Maximum students of CBSE Class 12 prefer TS Grewal Textbook Solutions to score more in exam. current assets – current liabilities. Ans. From the data calculate : (i) Gross Profit Ratio (ii) Net Profit Ratio (iii) Return on Total Assets. Ratio analysis is the comparison of line items in the financial statements of a business. (i)A business has a current ratio of 3 : 1 and quick ratio of 1.2 : 1. (ii) From the given information calculate the inventory turnover ratio. The chapter gives detailed information on ratio analysis, the objective of ratio analysis, advantages of ratio analysis, limitations of ratio analysis and types of ratios. 29,000; Closing Stock Rs. (f)Other current assets (prepaid expenses, interest receivable, etc.) Following information is extracted from the statement of profit and loss of gold coin Ltd. for the year ended 31st March, 2015: Prepare a comparative statement of profit and loss. shareholders’ funds. 10.The debt-equity ratio of a company is 0.8:1. Ans. 30.The quick ratio of a company is 1.5 : 1. Calculate individual partner’s gain or sacrifice due to change in ratio. MP Board Class 12th Accountancy Important Questions Chapter 10 Analysis of Accounting Ratios Analysis of Accounting Ratios Important Questions. Issued equity shares to the vendors of machinery purchased for Rs. Sales – Gross Profit 1,00,000 less than revenue from operations, operating expenses Rs. (e)Short-term loans and advances (iv) Issue of bonus shares Generally, the ratio of 2 : 1 is considered as an ideal. Ans. Answer. State with reason whether the decrease in rent received by Rs 15,000 will increase, decrease or not change the ratio. The quick ratio of a company is 1.5 : 1. Stock turnover ratio of a concern is 6 times. (d)Cash and cash equivalents (cash in hand, cash at bank, cheques/drafts in hand) Answer: A relationship between various accounting figures, which are connected with each other, expressed in mathematical terms, is called accounting ratios. (All India 2012) (Delhi 2009) Ans. State with reason which of the following 15.On the basis of the following information, calculate 24.From the following information, calculate the following ratios 3 6. 34.From the following information, calculate any two of the following ratios State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company. 5,000. Ans.Operating Profit Ratio = 100 – Operating Ratio (i)Purchase, of machinery for cash myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. NCERT Solutions, NCERT Exemplars, Revison Notes, Free Videos, CBSE Papers, MCQ Tests & more. Ans. Non-current Asset (Tangible assets + Intangible assets + Non-current trade investments + Long-term loans and advances) + Working Capital – Non-current Liabilities (Long-term borrowings + Long-term provisions) 1.Liquidity Ratios Liquidity ratios measure the firm’s ability to fulfil its short-term financial obligations. It indicates the ability of a business firm to meet its long term liabilities. (a)Fixed assets (tangible fixed assets, intangible fixed assets). (c)Long-term loans and advances. 6.The gross profit ratio of a company is 50%. Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. When Assets Approach is Followed It is computed by adding 31,000; Sales Rs. Calculate. 5.What will be the operating profit ratio, if operating ratio is 88.34%? 2 times c. 6 times d. 8 times. (ii)Purchase of goods on credit (iii) Sale of furniture at cost myCBSEguide | CBSE Papers & NCERT Solutions. (ii)Purchase of goods on credit (i)Liquid ratio (All India 2009; HOTS) share capital, reserves and surplus). Reason Cash received from debtors will not change the quick assets because the quick assets are increased and decreased with the same amount, and the current liabilities remain unchanged. (b)Non-current liabilities (i.e. 7,000, closing inventory Rs. (i)Debt equity ratio (ii) Working capital turnover ratio long-term borrowings and long-term provisions). myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. net sales. We have taken care of every single concept given in CBSE Class 12 Accountancy syllabus and questions are framed as per the latest marking scheme and blue print issued by CBSE for class 12. Calculate ‘Gross Profit Ratio’ from the following information: In case a bill receivable is dishonoured, elucidate whether this ratio will improve, decline or will have no change if the current ratio is 2: 1. Ans. State with reason which of the following transaction would increase, decrease or not change the ratio  Ans. Revenue from operations (Sales) Rs 2,00,000, gross profit 25% on cost, inventory at the beginning is 1/3 of the inventory at the end which was 30% of sales. Ans. Ratio analysis is the more popularly and widely used technique of financial statement analysis. Effect No change Therefore, the current ratio will increase. Effect Reduce Items Included in Long-term Debts Also, if credit sales are not specified, then total sales will be deemed to be on credit. (v)Redemption of debentures at a premium (All India 2011) What are liquidity ratios? Ratio It is an arithmetical expression of relationship between two related or interdependent items. (i)Non-current assets, i.e. If properly analysed, the ratios make us understand various problem areas as well as the (iii)Cash and cash equivalents. (iii) Sale of furniture at cost Net Credit Purchases = Credit Purchases – Purchase Return. Ans. Calculate quick assets and current assets. Here,it is assumed that premium payable on redemption of debenture is written-off through existing securities premium. Ans. Reason As there is a simultaneous increase and decrease it will not affect the value of current asset. Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of goods on credit. (iv)Short-term loans and advances. (iii)Operating ratio Operating ratio establishes the relationship between operating cost and revenue from operations i.e. Long Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 5. Ans. 8.Quick ratio of a company is 1.5:1. NCERT Solutions for Class 12-commerce Accountancy CBSE, accountancy-company-accounts-and-analysis-of-financial-statements. Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs. Ans. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. (i) Operating profit ratio; and (if) Working capital turnover ratio Effect Increase It is also used to identify the positives or strengths of a firm. Activity Ratio Analysis – Classification of Ratios – Question 3 Calculate the value of opening Inventory from the following information: Cost of revenue from operations is 16000 and Inventory turnover ratio is 1 Times. Reason Shareholders’ funds are increased by the issue of new shares for cash, but the long-term debts remain unchanged. NCERT Solutions for Class 6, 7, 8, 9, 10, 11 and 12, Classification of Accounting Ratios Calculate the gross profit ratio. (iv)Sale of goods at a profit The entire NCERT textbook questions have been solved by best teachers for you. In case a bill receivable is dishonoured, the current ratio will have no change because it would not affect either, assets or current liabilities. Inventories of Finished Goods, Work-in-progress and Stock-in-trade + Direct Expenses NOTE Since,non-operating assets are excluded while determining capital employed, income from non-operating assets should also be excluded from profit. (iv)Sale of goods at a profit Effect Reduce 1.Liquidity Ratios Liquidity ratios measure the firm’s ability to fulfil its short-term financial obligations. Office expenses, administrative expenses, selling and distribution expenses, employees benefit expenses, depreciation and amortisation expenses. Ans.Operating Profit Ratio = 100 – Operating Ratio (iv)Interest coverage ratio This ratio expresses the relationship between net profit before interest and tax and interest payable on long-term debts. 13.From the following information, calculate any two of the following ratios (ii)Working capital, i.e. (a)Shareholders’ funds (i.e. There are two types of liquidity ratios: 1. 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