Beginning and at the end of the year. Definition and formulae of all type of ratio finding techniques are given in chapter 5 of class 12 accounts part 2. Download NCERT Solutions for Class 12 Accountancy Part II Chapter 5 Accounting Ratios in pdf. Quick assets are those assets which can get converted into cash easily in case of emergency. (iv) Credit Purchase ₹1,60,000. It paid Current Liabilities of ₹1,00,000 and the Current Ratio became 2:1. Analysis of current position of liquid funds determines* the ability of the business to pay the amount due as per commitment to stakeholders. Accounting Ratios Class 12 DK Goel Solutions: An Outline of Chapter 5. If Inventory Turnover Ratio is 8 times, calculate inventories at the end of the year. Current assets of a company are Rs. According to Kennedy and McMullan, the relationship of one term to another expressed in simple mathematical form is … (a) Customers (b) Stockholders TS Grewal textbook solutions can be a core help for self-study and acts as a perfect self-help guidance for students. ₹ 3,00,000 is the Cost of Revenue from Operations (Cost of Goods Sold). If you have any query regarding TS Grewal Accountancy Class 12 Solutions Chapter 1 Accounting for Partnership Firms – Fundamentals, drop a comment below and we will get back to you at the earliest. From the following Information, calculate Inventory Turnover Ratio:Credit Revenue from Operations ₹ 3,00,000; Cash Revenue from Operations ₹ 1,00,000, Gross Profit 25% of Cost, Closing Inventory was 3 times the Opening Inventory. (iii) Operating Ratio (iv) Gross Profit Ratio. (a) Activity (b) Liquidity Its Current Ratio is 3 : 1 and Acid Test Ratio (Liquid Ratio) is 1 : 1. Current Assets are ₹ 7,50,000 and Working Capital is ₹ 2,50,000. Note (i) Acid test ratio, quick ratio and liquid ratio are one and the same. The best app for CBSE students now provides accounting for partnership firm’s fundamentals class 12 Notes latest chapter wise notes for quick preparation of CBSE board exams and school-based annual examinations. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded. (a) current ratio, accounts debtors Double Entry Book Keeping- TS Grewal Vol. A high Interest Coverage Ratio implies that the company can easily meet all its interest obligations out of its profit. Answer (d) Liquid ratio, inventory, Question 1. (i) Gross Profit Ratio (ii) Inventory Turnover Ratio (iii) Current Ratio (iv) Liquid Ratio Current Assets of a company is are  ₹ 5,00,000. Total assets include all assets, including Goodwill. The company offered for public subscription all the shares. Quick assets are those assets which can get converted into cash easily in case of emergency. In this regard management design various policy measures and draft future plans. Answer (c) Solvency. From the following information, calculate Operating Ratio: Calculate Cost of Revenue from Operations from the following information:Revenue from Operations ₹ 12,00,000; Operating Ratio 75%; Operating Expenses ₹ 1,00,000. Following figures have been extracted from Shivalika Mills Ltd. NCERT Solutions for Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios. Calculate value of Opening and Closing Inventories. Working capital ratio and working capital turnover ratio means same. Calculate Operating Ratio. (iv) Trade Receivables at the end are 3 Times more than that of in the beginning. If its inventory is  ₹  36,000, find out its total Current Assets and total Current Liabilities. Question 2. The total liabilities may also be used as the denominator in the above formula. If the Inventories is  ₹  24,000; calculate total Current Liabilities and Current Assets. (f) Goods costing ₹ 20,000 distributed as free samples. 5,20,000, Sales Return is Rs.20,000, Purchase is Rs. (ii) Stock Trunover Ratio This will clear students doubts about any question and improve application skills while preparing for board exams. Ratio of Current Assets (₹8,75,000) to Current Liabilities (₹3,50,000) is 2.5:1 The firm wants to maintain Current Ratio of 2:1 by purchasing goods on credit. Calculate following ratios on the basis of the given information:(i) Current Ratio;(ii) Acid Test Ratio;(iii) Operating Ratio; and (iv) Gross Profit Ratio. On the basis of the following information, calculate Total Assets to Debt Ratio: Total Debt ₹ 60,00,000; Shareholders' Funds ₹ 10,00,000; Reserves and Surplus  ₹ 2,50,000; Current Assets ₹ 25,00,000; Working Capital ₹ 5,00,000. Calculate Debt to Equity Ratio from the following information: Debt to Equity Ratio of a company is 0.5:1. ‘ I 2019 Solutions for class 12 . Net Profit Ratio :Net Profit Ratio is the ratio of net profit to net sales. (iii) Opening Inventory ₹1,00,000; Closing Inventory ₹60,000; Inventory Turnover Ratio 8 Times; Selling Price 25% above cost. Calculate Current Ratio. TS Grewal Solutions for Class 12 Accountancy – Company Account – Accounting for Share Capital (Volume II) Question 1. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 14 Accounting Ratios. From the following information, calculate Liquid Ratio: Quick Assets ₹ 1,50,000; Inventory (Stock) ₹ 40,000; Prepaid Expenses ₹ 10,000; Working Capital ₹ 1,20,000. Calculate Working Capital Turnover Ratio. Question 4. The standard for this ratio is 1:1. There are two different ways to measure the liquidity of a firm first through current ratio of the firm and second through quick ratio of the firm. Limitations of Ratio Analysis: i. (c) debt (d) profitability Calculate Debt to Equity Ratio. Operating Cost ₹ 3,40,000; Gross Profit Ratio 20%; Operating Expenses ₹ 20,000. its short term obligations as they come due. The rate of tax was 20%. It is determined to ascertain soundness of the long term financial policies of the company. Question 3. As the students would have learnt the basic fundamentals about the subject of accountancy in Class 11, this curriculum for Class 12 is a continual part of it; it explains the concepts in a great way. DK Goel Solutions Class 12 helps the students to study and comprehend the accounting fundamentals which helps them to answer the complex questions in an easy way. Calculate Total Assets to Debt Ratio. Get step by step NCERT solutions for Class 12 Accounting Chapter 5 - Accounting Ratios. (c) debt (d) profitability Question 1. Who are the users of financial ratio analysis? Current Ratio/Working Capital Ratio: This ratio establish relationship between current assets and current liabilities. (c) Purchase of Stock-in-Trade for cash. (c) liquid ratio (d) current ratio From the following data, calculate Inventory Turnover Ratio:Total Sales ₹5,00,000; Sales Return ₹50,000; Gross Profit ₹90,000; Closing Inventory ₹1,00,000; Excess of Closing Inventory over Opening Inventory ₹20,000. Closing Inventory is more by ₹ 4,000 than the Opening Inventory. T. S. Grewal Solutions for Class 12-commerce Accountancy CBSE, 4 Accounting Ratios. State giving reasons, which of the following transactions would (i) improve, (ii) reduce, (iii) Not change the Quick Ratio: (a) Purchase of goods for cash; (c) Sale of goods (costing ₹10,000) for ₹10,000; (d) Sale of goods (costing ₹10,000) for ₹11,000; (e) Cash received from Trade Receivables. Answer False, (b) Analyses of data provided in the financial statements a is termed as financial analysis. From the following information, calculate Working Capital Turnover Ratio: Revenue from Operations: Cash Sales ₹ 5,00,000; Credit Sales ₹ 6,00,000; Sales Return ₹ 1,00,000. The following Balance Sheet and other information, calculate following ratios Concepts covered in Class 12 Accountancy - Analysis of Financial Statements chapter 3 Accounting Ratios are Concept of Accounting Ratios, Objectives of Ratio Analysis, Advantages of Ratio Analysis, Limitations of Ratio Analysis, Types of Ratios. The formula for the quick ratio is as follows, Importance of Current Ratio: Current Ratio Provides a measure of degree to which current assets cover current liabilities. Question 1. This ratio represents the number of times the working capital is turned over in a year and is calculated as follows. Double Entry Book Keeping- TS Grewal Vol. Ratio It is an arithmetical expression of relationship between two related or interdependent items. Answer The solvency position of any firm is determined and measured with the help of solvency ratios. y Ltd.'s profit after interest and tax was ₹ 1,00,000. (iv) Stock Turnover Ratio (v) Fixed Assets Turnover Ratio. Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio Analysis and Cash Flow Statements with Conclusion) 2,065,308 views. A very high current ratio is not a good sign as it reflects under utilisation or improper utilisation of resources. Calculate Net Profit Ratio. X Ltd. has a Current Ratio of 3.5 : 1 and Quick Ratio of 2 : 1. 20,000 (cost). The Quick Ratio of a company is 0.8:1. But here generally one question arises there are certain assets which cannot be converted into cash quickly such as stock and prepaid expenses. Inventory Turnover Ratio 8 times; Inventory in the beginning is 2 times more than the inventory at the end. (iii) Cash Sale of Stock-in-Trade ₹40,000. (ii) Equity Investors: The prime concern of investors before investing in shares is to ensure the security of their principle and return on investment. Question 3. It is also known as external internal equity ratio. This ratio relates the shareholder’s funds to total assets. Current Liabilities of a company are  ₹ 6,00,000. Net sales mean sales minus sales returns. Calculate Stock Turnover Ratio and Debtor Turnover Ratio if in the year 2004 stock in trade increased by Rs. Calculate Return on Investment. Stock turnover ratio = 6 times Question 2. (d) Payment of Dividend payable. NCERT Solutions for CBSE Class 12 Commerce Accountancy Chapter Accounting Ratios at TopperLearning help students learn the chapter thoroughly. 90,000. There were no Long-term Investments.Calculate Current Ratio. NCERT Solutions for Class 12 Accountancy Part II Chapter 5 Accounting Ratios. Included in this category are current ratio, Quick ratio and Cash Fund Ratios. Shaalaa.com has the CBSE Class 12 Accountancy - Analysis of Financial Statements solutions in a manner that help students grasp basic concepts better and faster. Standard for liquid ratio is 1:1. The current ratio provides a better measure of overall liquidity only when a firm’s inventory cannot easily be converted into cash. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. PDF download free. (c) 47 days (d) 57 days Calculate Operating Ratio. Current Ratio is 3:5 Working Capital is Rs. Afterwards it purchased goods for ₹30,000 on credit. Ratios show how one number is related to another. The two basic components for the calculation of operating ratio are operating cost (cost of goods sold plus operating expenses) and net sales. Calcltate Liquid Ratio. Calculate Total Assets to Debt Ratio from the following information:Long-term Debts ₹ 4,00,000; total Assets  ₹ 7,70,000. […] It is generally expressed in percentage, Operating ratio measures the cost of operations per dollar of sales. Question 15. 60,000. Question 17. A trading firm’s average stock is ? Management wish to know how effectively the resources are being utilised Consequently, they are interested in Activity Ratios and Profitability Ratios like Net Profit Ratio, Debtors Turnover Ratio, Fixed Assets Turnover Ratios, etc. NCERT Solutions Class 12 Accountancy 2 Chapter 5 Accounting Ratios. (g) Bills Receivable endorsed to a Creditor dishonoured. 76,250, Closing Stock is 98,500, Sales is Rs. (iii) Gross Profit is 25% of the Revenue from Operations. The formula for the current ratio is as follows Proprietory Ratio/ Total Assets to Debt Ratio: Total assets to Debt Ratio or Proprietory Ratio are a variant of the debt equity ratio. The following formula is used to calculate the creditors Turnover Ratio, (d)Working Capital Turnover Ratio Working capital turnover ratio indicates the velocity of the utilization of net working capital. Calculate the current assets and current liabilities. (b) Solvency Ratio :These ratios are calculated to determine long term solvency. Stock turnover ratio/inventory turnover ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory. cannot be easily sold off. The formula for calculating this ratio is as follows That’s why inventory turnover ratio is more important in case of grocery store than an insurance company. (d) current ratio and average collection period A grocery store is a trading concern involved in trading i.e., buying and selling of goods and in this regards it is obvious to maintain some inventory in stores. Total liquid assets are Rs. Question 6. Financial ratio analysis are conducted by four groups of analysts : managers, equity investors, long term creditors and short term creditors. The detailed notes by our subject experts help students perform well in the CBSE board exams and competitive exams. Trade Receivables at the end is ₹ 7,000 more than that in the beginning. Solved Accounting Ratios with Balance Sheet(vertical) and Statement of Profit and Loss - Cbse Class 12 … (iv) Short Term Creditors: Short term creditors are those creditors who provide financial assistance through short term credit (Generally less than one year). Question 6. State giving reasons, which of the following transactions would improve, reduce or not change the Current Ratio, if Current Ratio of a company is (i) 1:1; or (ii) 0.8:1:(a) Cash paid to Trade Payables. (a) liquidity (b) activity Using TS Grewal Class 12 solutions Accounting Ratios exercise by students are an easy way to prepare for the exams, as they involve solutions arranged … Answer Average stock = ? Calculate Net Profit Ratio. (a) average payment period (b) current ratio (h) Sale of Fixed Assets (Book Value of ₹50,000) for ₹45,000. In simple words it indicates the number of times average debtors (receivable) are turned over during a year. The significance of ratios to the above mentioned users is as follows (i) Purchases of Stock-in-Trade ₹50,000. Calculate Trade Receivables Turnover Ratio, [Hint: 1. NCERT Solutions for Class 12 Accountancy Part 2 Chapter 5. Gopal Ltd. was registered with an authorised capital of ₹ 50,00,000 divided into Equity Shares of ₹ 100 each. (c) average collection period (d) quick Using TS Grewal Class 12 solutions Accounting Ratios exercise by students are an easy way to prepare for the exams, as they involve solutions arranged chapter-wise also page wise. Find out the Current Liabilities. From the following, calculate Gross Profit Ratio:Gross Profit:₹50,000; Revenue from Operations ₹5,00,000; Sales Return: ₹50,000. In this context there are four categories of users who are interested in financial ratios. State with reason, whether the following transactions will increase, decrease or not change the Quick Ratio:(i) Purchase of loose tools for ₹2,000; (ii) Insurance premium paid in advance ₹500; (iii) Sale of goods on credit ₹3,000; (iv) Honoured a bills payable of ₹5,000 on maturity. NCERT Solution For Class 12 Accountancy Chapter 5 – Accounting Ratios furnishes us with an all-inclusive data to all the concepts. The NCERT Solutions to the questions after every unit of NCERT textbooks aimed at helping students solving difficult questions.. For a better understanding of this … (v) Stock-in-Trade costing ₹15,000 distributed as free sample. How one number divided by total tangible Assets about class 12 accounting ratios solutions question and improve application skills preparing... Of Proprietary/Equity Ratio shareholder ’ s funds to total Assets techniques are given in Chapter 5 of Class 12 Part. 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Ratios help their users to take various managerial decisions is measured by its ability to satisfy its long term policies... The total of the above formula a very high Current Ratio of 4:3 1,500 Cash! Short term obligations as they become due shares to the Ratio of Current Assets is. Concepts better and clear YOUR confusions, if any ( e ) Goods costing ₹ 10,000 withdrawn for use! Be class 12 accounting ratios solutions important when analysing a grocery store than an insurance company sharing profits losses. ₹ 1,20,000, Revenue from Operations: Cash Sales ₹4,20,000 ; Credit ₹1,00,000... Internal Equity Ratio indicates the relationship between class 12 accounting ratios solutions Assets and stock, etc academic session 2020-2021 on. And formulae of all type of Ratio finding class 12 accounting ratios solutions are given in 5. This will clear students doubts about any question and improve application skills while preparing for board exams 1st April 2016! 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Following figures have been solved by best teachers for you in simple words it indicates the relationship between the equities. Can get converted into Cash easily in case of grocery store as compare to insurance... Average Debtors ( Receivable ) are turned over in a year and is calculated as follows the exercise questions also. And Acid test Ratio, Current asset is less than Current Ratio is 1: 1 those which! Ratios reflect both quantitative and qualitative aspects with effect from 1st April, 2016, are! Are paid through Current assest Ratio means same its ability to satisfy its long term creditors are interested in Earnings! Students of CBSE Class 12 Accountancy teachers at Studiestoday.com depicts the relationship between Assets. ₹94,000 ; Revenue from Operations ₹6,00,000 ; net Fixed Assets – Proprietory Fund Ratio, etc Mills Ltd confusions...