Financial Statements

Ratios

Easy

Read the passage carefully and answer the next five questions (value in fraction is to be rounded off to the nearest value):

Particulars	Amount (Rs.)
Revenue from operations	8,75,000
Creditors	90,000
Bills receivable	48,000
Bills payable	52,000
Purchases	4,20,000
Trade debtors	59,000

Trade Receivable Turnover Ratio is-

8 times

8.18 times

8.78 times

9 times

✅ Correct Option: 2

Trade Receivables include both Trade Debtors and Bills Receivable.

Trade Receivables = Trade Debtors + Bills Receivable

Trade Receivables = 59,000 + 48,000 = Rs. 1,07,000

The formula for Trade Receivable Turnover Ratio is:

$\text{Trade Receivable Turnover Ratio} = \frac{\text{Net Credit Revenue from Operations}}{\text{Average Trade Receivables}}$

Since only the closing balance of trade receivables is given, we use it as the average trade receivables.

Trade Receivable Turnover Ratio = $\frac{8,75,000}{1,07,000}$

Trade Receivable Turnover Ratio = 8.18 times

The revenue from operations is assumed to be credit sales as no cash sales information is provided. Bills Receivable represent amounts receivable from customers, similar to trade debtors, and both form part of trade receivables when calculating this ratio.

2025: 15 May Shift 1

X Ltd. has a current ratio of 3:1 and quick ratio of 2:1. If excess of current assets over quick assets, represented by inventories is Rs. 5,000, calculate current assets and quick assets.

2026: 29 May Shift 2

Revenue from Operations: Cash Rs. 25,000 and Credit Rs. 75,000

Purchases : Cash Rs. 15,000 and Credit Rs. 60,000

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: 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 :

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

2023: 11 June Shift 3

What will be Interest Coverage Ratio, when 20% Long term Debt is Rs. 10,00,000, Tax Rate 40% and Net profit After Tax is Rs. 6,00,000.

2025: 13 May Shift 2

Calulate Current Ratio from the following information:

Particulars (Rs.)	Amount (in Rs)
Inventories	60,000
Trade receivables	60,000
Advance tax	4,000
Cash and cash equivalents	50,000
Trade payables	1,30,000
Bank Overdraft	4,000

Trade Receivable Turnover Ratio is-

Solution

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