Financial Statements

Ratios

Hard

Financial Statements

Calculate current assets of a company from the following information:

Inventory turnover ratio = 4 times

Inventory at the end is Rs. 20,000 more than the inventory in the beginning. Revenue from Operations Rs. 3,00,000 and gross profit ratio is 20% of revenue from operations.

Current liabilities = Rs. 40,000

Quick ratio = 0.75 : 1

Rs. 1,20,000

Rs. 30,000

Rs. 70,000

Rs. 1,00,000

✅ Correct Option: 4

Cost of revenue from operations $= 3{,}00{,}000 \times 80\% = 2{,}40{,}000$ .

Average inventory $= 2{,}40{,}000/4 = 60{,}000$ . With closing $=$ opening $+20{,}000$ , opening $=50{,}000$ and closing $=70{,}000$ .

Quick assets $= 0.75 \times 40{,}000 = 30{,}000$ .

Current assets $= 30{,}000 + 70{,}000 = 1{,}00{,}000$ .

2026: 11 May Shift 1

ABC Ltd has an average inventory of Rs. 20,000 at cost. If the Inventory Turnover Ratio is 8 times and the firm sells goods at a gross profit of 20% on sales. Calculate the gross profit of ABC Ltd.

2026: 13 May Shift 2

The higher current ratio is not a symbol of strength of a firm, rather it is the sign of:

2024

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

2022: 8 Aug Shift 2

Debt-equity ratio is a sub-part of:

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:

2022: 8 Aug Shift 2

What is gross profit ratio?

Gross sales Rs. 7,60,000

Sales returns Rs. 40,000

Net Profit after interest Rs. 40,000

Indirect expenses Rs. 60,000

Interest paid on debentures Rs. 20,000

Solution

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