Ratio Analysis Problems

1. From the following balance sheet of ram & co you are required to calculate a) current ratio b)
quick ratio c) Absolute quick ratio

Liabilities Amount Assets Amount

9% preference shares 1,00,000 Good will 60,000
Reserves 20,000 Fixed assets 50,000
Term loans 80,000 Stock 30,000
Creditors 50,000 Advances 10,000
Bank overdraft 10,000 Cash in hand 60,000
Bills payables 20,000 Cash at bank 40,000
Debtors 30,000
2,80,000 2,80,000

2. From the following information calculate a) Debt – Equity Ratio b) proprietary ratio
Liabilities Amount Assets Amount
Preference share 1,00,000 Fixed assets 4,00,000
capital
Equity share capital 3,00,00 Investments 1,00,000
Reserves & surplus 1,10,000 Current assets 2,00,000
Secured loans 1,50,000 Prepaid expenses 10,000
Current liabilities 50,000
7,10,000 7,10,000

3. Calculate gross profit ratio

Sales 1,00,000
Sales returns 10,000
Opening stock 20,000
Purchases 60000
Purchase returns 15,000
Closing stock 5,000
4. Calculate debtor’s turnover ratio.
If total sales are 2,50,000
Cash sales 70,000
Debtors in the beginning 16,000
Debtors closing 8000
5. From the following information calculate stock turnover ratio
Opening stock 18,000
Closing stock 22,000
Purchases 46,000
Wages 14,000sales 80,000
Carriage inwards 4000
6. From the following information calculate a) debtor’s turnover ratio b) creditors turnover ratio c)
average collection period d) average payment period
Sales 8,75,000
Creditors 90,000
Opening debtors 48000
Closing debtors 52,000
Purchases 4,20,000
Debtors 59,000
7. You have given trading and profit & loss account of XYZ company limited for the year ended
march 31st 2016
Trading & P/L account
Particulars Amount Particulars Amount
To opening stock 30,000 By sales 1,10,000
To purchases 60,000 By closing stock 20000
To wages 10,000
To gross profit c/d 30,000
1,30,000 1,30,000
To administration 10,000 By gross profit b/d 30,000
expenses
To sales & distribution 5000
expenses
To net profit c/d 20,000
35000 35000

Calculate a) gross profit ratio b) net profit ratio c) operating profit ratio d) operating ratio
8. Given below p/l account and balance sheet of y company you are required to calculate a)
debtors turnover ratio b) creditors turnover ratio c) average collection period d) average
payment period
Trading and P/L account
Particulars Amount Particulars Amount
To opening stock 1,60,000 By sales 20,00,000
To purchases 15,92,000 By closing stock 2,40,000
To gross profit c/d 4,88,000
22,40,000 22,40,000
To administration 3,38,000 By gross profit b/d 4,88,000
expenses
To net profit c/d 1,50,000
4,88,000 4,88,000
Balance sheet

Liabilities Amount Assets Amount

Equity share capital 6,00,000 Plant & machinery 4,20,000
Reserves 3,00,000 Building 5,00,000
Debentures 4,00,000 Stock 2,40,000
 Creditors 2,60,000 Debtors 1,00,000
(-) bad debts 2000 80,000
Bills payables 1,40,000 Bills receivables 3,50,000
(-) provision 30,000 3,20,000
Provisions 1,20,000 Investments ( short term) 1,60,000
Cash in hand 1,00,000
18,20,000 18,20,000

9. From the following calculate a) Net assets turnover ratio b) fixed assets turnover ratio c) working
capital turnover ratio given sales 30,00,000
Particulars Amount Particulars Amount
Preference share 4,00,000 Plant & machinery 8,00,000
capital
Equity share capital 6,00,000 Land and buildings 5,00,000
General reserve 1,00,000 Motor car 2,00,000
p/l account 3,00,000 Furniture 1,00,000
15% debentures 2,00,000 Stock 1,80,000
14% loan 2,00,000 Debtors 1,10,000
Creditors 1,40,000 Bank 80,000
Bills payables 50,000 Cash 30,000
Outstanding expenses 10,000

10. From the following information calculate

a) Debt equity ratio b) current ratio
Debentures 1,40,000
Long term loans 70,000
General reserve 40,000
Creditors 66,000
Bills payables 14,000
Share capital 1,20,000
Bank balance 30,000
Debtors 70,000
11. Following is the summarized financial statement of ABC limited on march 31st 2017. You are
required to calculate debt equity ratio, current ratio, gross profit ratio, debtors turnover ratio
Balance sheet
Liabilities Amount Assets Amount
Equity share capital 15,00,000 Fixed assets 16,50,000
Reserves & surplus 6,00,000 Stock in hand 9,10,000
Debentures 5,00,000 Debtors 12,40,000
Creditors 12,00,000 Investments (short term) 1,60,000
Bank overdraft 2,00,000 Cash in hand 1,40,000
40,00,000 40,00,000
Additional Information: sales 74,40,000, gross profit 7,44,000