PROBLEMS ON RATIO ANALYSIS

From the following information prepare Balance Sheet

Current Ratio 2.5,
Liquid Ratio 1.5
Proprietary Ratio, 0.75,
Working capital Rs.60,000,
Reserve and Surplus Rs.40,000,
Bank Overdraft Rs.10,000
There is no Long Term Loan or Fictitious Assets.

PROBLEM NO: II
Ratios relating Cosmos Ltd are given as follows:
Gross Profit Ratio:

15%

Stock Velocity

6 months

Debtors Velocity

3 months

Creditors Velocity

3 months

Gross Profit

Rs. 60,000

Closing is equal to Opening Stock

Find out:
Sales
Closing Stock
Sundry Debtors
Sundry Creditors

PROBLEM 3

You have been furnished with the financial information of Progressive

Manufacturing Limited as under:
Balance sheet as on March 31
Liabilities

Assets
Rs

Rs

Equity share capital 10,00,00

(Rs 100 each)
0
Retained earnings

Plant
equipment

3,68,00 Land
0
building

Sundry creditors

and 6,40,000
and

1,04,00 Cash

80,000
1,60,000

0
Bills Payable
Other
liabilities

2,00,00 Sundry debtors

0
Rs 3,60,000
current
0

20,00 Less allowances 3,20,000

40,000
Stock

4,80,000

Prepaid
insurance
16,92,00
0

12,000
16,92,00
0

Statement of profit for the year ended March 31.

Sales

Rs 40,00,000

Less cost of goods

sold

30,80,000

Gross profit on sales

9,20,000

Less
expenses

6,80,000

operating

Net profit
Less taxes (0.35)
Net profit after taxes

2,40,000
84,000
1,56,000

Sundry debtors and stock at the beginning of the year were Rs

3,00,000 and Rs 4,00,000, respectively.
Determine the
Manufacturing Ltd:
a.
b.
c.
d.
e.
f.
g.
h.
i.

following

ratios

of

M/S

Progressive

Current ratio
Acid test ratio
Stock turnover
Debtors turnover
Gross profit ratio
profit ratio
Operating ratio
Earnings per share (EPS)
Rate of return on equity capital

PROBLEM 4

From the following particulars, prepare the Balance Sheet of SR Ltd., as at

March 31, 2015:
Current Ratio
Working Capital
Capital Block to Current Assets
Fixed Asset to Turnover
Cash Sales/Credit Sales
Debentures/Share Capital
Stock Velocity
Creditors Velocity
Debtors Velocity
Gross Profit Ratio
Capital Block:
Net Profit
Reserve

PROBLEM 5

2
Rs.5,00,000
3:2
2:3
2:3
1:3
3 months
3 months
3 months
30%
Equity Capital plus Debt
Capital
15% of Turnover
5% of Turnover

Using the following information, complete the Balance Sheet of PR Ltd.,

given below:
Acid Test Ratio
:
0.90
Total Debt to Net Worth
:
0.45:1
Turnover of Total Assets to Sales:
3:1
Gross Profit
:
40%
Average Collection Period (Assume 360 days a year) :
30 days
Inventory Turnover Ratio
4 times
Balance Sheet of PR Ltd., as on ..
Liabilities
Bills Payables
Equity Capital
Retained Earnings
Total

Amount
Assets
Rs.
????
Cash
2,30,000 Bills Receivables
3,70,000 Inventory
Plant & Machinery
????
Total

Amount
Rs.
????
????
????
????
????

PROBLEM 6

From the following information of SR Ltd., complete the proforma balance

sheet if its sales are Rs. 32,00,000.
Sales to Net worth

2.3 times

Current Debt to Net Worth

42%

Total Debt to Net worth

75%

Net Sales to Inventory

4.7 times

Current Ratio

2.9 times

Average Collection Period

64 days

Fixed Assets to Net worth

53.2%

Liabilities
Net worth
Long term Debt
Current Debt

Amount
Rs.
????
????
????

Assets
Fixed Assets
Cash
Stock

Amount
Rs.
????
????
????

Total

????

Sundry Debtors
Total

Problem 7
.From the data calculate:
a.
b.
c.
d.
e.
f.

Gross Profit Ratio

Net Profit Ratio
Return on Total Assets
Inventory Turnover
Working Capital Turnover
Net worth to Debt

Sales

25,20,000

Other Current Assets

7,60,000
Cost of sale
Net profit
15,00,000
Inventory
9,00,000
Current Liabilities

19,20,000
14, 40,000
3,60,000
8,00,000
6,00,000

Fixed Assets
Net worth
Debt.

????
????