Financial Statements

Ratios

Medium

Which of the following transaction will increase Current Ratio but will decrease Debt Equity Ratio?

Issue of Equity shares for cash

Redemption of 9% preference shares

Issue of debentures for consideration other than cash

Issue of debentures for cash

✅ Correct Option: 1

Issue of equity shares for cash increases current assets (cash) without changing current liabilities, so Current Ratio rises. It also raises shareholders' equity while debt stays constant, so Debt Equity Ratio falls. Redemption of preference shares and issue of debentures either reduce CR or raise DE ratio, so they do not satisfy both conditions.

2024

Calculate Trade Payables Turnover Ratio.

2026: 6 June Shift 1

A trading firm's average inventory is Rs. 40,000. If the inventory turnover ratio is 6 times and the firm sells goods at a gross profit of 25% on sales, ascertain the gross profit of the firm.

2025: 13 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Liquidity Ratios	(I) Debt to Capital Employed Ratio
(B) Solvency Ratios	(II) Net profit ratio
(C) Activity Ratios	(III) Current Ratio
(D) Profitability Ratios	(IV) Working capital Turnover Ratio

Choose the correct answer from the options given below:

2025: 3 June Shift 2

Compute Earning per share from following information

Net profit after tax but before dividend	1,75,000
Equity shares of Rs. 10 each	Rs. 7,00,000
Dividend declared @15%
Market price of a share	Rs.13

2022: 23 Aug Shift 2

If there is Revenue from Operation Rs. 1,20,000 and gross profit is 20% of cost, then the amount of gross profit will be :

2024

Trade Receivables Turnover Ratio and Trade Payables Turnover Ratio are categorised as:

Which of the following transaction will increase Current Ratio but will decrease Debt Equity Ratio?

Solution

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