Financial Statements

Ratios

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Financial Statements

Calculate the Current Ratio from the following information:

Particulars (Rs.)
Inventories 50,000
Trade receivables 50,000
Advance tax 4,000
Cash and cash equivalant 30,000
Trade payables 1,00,000
Short-term borrowings (bank overdraft) 4,000

Particulars	(Rs.)
Inventories	50,000
Trade receivables	50,000
Advance tax	4,000
Cash and cash equivalant	30,000
Trade payables	1,00,000
Short-term borrowings (bank overdraft)	4,000

1.24:1

1.33:1

1.29:1

1.19:1

✅ Correct Option: 3

Current Ratio measures the relationship between current assets and current liabilities.

Formula: Current Ratio = $\frac{\text{Current Assets}}{\text{Current Liabilities}}$

Calculation of Current Assets:

Inventories + Trade receivables + Advance tax + Cash and cash equivalent

= 50,000 + 50,000 + 4,000 + 30,000 = Rs. 1,34,000

Note: Advance tax is a current asset as it represents a payment made in advance that will be adjusted against tax liability.

Calculation of Current Liabilities:

Trade payables + Short-term borrowings (bank overdraft)

= 1,00,000 + 4,000 = Rs. 1,04,000

Current Ratio:

= $\frac{1,34,000}{1,04,000}$ = 1.288 = 1.29:1 (rounded to two decimal places)

2025: 14 May Shift 1

The _________ may indicate that the firm is experiencing stockouts and lost sales.

2022: 23 Aug Shift 2

The ideal Debt Equity Ratio is :

2025: 3 June Shift 2

To assess the long term solvency of the business, which of the following ratios are needed?

(A) Interest coverage ratio

(B) Proprietary ratio

(D) Debt to capital employed ratio

Choose the correct answer from the options given below:

2026: 21 May Shift 1

Total Revenue from Operations Rs. 1,00,000

Total Purchases Rs. 75,000

Carriage Inwards Rs. 2,000, Salaries Rs. 25,000, Decrease in Inventory Rs. 10,000, Return Outwards Rs. 2,000, and Wages 5,000. The Gross Profit ratio will be:

2023: 29 May Shift 2

Every company analyse its earning capacity of the business which is outcome of utilisation of resources employed in the business. To analyse profitability company can use:

A. Dividend Payout Ratio

B. Return on Net Worth

C. Gross Profit Ratio

D. Quick Ratio

E. Inventory Turnover Ratio

Choose the choose answer from the option given below:

2023: 28 May Shift 1

Net Capital Employed is equal to :

(A) Fixed Assets + Current Assets - Long term liabilities

(B) Non current Assets + Current Assets - Current liabilities

(D) Equity + Debt

(E) Current Assets - Current liabilities

Choose the correct answer from the options given below :

Calculate the Current Ratio from the following information: Particulars(Rs.)Inventories50,000Trade receivables50,000Advance tax4,000Cash and cash equivalant30,000Trade payables1,00,000Short-term borrowings (bank overdraft)4,000

Solution

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CUET Accountancy Past Year Questions (Topic-Wise)

Calculate the Current Ratio from the following information:

Particulars (Rs.)
Inventories 50,000
Trade receivables 50,000
Advance tax 4,000
Cash and cash equivalant 30,000
Trade payables 1,00,000
Short-term borrowings (bank overdraft) 4,000