S.

Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

1. LIQUIDITY RATIO
A. CURRENT RATIO:-
Current Ratio = Current Assets
Current Liabilities
Current assets are those which can be converted into cash within one year.
Current Assets :- Cash + Bank + Stock (Raw Material + Work in progress +
Finished Goods) + Debtors (Less Provision) + Bills Receivable +
Short Term Investments (Marketable Securities) + Prepaid Expenses
+ Loans and Advance + Accrued Incomes.
Note :- Debtors due within six months are to be included in current assets.
Current liabilities are those which are repayable within a year.
Current Liabilities:- Creditors + Bills Payable + Outstanding Expenses + Bank
Overdraft + Accrued Expenses + Provision for taxation +
Proposed Dividend + Unclaimed Dividend + Loans payable
within a year + Un-expired Income.
Current Liabilities = Total Debts – Long Term Debt
Current Liabilities = Total Assets – Capital Employed
Capital Employed = Shareholders’ Fund + Non-Current Liabilities (Long term
Borrowings + Long term Provision)
Capital Employed = Equity Share Capital + Pref. Share Capital + Reserves + Profit &
Loss A/c (Profit) + Long term Borrowings + Long term Provision

(1) Calculate the Current Ratio from the following particulars :-

Machinery 27,000 Sundry Debtors 1,10,000
Short Term Investments 30,000 Debentures 2,10,000
Cash in hand 40,000 Outstanding Expenses 50,000
Prepaid Expenses 20,000 Sundry Creditors 50,000
Bills Payable 25,000 Inventories 50,000

1
 S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(2) From the following Balance Sheet, Calculate Current Ratio :-
Liabilities Amount Assets Amount
Share Capital 21,000 Cash 6,000
Reserves 1,000 Sundry Debtors 3,000
Profit and Loss A/c 2,000 Inventories 6,000
Sundry Creditors 4,000 Fixed assets 15,000
Bank Overdraft 2,000
30,000 30,000
(3) From the following data, Compute the Current Ratio :-
Inventories Rs.30,000, Debtors (Good) Rs.27,000, Cash Rs.10,000, Bank
Rs.20,000, Bills Receivable Rs.12,000, Creditors Rs.35,000, Bills Payable
Rs.12,000, Interest Receivable Rs.700, Prepaid Expenses Rs.300, Debenture
Rs.50,000, Provision for Bad Debts Rs.1,500.
(4) Total Assets Rs.2,20,000, Fixed Assets Rs.1,00,000, Capital Employed
Rs.2,00,000. Calculate Current Ratio.
B. LIQUID/ QUICK/ ACID TEST RATIO :-
Liquid Ratio = Liquid Assets
Current Liabilities
Liquid Assets = Current Assets – Stock – Prepaid Expenses
OR
Liquid Assets = Cash + Bank + Debtors (Less Provision) + Bills Receivable + Short
Term Investments + Marketable Securities + Short Term Loan & Advance
(5) From the following Balance Sheet, Calculate Liquid Ratio :-
Liabilities Amount Assets Amount
Sundry Creditors 9,360 Cash at Bank 912
Provision for Taxation 240 Prepaid Expenses 288
10% Debenture 6,000 Sundry Debtors 3,600
Profit and Loss A/c 2,400 Inventories 4,800
Equity Share Capital 9,600 Machinery and Equipment 18,000
960 Shares @ Rs.10 each
27,600 27,600

2
 S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(6) From the following particulars, Compute Current Ratio and Liquid Ratio :
Liquid Assets Rs.37,500, Inventory Rs.5,000, Prepaid Expenses Rs.1,500,
Working Capital Rs.15,000.
(7) Calculate Quick Ratio from the following :-
Working Capital Rs.1,20,000, Total Debts Rs.2,60,000, Long term debts
Rs.2,00,000, Stock Rs.50,000, Prepaid Expenses Rs.10,000.
(8) Calculate the Current Ratio and Acid Test Ratio from the given particulars :
Cash 10,000 Prepaid Expenses 9,000
Debtors 71,000 Plant & Machinery 2,00,000
Short term Investments 20,000 Loose Tools 50,000
Long term Investments 40,000 Creditors 1,00,000
Closing Inventories :- Provision for Taxation 25,000
Raw Materials 1,00,000 Outstanding Expenses 5,000
Finished Products 40,000 1,40,000 Profit & Loss Account 80,000
(9) From the following Balance Sheet of ASC Ltd. as on 30 June 2020
th

Liabilities Amount Assets Amount

Equity Share Capital 1,95,000 Pant & Machinery 1,50,000
Capital Reserve 1,00,000 (-) Depreciation 50,000 1,00,000
12% Bank Loan 60,000 Loose Tools 12,500
Profit and Loss A/c 90,000 Closing Inventory 3,00,000
Reserve for Contingency 50,000 Debtors 1,62,000
Taxation (Current) 30,000 (-) Provision 12,000 1,50,000
Trade Creditors 51,000 Cash 45,000
Outstanding Expenses 7,500 Marketable Securities 30,000
Bank Overdraft 37,500 Income tax paid in advance 15,000
22,500

3
 Dividend Payable 54,000 Share issue Expenditure
6,75,000 6,75,000

Calculate Liquidity Ratio.

(10) Total Current Liabilities of ASC Ltd. Rs.7,00,000 and Acid Test Ratio is 2 : 1.
Inventory is Rs.6,00,000. Find out Current Assets and Current Ratio.
(11) AB Ltd. has a Current Ratio of 4.5 :1 and Quick Ratio of 3 :1. If its Inventory
is Rs.72,000. Find out its Total Current Assets and Total Current Liabilities.
(12) Current Ratio 2.5, Working Capital Rs.60,000. Calculate the amount of Current Assets and
Current Liabilities.
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(13) Current Liabilities of a Company are Rs.40,000, Its Current Ratio is 2 :1 and
Liquid Ratio is 0.5 : 1, Calculate Inventory.
(14) Calculate Current Ratio from the following :
Working Capital Rs.90,000; Total Debts Rs.2,00,000 and Long-term Debts
Rs.1,40,000.
(15) Calculate Current Ratio from the following :
Working Capital Rs.3,00,000; Trade Payable Rs.90,000 and other Current Liabilities Rs.10,000.
II – Solvency Ratio
(A) Debt to Equity Ratio :-
Debt to Equity Ratio = Long Term Debts
Shareholders’ Fund
Long term loans refer to long term obligations which have to be paid after 1 year
Long Term Loans = Debentures + Mortgage Loan + Bank Loan + Loan from financial
institution + Public Deposit
Shareholders’ Funds = Equity Share Capital + Preference Share Capital + Share Premium
+ Capital Reserve + General Reserve + Other Reserves + Profit and
Loss A/c (Credit Balance) – Accumulated Losses – Fictitious Assets
OR
Shareholders’ Fund = Total Assets – Total debt
Or
Shareholders’ Fund = Capital employed – Long term debt + Non Trading assets like Investment.
(16) Calculate Debt equity Ratio From the following :-
10,000 Preference Shares of Rs.10 each 1,00,000

4
 5,000 Equity Shares of Rs.20 each 1,00,000
Sundry Creditors 34,000
Debentures 2,20,000
Profit and Loss A/c (Cr.) 70,000
(17) Compute Debt Equity Ratio from the following :-
2,000 Equity Share of Rs.20 each 40,000
General Reserve 10,000
Debentures 60,000
Outstanding Expenses 8,000
Accumulated Profit 15,000
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(18) Compute Debt Equity Ratio from the following :-

Total Debts Rs.3,00,000
Total Assets Rs.5,40,000
Current Liabilities Rs. 70,000
(19) Calculate Debt Equity Ratio from the following :-
Paid up Share Capital Rs.50,000
Debentures Rs.30,000
Current Assets Rs.10,000
Current Liabilities Rs. 3,000
Net Profit Rs.15,000
Preliminary Expenses Rs. 5,000
(20) Find the relationship between Debt and Owner’s Funds from the following :-
13% Preference Shares Rs.20,000
Equity Shares @ Rs.10 each Rs.34,000
15% Debentures Rs.15,000
Long term Loan from Bank of India Rs.50,000
General Reserve Rs.16,000
Profit and Loss Account (Dr.) Rs. 8,000
Preliminary Expenses Rs. 2,000
(21) Debt Equity Ratio = 1:5
Total Assets = Rs.1,00,000
Total Debts = Rs.75,000
Calculate Current Liabilities.
(B) Total Assets to Debts Ratio :-

5
 (22) Calculate Total Assets to Debts Ratio :-
17% Debentures Rs.2,00,000
Plant and Machinery Rs.1,10,000
Furniture Rs. 50,000
Cash Rs. 35,000
Creditors Rs. 20,000
Debtors Rs. 25,000
Bills Payable Rs. 30,000
Bills Receivable Rs. 15,000
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(23) Calculate Total Assets to Debts Ratio from the following particulars :-
Land and Building Rs.1,50,000 Outstanding expenses Rs. 2,000
Live Stock Rs. 60,000 Creditors Rs. 37,000
Cash Rs. 50,000 Bank Loan (5 Years) Rs. 95,000
Debtors Rs. 65,000 8% Debentures Rs.1,75,000
Preliminary Expenses Rs. 5,000 Share Capital Rs.3,00,000
(24) From the following Balance Sheet, Calculate Total Assets to Debt Ratio
Liabilities Amount Assets Amount
Equity Share Capital 1,00,000 Pant & Machinery 1,25,000
8% Pref. Share Capital 90,000 Profit & Loss Account 30,000
7% Debentures 85,000 Debtors 65,000
Loan from Financial Institution 95,000 Bills Receivable 30,000
Reserves 50,000 Bank 75,000
Creditors 35,000 Motor Car 1,10,000
Outstanding Expenses 5,000 Preliminary Expenses 25,000
4,60,000 4,60,000
(25) Compute Total Assets to Debt Ratio :-
Capital Employed Rs.7,40,000
Investments Rs. 35,000
Land Rs.3,00,000
Debtors Rs. 75,000
Cash Rs. 50,000
Share Capital Rs.3,50,000
Debentures Rs.1,00,000

6
 Capital Reserve Rs. 80,000
Profit and Loss Account (Dr.) Rs. 10,000
(26) Compute Total Assets to Debt Ratio from the following :-
Total Assets Rs.3,00,000
(Excluding Preliminary Expenses Rs.10,000; Profit and Loss (Dr.) Rs.25,000)
Total Debts Rs.3,20,000
Creditors Rs. 30,000
Bank Loan (7 Months) Rs 15,000
Outstanding Expenses Rs. 7,000
Bills Payable Rs. 12,000
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(C) PROPRIETARY RATIO :-
Proprietary Ratio = Shareholder’s Funds
Total Assets
(27) Compute Proprietary Ratio from the following :
Equity Share Capital Rs.5,00,000 Fixed Assets Rs.7,00,000
Preference Share Capital Rs.2,70,000 Investments Rs.2,45,000
Reserves and Surplus Rs. 65,000 Current AssetsRs.3,00,000
Creditors Rs.1,10,000 Debentures Rs.3,00,000
(28) Following is the Balance Sheet of ABC Ltd. As on 31st March 2021
Liabilities Amount Assets Amount
8% Debentures 1,50,000 Fixed Assets 9,00,000
13% Pref. Share Capital 2,00,000 (-) Depreciation 1,00,000 8,00,000
Equity Share Capital 5,00,000 Bank 55,000
Sundry Creditors 25,000 Cash 13,000
Bills Payable 33,000 Investments 1,10,000
Outstanding Expenses 20,000 Debtors 66,000
Reserve Fund 1,00,000 Stock 24,000
Profit and Loss Account 40,000
10,68,000 10,68,000
Calculate Proprietary Ratio.
(29) Compute Proprietary Ratio :-
Share Capital Rs.2,00,000
Current Assets Rs. 59,000
Building Rs.1,75,000
Machinery Rs. 80,000

7
 Cash at Bank Rs. 25,000
General Reserve Rs. 77,000
Preliminary Expenses Rs. 3,000
Deferred Revenue expenses Rs. 20,000
(30) Compute Proprietary Ratio :-
Total Assets Rs.10,50,000
Share Capital Rs. 6,70,000
Bank Loan Rs. 3,00,000
Profit and Loss Account (Cr.) Rs. 20,000
Capital Fund Rs. 60,000
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(31) Compute Proprietary Ratio :-

Total Assets Rs.10,00,000
Long term Debt Rs. 5,90,000
Current Liabilities Rs. 1,10,000
III Activities Ratio :-
(A) Inventory Turnover Ratio/Stock Turnover Ratio= Cost of Goods Sold
Average Inventory
Cost of Goods Sold = Opening Stock + Purchases + Wages + Carriage + Other Direct Expenses
– Closing Stock
OR
Cost of Goods Sold = Purchases–Excess of Closing Stock over Opening Stock +Direct Expenses
OR
Cost of Goods Sold = Purchases+Excess of Opening Stock over Closing Stock +Direct Expenses
OR
Cost of Goods Sold = Net Sales - Gross Profit
Average Stock = Opening Stock + Closing Stock
2
(32) Following is the Trading Account of Ramu Ltd.. Calculate Stock Turnover Ratio.
Particulars Amount Particulars Amount
To Opening Stock 20,000 By Sales 1,05,000
To Purchase Less Returns 60,000 (-) Return 5,000 1,00,000
To Carriage 5,000 By Closing Stock 10,000
To Gross Profit 25,000
1,10,000 1,10,000

8
 (33) Calculate Stock Turnover Ratio :-
Stock (Opening) Rs. 25,000
Stock (Closing Stock) Rs. 35,000
Purchases Rs. 70,000
Carriage Inward Rs. 15,000
Sales Rs.1,14,000
(34) Calculate Total Sales, Credit Sales and Inventories from following particulars:
Gross Profit (20% of Sales) Rs.1,05,000
Cash Sales Rs.87,500
Inventory Turn Over Ratio 8 times of cost of Sales
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(35) Calculate Stock Turnover Ratio :-
Opening Stock Rs.46,400
Purchases Rs.3,87,200
Sales Rs.5,12,000
Gross Profit 25% on Sales
(36) Calculate Stock Turnover Ratio :-
Total Sales Rs.40,000 Gross Profit Rs.10,000
Purchases Rs.34,000 Closing Stock Rs.12,000
Excess of Closing Stock over Opening Stock Rs.4,000.
(37) Opening Stock Rs.20,000; Purchases Rs.1,07,725; Direct Expenses Rs.1,000;
Direct Expenses Rs.1,000; Closing Stock Rs.40,000; Administration Expenses
Rs.5,275; Selling & Distribution Expenses Rs.10,000; Sales Rs.2,50,000;
Calculate Stock Turnover Ratio.
(38) From the following particulars, determine the amount of Gross Profit and Sales
Average Stock Rs.1,32,000; Stock turnover 6 times; Selling Price 25% of above cost
(39) Following figures have been extracted from Shubham Mills Ltd.
Stock at the end of year Rs.1,50,000; Stock at the beginning of the year Rs.90,000;
Stock turnover Ratio is 8 times; Selling Price 25% above cost.
Compute the amount of Gross Profit and Sales.
(B) Debtors (or Receivables) Turnover Ratio :-
Debtors Turnover Ratio = Net Credit Sales/ Average Debtors + Average Receivables
OR
= Total Sales/ Average Accounts Receivable

9
 Average Collection period :-
In Days = Days in a year (i.e. 365 or 366)/ Debtors Turnover
In Week = 52/ Debtors Turnover
In Months = 12/ Debtors Turnover
An alternative formula for debt collection period = Average Debtors + Bills Receivable
Credit Sales per day
Credit sales per day = Net Sales of the year/ 365

S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(40) Debtors at the beginning Rs.36,000; Debtors at the end Rs.42,000. Credit Sales
during the year Rs.1,95,000, Calculate Debtors Turnover Ratio.
(41) Total Sales for the year Rs.60,000; Debtors Rs.6,000; Bills Receivable Rs.4,000.
Calculate Debtors Turnover Ratio.
(42) Credit Sales Rs.1,50,000; Debtors turnover Ratio 5 times; Closing Debtors are 3
times in comparison to Opening Debtors. Calculate Opening and Closing Debtors.
(43) Calculate debtors Turnover Ratio :-
Total Sales for the year Rs.2,62,500
Cash Sales 20% of Total Sales
Sales return of Credit Sales Rs.15,000
Opening Debtors Rs.12,000
Closing Debtors Rs.18,000
(44) Calculate Debtors Turnover Ratio :-
Opening Debtors Rs.45,000; Cash Received from Debtors Rs,3,15,000; Closing
Debtors Rs.67,500; Sales return Rs.22,500.

(45) From the following particulars, determine Debtors at the end of year
Credit Sales Rs.2,92,000
Credit Collection period 73 days
Debtors (beginning of the year) Rs.56,800
(46) From the information given below, Find out Average Collection period :-
Net Credit Sales Rs.2,62,800
Debtors Rs.40,000
10
 Bills Receivables Rs.3,200
(C) CREDITORS/ PAYABLE TURNOVER RATIO :-

Creditors Turnover Ratio = Net Credit Purchases/ Average Creditors + Average Payable
OR
Creditors Turnover Ratio = Total Purchases/ Average Account Payable

S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(47) From the following information Calculate the Creditors Turnover Ratio :-
Total Sales Rs.9,00,000
Total Purchases Rs.7,50,000
Cash Purchases Rs.70,000
Cash Sales Rs.6,00,000
Purchase Return (out of Credit Purchases) Rs.20,000
Creditors at the beginning of year Rs.1,00,000
Creditors at the end of year Rs.20,000
(48) From the following information Calculate the Creditors Turnover Ratio :-
Credit Purchases during the year Rs.5,30,000
Purchase Return (out of Cash Purchases) Rs.30,000
Creditors at the beginning of year Rs.90,000
Creditors at the end of year Rs.50,000
Bills Payable at the beginning of year Rs.20,000
Bills Payable at the end of year Rs.40,000
(49) From the following Calculation :-
(i) Creditors Turnover Ratio (ii) Average Collection Period
Purchases Rs.8,80,000
Purchases Return Rs. 30,000
Creditors Rs. 80,000
Bills Payable Rs. 90,000
Bills Receivables Rs .60,000
(D) WORKING CAPITAL TURNOVER RATIO :-
Net Working Capital Turnover Ratio = Net sales/ Net Working Capital
(50) Calculate Net Working Capital Turnover Ratio from the following Data :-

11
 Net Sales Rs.1,40,000
Current Assets Rs. 50,000
Current Liabilities Rs. 10,000
(51) From the following data, calculate Working Capital Turnover Ratio :-
Sales Rs.76,800; Current Assets Rs.62,400; Net Profit Rs.3,60,000; Current Liabilities
Rs.38,400 less than Current Assets, Fixed Assets Rs.60,000.
(52) From the following data, calculate Working Capital Turnover Ratio :-
Cost of Sales Rs.21,000 which is 70% of Net Sales. Current Assets are Rs.3,000 more
than Current Liabilities.
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(53) The following are the summarized from of Trading A/c and Balance Sheet of Shyam
Ltd. For the year ended 31st December 2021 :-
Trading Account
(For the year ended 31st December 2021)
Particulars Amount Particulars Amount
To Opening Stock 27,500 By Sales 2,20,000
To Purchases 1,10,000 (Rs.1,00,000 Credit)
To Direct Expenses 8,800 By Closing Stock 33,000
To Gross Profit 1,06,700
2,53,000 2,53,000
Balance Sheet
(as at 31st December 2021)
Liabilities Amount Assets Amount
Share Capital 1,50,000 Land 2,20,000
Profit and Loss Account 77,000 Stock 33,000
Creditors 1,04,500 Debtors 95,000
Outstanding Expenses 38,500 Cash 22,000
3,70,000 3,70,000
Calculate the following Ratios :-
(i) Current Ratio (ii) Liquid Ratio (iii) Working Capital Ratio (iv) Stock Turnover Ratio
(v) Debtors Turnover Ratio, if debtors in the beginning amount Rs.25,000
(E) FIXED ASSETS TURNOVER RATIO :-
Fixed Assets Turnover Ratio = Net sales/ Net Fixed Assets
Net Sales = Total Sales – Sales Return
Net Fixed assets = Total Fixed assets – Depreciation
(54) From the following data, Compute the Fixed Assets Turnover Ratio :-

12
 Fixed Assets (at cost) Rs.9,00,000; Accumulated Depreciation Rs.2,00,000;
Total Sales Rs.15,40,000; Sales Return Rs.1,40,000.
(55) Calculate Fixed assets Turnover Ratio from the following information :-
Cost of Goods Sold Rs.25,00,000; Gross Profit 20% on Sales
Fixed assets (at cost) Rs.5,00,000; Current Assets Rs.2,00,000
Accumulated Depreciation Rs.1,00,000
(56) From the following data, Compute the Fixed assets Turnover Ratio :-
Cost of Goods Sold Rs.1,50,000; Gross Profit 25% on Cost; Fixed Assets (Net)
Rs.70,000; Accumulated Depreciation Rs.10,000.
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(F) CURRENT ASSETS TURNOVER RATIO :-
Current Assets Turnover Ratio = Net Sales/ Current Assets
(57) Current Assets Rs.4,00,000; Credit Sales Rs.11,50,000; Cash sales Rs.4,00,000;
Sales Return Rs.3,50,000. Calculate Current Assets Turnover Ratio.
(58) Calculate Current Assets Turnover Ratio for the year 2020 and 2021.
2020 2021
Current Assets 9,00,000 14,00,000
Net Sales 72,50,000 80,00,000
(59) Calculate Current Assets Turnover Ratio from the following information :-
Cost of Goods Sold Rs.40,00,000
Gross Profit on Cost 25% on Cost
Current Assets Rs.5,00,000
(60) Capital employed Rs.7,50,000; Working Capital Rs.1,70,000; Cost of Goods sold
Rs.25,00,000; Gross Profit Rs.6,00,000; Total Assets Rs.11,30,000.
Calculate Current assets Turnover Ratio.
(IV) PROFITABILITIES RATIOS :-
(A) Gross Profit Ratio = Gross Profit x 100
Sales
(61) Calculate Gross Profit ratio from the following :-
Sales Rs.1,20,000
Gross Profit Rs. 60,000
Return Inward Rs. 20,000
(62) Calculate Gross Profit ratio from the following :-

13
 Purchases Rs.5,00,000
Credit Sales Rs.4,50,000
Cash Sales 20% of Total Sales
Excess of Closing Stock over Opening Stock Rs.30,000.
(63) Calculate Gross Profit ratio from the following :-
Opening Stock Rs. 50,000 Closing Stock Rs. 75,000
Cash Sales Rs.1,00,000 Credit Sales Rs.1,70,000
Return Outward Rs. 15,000 Purchases Rs.2,90,000
Advertisement Expenses Rs. 30,000 Carriage Inward Rs. 10,000
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(64) Operating Profit Rs.80,000; Office & Administrative Expenses Rs.16,000;Selling &
Distribution expenses Rs.32,000; Interest on Long-term Debts Rs.16,000; Cost of Goods
Sold Rs.5,12,000. Calculate Gross Profit Ratio.
(65) The Gross Profit Ratio Ratio be 25%; Cash Sales Rs.90,000; Credit Sales are 10% of the
Total Sales. Compute Cost Of Goods Sold.
(66) Average Stock Rs.14,000; Stock Turnover Ratio is 5 times; Selling Price is 125% of the
Cost. Calculate Gross Profit Ratio.
(67) Cost of Goods Sold Rs.5,00,000; Cash Sales Rs.3,00,000; Credit Sales Rs.2,75,000;
Administrative expenses Rs.35,000; Profit on Sale of Bike Rs.3,000; Lighting and
Heating Rs.40,000. Calculate Gross Profit Ratio.
(68) Following is the Trading Account of M/s Ruby Enterprises :-
Particulars Amount Particulars Amount
To Opening Stock ? By Sales ?
To Purchases 90,000 By Closing Stock ?
(Less) Return 15,000 75,000
To Carriage Inward 10,000
To Heating & Lighting 3,000
To Gross Profit ?
1,47,000 1,47,000
Additional information :-
(i) Gross Profit is 1/3rd on Sales.
(ii) Stock at the end is Rs.10,000 in excess of Stock in the beginning.
Find the Value of missing figure in the above Trading account.
B. OPERATING RATIO :-

14
 Operating Ratio = Operating Cost & Expenses x 100/ Net Sales
OR
Operating Ratio = Cost of Goods Sold + Operating Expenses x 100/ Net sales
Operating Expenses includes all Administrative Expenses viz. salary, electricity, rent etc. and all
the expenses incurred for Selling and Distribution e.g. Advertising, commission etc. and
excludes Financial Charges like interest, bad debts, sales discount, Provision for tax, Provision
for doubtful debt & other non-recurring expenses like preliminary expenses, donations,
commissions, discount on issue of share etc.

S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(69) Calculate Operating Ratio from the following :-
Sales Rs.20,00,000 Sales Returns Rs. 30,000
Operating expenses Rs. 55,000 Cost of Goods Sold Rs. 1,70,000
(70) From the following income statement of LMN Ltd. Calculate Operating Ratio :-
Trading and Profit and Loss Account
Dr. (for the year ending ………………) Cr.
Particulars Amount Particulars Amount
To Opening Stock 60,000 By Sales 3,00,000
To Purchases 1,40,000 (Less) Return 20,000 2,80,000
To Wages 50,000 By Closing Stock 95,000
To Gross Profit 1,25,000
3,75,000 3,75,000
To Administration Expenses 30,000 By Gross Profit 1,25,000
To Distribution Expenses 35,000 By Profit on Sale of Furniture 3,000
To Net Profit 63,000
1,28,000 1,28,000

(71) Calculate Operating Ratio from the following :-

Purchases Rs.2,00,000
Credit Sales Rs.2,40,000
Excess of Closing Stock over Operating Stock Rs. 25,000
Cash Sales are 25% of Total sales.
(72) Let the Operating Ratio be 60%
Cash Sales Rs.1,70,000
Credit Sales are 15% of Cash Sales
Opening Stock Rs. 30,000
Purchases Rs. 85,000

15
 Closing Stock Rs. 45,000
Office Expenses Rs. 15,000
Calculate the amount of selling expenses.
(73) Opening Stock Rs.30,000 Closing Stock Rs.45,000
Cash Sales Rs.60,000 Credit Sales Rs.50,000
Return Inward Rs.10,000 Purchases Rs.75,000
Carriage Inward Rs. 5,000 Wages & Salaries Rs.30,000
Office Expenses Rs.15,000 Selling Expenses Rs.17,000
Compute Operating Ratio.
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(74) Calculate Gross Profit and Operating Ratio from the following :-
Opening Stock Rs.20,000 Closing Stock Rs.30,000
Gross Profit Rs.29,000 Interest from Securities Rs. 4,000
Loss by theft Rs.13,000 Administration expenses Rs. 9,000
Selling Expenses Rs.12,000 Office Expenses Rs. 6,000
Sales Rs.70,000
(C) NET PROFIT RATIO :-
Net Profit Ratio = Net Profit x 100/ Net Sales
Net Profit = Gross Profit – Indirect Expenses + Indirect Income
Net Sales = Total Sales – Sales Return
Profit before Tax Ratio (PBT) = Profit before tax x 100/ Net Sales
Profit after Tax Ratio (PAT) = Profit after tax x 100/ Net Sales
(75) Calculate Net Profit Ratio from the following :-
Sales Rs.6,30,000
Sales Return Rs. 30,000
Indirect Expenses Rs. 50,000
Cost of Goods Sold Rs.2,50,000
(76) Calculate Net Profit Ratio from the following :-
Sales Rs.22,12,120
Sales Return Rs. 13,100
Gross Profit Rs.10,91,820
Office Expenses Rs. 12,000
Interest Received Rs. 2,600
Distribution Expenses Rs. 24,000
Interest on Bank Loan Rs. 1,200
Loss on sale of Furniture Rs. 600

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 (77) Calculate Profit Ratio of a Company was 30%. Its Credit Sales were Rs.2,50,000 and its
Cash Sales were 80% of the Total Sales. Indirect expenses of the company were
Rs.25,000 and Direct expenses were Rs.10,000.
(D) RETURN ON INVESTMENT ( RETURN ON CAPITAL EMPLOYED) :-
Return on Investment = Profit before Interest, Tax and Dividend x 100
Capital Employed
Capital Employed = Capital employed means the funds used by the business enterprises
to earn Profit before interest, Tax and Dividend. It can be computed by any of the
following methods :-
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
Method 1 :-
Capital employed = Share Capital (both preference and equity) + Reserves & Surplus +
All Long Term Loans - [ Fictitiour Assets ( Miscellaneous
Expenditure) + Non-Trading Investment]
Methods 2 :-
Capital Employed = Fixed Assets (Cost Less Depreciation) + Working Capital
(78) Following is the Balance Sheet of ABC Ltd, as on 31st March 2022 :-
Balance Sheet
(as at 31st December 2021)
Liabilities Amount Assets Amount
Equity Share Capital Fixed Assets (Net) 14,00,000
1,00,000 Shares of Rs.10 each 10,00,000 Current Assets 12,50,000
Reserves 2,50,000 Preliminary Expenses 1,00,000
10% Debenture 5,00,000
Current Liabilities 7,50,000
Profit and Loss Account 2,50,000
27,50,000 3,70,000
Computer Return on Capital Employed Ratio.
(79) Calculate Return on Capital Employed from the figures given below :-
Opening Stock Rs. 1,50,000 Closing Stock Rs. 15,000
Direct Expenses Rs. 35,000 Purchases Rs. 1,46,000
Current Assets Rs. 6,50,000 Current Liabilities Rs. 2,50,000
Fixed Assets Rs.11,00,000 Indirect Expenses Rs. 24,000
Sales Rs. 6,40,000
(80) From the following details, Calculate Return on Investment
Gross Profit Rs.1,80,000
Selling and Distribution Expenses Rs. 65,000

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 8% Debentures Rs.1,00,000
Tax Rs. 15,000
Fixed Assets Rs.4,00,000
Current Assets Rs.1,60,000
Current liabilities Rs.1,20,000
(81) A Company has a Loan of Rs.20,00,000 as part of its Capital Employed. The interest
payable on loan is 15% and the (ROI) of the Company is 25%. The Rate of income tax is
40%. What is the gain to the Shareholders due to the loan raised by the company.
(Note ;- ROI = Return on Investment)
S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7

(E) EARNING PER SHARE (EPS) :-

Earning Per Share = Net Profit after Tax – Preference Dividend
Number of Equity Share
(82) Calculate the Earning per share from the following data :-
50,000 Equity Shares of Rs.10 each Rs.5,00,000
10% Preference Share Capital Rs.1,00,000
9% Debenture Rs.2,00,000
Net Profit after tax Rs.1,10,000
(83) Calculate the Earning per share from the following data :-
Net Profit before tax Rs.2,00,000
Taxation 50% of Net Profit
20% Preference Share Capital Rs. 75,000
10,000 Equity Share of Rs.10 each Rs.1,00,000
(84) Net Profit before Interest and tax Rs.1,00,000. Equity Share Capital (15,000 Shares of
Rs.10 each) Rs.1,50,000, 10% Preference Share Capital Rs.40,000, 10% Debentures
Rs.1,00,000 Tax Rate 50%. Calculate Earning Per Share.
(85) Calculate Earning Per Share from the following information :-
Equity share Capital (Rs.100 per share) Rs.8,00,000
Reserves Rs.2,00,000
12% Preference Share Capital Rs.2,00,000
10% Debentures Rs.3,00,000
Net Profit after payment of tax Rs.1,20,000
(F) DIVIDEND PER SHARE (DPS) :-
Dividend Per Share = Total Dividend paid to equity Shareholders

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 Number of Equity Shares
(86) Net Profit after interest and tax Rs.12,00,000 profit distributed as dividend 30% Equity Shares
Capital, 20,000 Equity Shares (Rs.100 per share) Rs.20,00,000. Calculate Dividend per share.
(87) From the following information Compute Dividend per share :-
(i) Profit before tax Rs.10,00,000
(ii) Tax rate 40%
(iii) Equity shares 40,000 shares of Rs.100 each.
(iv) 10% of the profit is retained by the company & remaining is distributed s dividend.

S.Kumar’s Phone 9334117626, 9431494348

ASC COMMERCE CAREER

(i) DC-2, 1st Floor, East of Kankarbagh Tempo Stand, Patna 20
(ii) Ambika Colony, Gas Godam Gali, East of Krishna Niketan School, Jakariyapur, Patna 7
(88) The Capital of MDH Ltd. is follows :-
9% Preference Shares of Rs.10 each Rs.5,00,000
Equity Shares of Rs.100 each Rs.6,00,000
Profit after tax at 60% p.a. Rs.2,70,000
Equity Dividend Paid Rs.1,20,000
Calculate Dividend Per Share.
(89) The following information is available from the books of X Ltd. for the year ended 31 st March 2022
Profit before tax Rs.21,00,000
Tax Rate 30%
Proposed Dividend 20% of paid up Capital
Equity Share Capital 20,000 Shares of Rs.100 each (Rs.90 paid up)
(G) PRICE EARNING RATIO :-
Price Earning Ratio = Market Price Per Share
Earning Per Share
(90) Earning Per Share Rs.150. Market Price Per Share Rs.3,000. Calculate Price Earning Ratio.
(91) Earning Per Share Rs.50 and Market Price Per Share Rs.200. Calculate Price Earning Ratio.
(92) Calculate Price Earning Ratio from the following :-
20,000 Equity Share Capital of Rs. 100 each Rs.20,00,000
Reserves and Surplus Rs. 2,50,000
10% Debentures Rs.10,00,000
20% Unsecured Loan Rs. 6,75,000
Operating Profit Rs.12,00,000
Market Price per share Rs.60; Income Tax Rate 50%
(93) Calculate Price Earning Ratio from the following :-
25,000 Equity Share Capital of Rs. 10 each Rs.2,50,000
Reserves (including Current Year Profit) Rs.1,00,000

19
 10% Preference Share Capital Rs.2,50,000
9% Debentures Rs.2,00,000
Profit before Interest Rs.3,30,000
Market Price per share Rs.50; Income Tax Rate 50%
Earning Yield = Earning Per Share
Market Price Per Share
(94) From the following information. Calculate Earning Yield
Earning Per Share Rs.50 Market Price Per Share Rs.10
(95) From the following calculate Market price per share
Earning Yield Rs.6 Earning per Share Rs.72

20