12th Accountancy Monthly Test -1 ( Ratio Analysis )

St. Britto Hr. Sec. School - Madurai

12th Accountancy Monthly Test -1 ( Ratio Analysis )-Aug 2020

Time : 2.30 Hours

Part - A

Multiple Choice Question - Answer All Question

Match List I with List II and select the correct answer using the codes given below:

List I List II

(i) Current ratio 1. Liquidity

(ii) Net profit ratio 2. Efficiency

(iii) Debt-equity ratio 3. Long term solvency

(iv) Inventory turnover ratio 4. Profitability

(i) (ii) (iii) (iv)

1 2 3 4
(i) (ii) (iii) (iv)

1 4 3 2
(i) (ii) (iii) (iv)

3 2 4 1
(i) (ii) (iii) (iv)

4 3 2 1

The relationship between sales and capital employed is known as ______________

Capital Turnover Ratio
Current Ratio
Stock Turnover Ratio
Solvency Ratio

Current ratio indicates

Ability to meet short term obligations
Efficiency of management
Profitability
Long term solvency

Liquid liabilities means ________________

Current liabilities
Current liabilities – Bank overdraft
Current liabilities + Bank overdraft
None of these

Operating expenses include ____________

Administration and Selling Expenses
Selling and Distribution Expenses
Administration, Selling and Distribution Expenses
None of these

The Opening stock and Closing stock are Rs.72,000 and Rs.48,000 respectively. Then the average stock is ___________

Rs.1,20,000
Rs.60,000
Rs.24,000
Rs.20,000

Liquidity ratios are otherwise called as ___________

Long term solvency ratio
Short term solvency ratio
Both (a) & (b)
None of these

Solvency ratios are expressed in terms of ________________

Proportion
Times
Percentage
None of these

_____________ Assets = Total current assets - (Stock + Prepaid expenses)

Current
Liquid
Fixed
Tangible

Liquid ratio is otherwise known as __________

Current ratio
Absolute Ratio
Quick ratio/Acide test ratio
None of these

Part - B

Generic 2 - Answer All Question

What is quick ratio?

From the following information, calculate debt equity ratio:

Balance sheet (Extract) as on 31.03.2018

Particulars Rs.

I EQUITY AND LIABILITIES

1. Shareholders' funds

  (a) Share capital

Equity share capital 1,00,000

  (b) Reserves and surplus 60,000

2. Non-current liabilities

  Long-term borrowings (Debentures) 80,000

3. Current liabilities

  (a) Trade payables 50,000

  (b) Other current liabilities

  Outstanding expenses 30,000

Total 3,20,000

Balance sheet (Extract) as on 31.03.2018
Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	1,00,000
(b) Reserves and surplus	60,000
2. Non-current liabilities
Long-term borrowings (Debentures)	80,000
3. Current liabilities
(a) Trade payables	50,000
(b) Other current liabilities
Outstanding expenses	30,000
Total	3,20,000

What is meant by accounting ratios?

From the following information calculate capital gearing ratio:

Balance Sheet (Extract) as on 31.03.2018

Particulars Rs.

I EQUITY AND LIABILITIES

1. Shareholders' funds

  (a) Share capital

  Equity share capital 2,00,000

  6% Preference share capital 1,00,000

  (b) Reserves and surplus

  General reserve 1,25,000

  Surplus 75,000

2. Non-current liabilities

  Long-term borrowings (8% Debentures) 2,00,000

3. Current liabilities

  Trade payables 1,50,000

  Provision for tax 50,000

Total 9,00,000

Balance Sheet (Extract) as on 31.03.2018
Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	2,00,000
6% Preference share capital	1,00,000
(b) Reserves and surplus
General reserve	1,25,000
Surplus	75,000
2. Non-current liabilities
Long-term borrowings (8% Debentures)	2,00,000
3. Current liabilities
Trade payables	1,50,000
Provision for tax	50,000
Total	9,00,000

Following is the balance sheet of Magesh Ltd. as on 31st March, 2019:

Particulars Rs.

I EQUITY AND LIABILITIES

1. Shareholders’ funds

  Equity share capital 2,00,000

2. Non-current liabilities

  Long term borrowings 50,000

3. Current liabilities

  (a) Short-term borrowings 17,000

  (b) Trade payables 25,000

  (c) Other current liabilities

Expenses payable 3,000

  (d) Short-term provisions 5,000

Total 3,00,000

II ASSETS Rs.

1. Non-current assets

Fixed assets

  (a) Tangible assets 1,50,000

  (b) Trade receivables 70,000

  (c) Cash and cash equivalents 30,000

  (d) Other current assets

Prepaid expenses 5,000

Total 3,00,000

Calculate:
(i) Current ratio
(ii) Quick ratio

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders’ funds
Equity share capital	2,00,000
2. Non-current liabilities
Long term borrowings	50,000
3. Current liabilities
(a) Short-term borrowings	17,000
(b) Trade payables	25,000
(c) Other current liabilities
Expenses payable	3,000
(d) Short-term provisions	5,000
Total	3,00,000
II ASSETS	Rs.
1. Non-current assets
Fixed assets
(a) Tangible assets	1,50,000
(b) Trade receivables	70,000
(c) Cash and cash equivalents	30,000
(d) Other current assets
Prepaid expenses	5,000
Total	3,00,000

What does return on investment ratio indicate?

Calculate quick ratio of Ananth Constructions Ltd from the information given below.

Particulars Rs.

Total current liabilities 1,00,000

Total current assets 2,50,000

Inventories 50,000

Prepaid expenses 15,000

Particulars	Rs.
Total current liabilities	1,00,000
Total current assets	2,50,000
Inventories	50,000
Prepaid expenses	15,000

State any two limitations of ratio analysis.

Calculate current ratio from the following information:

Particulars Rs. Particulars Rs.

Current investments 80,000 Trade creditors 1,60,000

Inventories 1,60,000 Bills payable 1,00,000

Trade receivables 4,00,000 Expenses payable 1,40,000

Cash and cash equivalents 1,20,000

Prepaid expenses 40,000

Part - C

Generic 3 - Answer All Question

From the following information of Ashika Ltd., calculate fixed assets turnover ratio:
(i) Revenue from operations during the year were Rs.60,00,000.
(ii) Fixed assets at the end of the year was Rs.6,00,000.

How is operating profit ascertained?

Bring out the limitations of ratio analysis.

State any three advantages of ratio analysis.

Explain the objectives of ratio analysis.

From the following Balance Sheet of Arunan Ltd. as on 31.03.2019 calculate
(i) Debt-equity ratio
(ii) Proprietary ratio and
(iii) Capital gearing ratio.

Balance Sheet of Arunan Ltd. as on 31.03.2019

Particulars Rs.

I EQUITY AND LIABILITIES

1. Shareholders' funds

  (a) Share capital

  Equity share capital 1,50,000

  8% Preference share capital 2,00,000

  (b) Reserves and surplus 1,50,000

2. Non current liabilities

  Long term borrowings (9% Debentures) 4,00,000

3. Current liabilities

  Short-term borrowings from banks 25,000

  Trade payables 75,000

Total 10,00,000

II ASSETS

1. Non-current assets

  Fixed assets 7,50,000

2. Current assets

  (a) Inventories 1,20,000

  (b) Trade receivables 1,00,000

  (c) Cash and cash equivalents 27,500

  (d) Other current assets

  Expenses paid in advance 2,500

Total 10,00,000

Balance Sheet of Arunan Ltd. as on 31.03.2019
Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	1,50,000
8% Preference share capital	2,00,000
(b) Reserves and surplus	1,50,000
2. Non current liabilities
Long term borrowings (9% Debentures)	4,00,000
3. Current liabilities
Short-term borrowings from banks	25,000
Trade payables	75,000
Total	10,00,000
II ASSETS
1. Non-current assets
Fixed assets	7,50,000
2. Current assets
(a) Inventories	1,20,000
(b) Trade receivables	1,00,000
(c) Cash and cash equivalents	27,500
(d) Other current assets
Expenses paid in advance	2,500
Total	10,00,000

Calculate
(i) Inventory turnover ratio
(ii) Trade receivable turnover ratio
(iii) Trade payable turnover ratio and
(iv) Fixed assets turnover ratio from the following information obtained from Delphi Ltd.

Particulars As on
31st March, 2018
Rs. As on
31st March, 2019
Rs.

Inventory 1,40,000 1,00,000

Trade receivables 80,000 60,000

Trade payables 40,000 50,000

Fixed assets 5,50,000 5,00,000

Additional information:
(i) Revenue from operations for the year Rs.10,50,000
(ii) Purchases for the year Rs.4,50,000
(iii) Cost of revenue from operations Rs.6,00,000.
Assume that sales and purchases are for credit.

Particulars	As on 31st March, 2018 Rs.	As on 31st March, 2019 Rs.
Inventory	1,40,000	1,00,000
Trade receivables	80,000	60,000
Trade payables	40,000	50,000
Fixed assets	5,50,000	5,00,000

From the following figures obtained from Kalpana Ltd, calculate the trade payables turnover ratio and credit payment period (in days).

Particulars Rs.

Credit purchases during 2018 – 2019 1,00,000

Trade creditors as on 1.4.2018 20,000

Trade creditors as on 31.3.2019 10,000

Bills payable as on 1.4.2018 4,000

Bills payable as on 31.3.2019 6,000

Particulars	Rs.
Credit purchases during 2018 – 2019	1,00,000
Trade creditors as on 1.4.2018	20,000
Trade creditors as on 31.3.2019	10,000
Bills payable as on 1.4.2018	4,000
Bills payable as on 31.3.2019	6,000

From the given information calculate the inventory turnover ratio and inventory conversion period (in months) of Sania Ltd.

Particulars Rs.

Revenue from operations 1,90,000

Inventory at the beginning of the year 40,000

Inventory at the end of the year 20,000

Purchases made during the year 90,000

Carriage inwards 10,000

Particulars	Rs.
Revenue from operations	1,90,000
Inventory at the beginning of the year	40,000
Inventory at the end of the year	20,000
Purchases made during the year	90,000
Carriage inwards	10,000

Part - D

Generic 5 - Answer All Question

Following is the balance sheet of Lakshmi Ltd. as on 31st March, 2019:

Particulars Rs.

I EQUITY AND LIABILITIES

1. Shareholders’ funds

Equity share capital 4,00,000

2. Non-current liabilities 2,00,000

Long term borrowings

3. Current liabilities

(a) Short-term borrowings 50,000

(b) Trade payables 3,10,000

(c) Other current liabilities

Expenses payable 15,000

(d) Short-term provisions 25,000

Total 10,00,000

II ASSETS

1. Non-current assets

(a) Fixed assets 4,00,000

Tangible assets

2. Current assets

(a) Inventories 1,60,000

(b) Trade debtors 3,20,000

(c) Cash and cash equivalents 80,000

(d) Other current assets

Prepaid expenses 40,000

Total 10,00,000

Calculate:
(i) Current ratio
(ii) Quick ratio

Particulars	Rs.
I EQUITY AND LIABILITIES
1. Shareholders’ funds
Equity share capital	4,00,000
2. Non-current liabilities	2,00,000
Long term borrowings
3. Current liabilities
(a) Short-term borrowings	50,000
(b) Trade payables	3,10,000
(c) Other current liabilities
Expenses payable	15,000
(d) Short-term provisions	25,000
Total	10,00,000
II ASSETS
1. Non-current assets
(a) Fixed assets	4,00,000
Tangible assets
2. Current assets
(a) Inventories	1,60,000
(b) Trade debtors	3,20,000
(c) Cash and cash equivalents	80,000
(d) Other current assets
Prepaid expenses	40,000
Total	10,00,000

From the following information calculate capital gearing ratio:

Balance Sheet (Extract) as on 31.03.2018

Particulars Rs.

I. EQUITY AND LIABILITIES

1. Shareholders' funds

(a) Share capital

Equity share capital 4,00,000

5% Preference share capital 1,00,000

(b) Reserves and surplus

General reserve 2,50,000

Surplus 1,50,000

2. Non-current liabilities

Long-term borrowings (6% Debentures) 3,00,000

3. Current liabilities

(a) Trade payables 1,20,000

Provision for tax 30,000

Total 13,50,000

**Balance Sheet (Extract) as on 31.03.2018**
Particulars	Rs.
I. EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	4,00,000
5% Preference share capital	1,00,000
(b) Reserves and surplus
General reserve	2,50,000
Surplus	1,50,000
2. Non-current liabilities
Long-term borrowings (6% Debentures)	3,00,000
3. Current liabilities
(a) Trade payables	1,20,000
Provision for tax	30,000
Total	13,50,000

From the following details of a business concern calculate net profit ratio.

Particulars Rs.

Revenue from operations 3,50,000

Cost of revenue from operations 1,50,000

Administration expenses 50,000

Selling expenses 10,000

Particulars	Rs.
Revenue from operations	3,50,000
Cost of revenue from operations	1,50,000
Administration expenses	50,000
Selling expenses	10,000

Calculate the current ratio from the following information.

Particulars Rs. Particulars Rs.

Current investments 40,000 Fixed assets 5,00,000

Inventories 2,00,000 Trade creditors 80,000

Trade debtors 1,20,000 Bills payable 50,000

Bills receivable 80,000 Expenses payable 20,000

Cash and cash equivalents 10,000 Non-current liability 3,00,000

Particulars	Rs.	Particulars	Rs.
Current investments	40,000	Fixed assets	5,00,000
Inventories	2,00,000	Trade creditors	80,000
Trade debtors	1,20,000	Bills payable	50,000
Bills receivable	80,000	Expenses payable	20,000
Cash and cash equivalents	10,000	Non-current liability	3,00,000

From the following Balance Sheet of James Ltd. as on 31.03.2019 calculate
(i) Debt-equity ratio
(ii) Proprietary ratio
(iii) Capital gearing ratio

Balance Sheet of Sundaram Ltd. as on 31.3.2019

Particulars Amount
Rs.

I. EQUITY AND LIABILITIES

1. Shareholders' funds

(a) Share capital

Equity share capital 2,50,000

6% Preference share capital 2,00,000

(b) Reserves and surplus 1,50,000

2. Non-current liabilities

Long-term borrowings (8% Debentures) 3,00,000

3. Current liabilities

Short-term borrowings from banks 2,00,000

Trade payables 1,00,000

Total 12,00,000

II ASSETS

1. Non-current assets

Fixed assets 8,00,000

2. Current assets

(a) Inventories 1,20,000

(b) Trade receivables 2,65,000

(c) Cash and Cash equivalents 10,000

(d) Other current assets

Expenses paid in advance 5,000

Total 12,00,000

**Balance Sheet of Sundaram Ltd. as on 31.3.2019**
Particulars	Amount Rs.
I. EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	2,50,000
6% Preference share capital	2,00,000
(b) Reserves and surplus	1,50,000
2. Non-current liabilities
Long-term borrowings (8% Debentures)	3,00,000
3. Current liabilities
Short-term borrowings from banks	2,00,000
Trade payables	1,00,000
Total	12,00,000
II ASSETS
1. Non-current assets
Fixed assets	8,00,000
2. Current assets
(a) Inventories	1,20,000
(b) Trade receivables	2,65,000
(c) Cash and Cash equivalents	10,000
(d) Other current assets
Expenses paid in advance	5,000
Total	12,00,000

From the following trading activities of Jones Ltd. calculate
(i) Gross profit ratio
(ii) Net profit ratio
(iii) Operating cost ratio
(iv) Operating profit ratio

Statement of Profit and Loss

Particulars Rs.

I. Revenue from operations 4,00,000

II. Other Income:

Income from investments 4,000

III. Total revenues (I+II) 4,04,000

IV. Expenses:

Purchases of Stock-in-trade 2,10,000

Changes in inventories 30,000

Finance costs 24,000

Other expenses (Administration and selling) 60,000

Provision for tax 30,000

Total expenses 3,24,000

V Profit before tax (III - IV) 80,000

**Statement of Profit and Loss**
Particulars	Rs.
I. Revenue from operations	4,00,000
II. Other Income:
Income from investments	4,000
III. Total revenues (I+II)	4,04,000
IV. Expenses:
Purchases of Stock-in-trade	2,10,000
Changes in inventories	30,000
Finance costs	24,000
Other expenses (Administration and selling)	60,000
Provision for tax	30,000
Total expenses	3,24,000
V Profit before tax (III - IV)	80,000

Calculate gross profit ratio from the following:
Revenue from operations Rs. 2,50,000, Cost of revenue from operations Rs. 2,10,000 and Purchases Rs. 1,80,000.

From the following information calculate debt equity ratio.

Balance Sheet (Extract) as on 31st March, 2019

Particulars Amount
Rs.

I. EQUITY AND LIABILITIES

1. Shareholders' funds

(a) Share capital

Equity share capital 6,00,000

(b) Reserves and surplus 2,00,000

2. Non-current liabilities

Long-term borrowings (Debentures) 6,00,000

3. Current liabilities

(a) Trade payables 1,60,000

(b) Other current liabilities

Outstanding expenses 40,000

Total 16,00,000

**Balance Sheet (Extract) as on 31st March, 2019**
Particulars	Amount Rs.
I. EQUITY AND LIABILITIES
1. Shareholders' funds
(a) Share capital
Equity share capital	6,00,000
(b) Reserves and surplus	2,00,000
2. Non-current liabilities
Long-term borrowings (Debentures)	6,00,000
3. Current liabilities
(a) Trade payables	1,60,000
(b) Other current liabilities
Outstanding expenses	40,000
Total	16,00,000

From the given information calculate the inventory turnover ratio and inventory conversion period (in months) of Devi Ltd.

Particulars Rs

Revenue from operations 12,00,000

Inventory at the beginning of the year 1,70,000

Inventory at the end of the year 1,30,000

Purchases made during the year 6,90,000

Carriage inwards 20,000

Particulars	Rs
Revenue from operations	12,00,000
Inventory at the beginning of the year	1,70,000
Inventory at the end of the year	1,30,000
Purchases made during the year	6,90,000
Carriage inwards	20,000

Comment

Add Comment

List I	List II
(i) Current ratio	1. Liquidity
(ii) Net profit ratio	2. Efficiency
(iii) Debt-equity ratio	3. Long term solvency
(iv) Inventory turnover ratio	4. Profitability

InstaQB

Institutions

12th Standard English Medium

12th Standard Tamil Medium

11th Standard English Medium

11th Standard Tamil Medium

10th Standard English Medium

9th Standard English Medium

8th Standard English Medium

7th Standard English Medium

Class XII

Class XI

12Th Standard

11Th Standard

10Th Standard

9Th Standard

12th Accountancy Monthly Test -1 ( Ratio Analysis )

St. Britto Hr. Sec. School - Madurai

12th Accountancy Monthly Test -1 ( Ratio Analysis )-Aug 2020

Part - A

Multiple Choice Question - Answer All Question

Match List I with List II and select the correct answer using the codes given below: List I List II (i) Current ratio 1. Liquidity (ii) Net profit ratio 2. Efficiency (iii) Debt-equity ratio 3. Long term solvency (iv) Inventory turnover ratio 4. Profitability

The relationship between sales and capital employed is known as ______________

Current ratio indicates

Liquid liabilities means ________________

Operating expenses include ____________

The Opening stock and Closing stock are Rs.72,000 and Rs.48,000 respectively. Then the average stock is ___________

Liquidity ratios are otherwise called as ___________

Solvency ratios are expressed in terms of ________________

_____________ Assets = Total current assets - (Stock + Prepaid expenses)

Liquid ratio is otherwise known as __________

Part - B

Generic 2 - Answer All Question

What is quick ratio?

What is meant by accounting ratios?

What does return on investment ratio indicate?

Calculate quick ratio of Ananth Constructions Ltd from the information given below. Particulars Rs. Total current liabilities 1,00,000 Total current assets 2,50,000 Inventories 50,000 Prepaid expenses 15,000

State any two limitations of ratio analysis.

Calculate current ratio from the following information: Particulars Rs. Particulars Rs. Current investments 80,000 Trade creditors 1,60,000 Inventories 1,60,000 Bills payable 1,00,000 Trade receivables 4,00,000 Expenses payable 1,40,000 Cash and cash equivalents 1,20,000 Prepaid expenses 40,000

Part - C

Generic 3 - Answer All Question

From the following information of Ashika Ltd., calculate fixed assets turnover ratio: (i) Revenue from operations during the year were Rs.60,00,000. (ii) Fixed assets at the end of the year was Rs.6,00,000.

How is operating profit ascertained?

Bring out the limitations of ratio analysis.

State any three advantages of ratio analysis.

Explain the objectives of ratio analysis.

Part - D

Generic 5 - Answer All Question

From the following details of a business concern calculate net profit ratio. Particulars Rs. Revenue from operations 3,50,000 Cost of revenue from operations 1,50,000 Administration expenses 50,000 Selling expenses 10,000

Calculate gross profit ratio from the following: Revenue from operations Rs. 2,50,000, Cost of revenue from operations Rs. 2,10,000 and Purchases Rs. 1,80,000.

Comment

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Match List I with List II and select the correct answer using the codes given below:

List I List II

(i) Current ratio 1. Liquidity

(ii) Net profit ratio 2. Efficiency

(iii) Debt-equity ratio 3. Long term solvency

(iv) Inventory turnover ratio 4. Profitability

Calculate quick ratio of Ananth Constructions Ltd from the information given below.

Particulars Rs.

Total current liabilities 1,00,000

Total current assets 2,50,000

Inventories 50,000

Prepaid expenses 15,000

From the following information of Ashika Ltd., calculate fixed assets turnover ratio:
(i) Revenue from operations during the year were Rs.60,00,000.
(ii) Fixed assets at the end of the year was Rs.6,00,000.

From the following details of a business concern calculate net profit ratio.

Particulars Rs.

Revenue from operations 3,50,000

Cost of revenue from operations 1,50,000

Administration expenses 50,000

Selling expenses 10,000

Calculate gross profit ratio from the following:
Revenue from operations Rs. 2,50,000, Cost of revenue from operations Rs. 2,10,000 and Purchases Rs. 1,80,000.