The following financial information of a company is given as:

Required:

1. Current liabilities
2. Liquid ratio
3. Debt-Equity ratio
4. Fixed Assets Turnover Ratio
5. Return on Equity
6. Return on Capital Employed
7. Inventory turnover ratio

Ans: (a) Rs. 40,000 (b) 1:1 (c) 41.18% (d) 1.5 time (e) 17.65% (f) 13.64% (g) 15 times

The following information of a company are given as:

Required:

1. Current Assets
2. Fixed Assets
3. Shareholders equity
4. Liquid Ratio
5. Return on Fixed Assets
6. Debt equity ratio
7. Days sales outstanding if debtors is Rs. 60,000

Ans: (a) Rs. 2,50,000 (b) 3,00,000 (c) 3,00,000 (d) 2 times (e) 11.43% (f) 100% (g) 27 days

The following information of a company are given as:

Required:

1. Days sales outstanding
2. Quick ratio
3. Return on assets
4. Gross profit ratio
5. Net profit ratio
6. Common stock
7. Return on equity

Ans: (a) 50 Days (b) 11.76% (c) 6,80,000 (d) 15 % (e) 10% (f) 3,00,000 (g) 21.05%

The following information of a company are given as:

Required:

1. Current liabilities
2. Liquid ratio
3. Net profit ratio
4. Inventory turnover ratio
5. Return on Assets
6. Return on common equity
7. Debt equity ratio

Ans: (a) Rs. 2,00,000 (b) 1.75 times (c) 12.5% (d) 16 times (e) 11.11% (f) 20% (g) 80%

If cost of goods sold is Rs. 4,20,000 and average inventory is Rs. 70,000. Calculate inventory turnover ratio.

Using the following information complete the balance sheet.

1. Long term debt to Net worth (equity) ratio => 0.5 times
2. Total assets turnover ratio => 2.5 times
3. Days sales outstanding (DSO) => 18 days
4. Inventory turnover ratio => 9 times
5. Gross profit margin => 10%
6. Quick ratio => 1:1

Balance Sheet

Ans: Cash Rs. 50,000, A/R Rs. 50,000, Inventory Rs. 1,00,000, PPE Rs. 2,00,000, LTD Rs. 1,00,000, B/S Total Rs. 4,00,000

The year end balance sheet of Nepal trading company is provided below.

Sales for the year were Rs. 3,00,000 all of which were sold on credit.

Gross profit margin was 20%. Assume 360 days in a year.

Required:

1. Inventory turnover ratio and its interpretation
2. Receivable turnover ratio and its interpretation
3. Days sales outstanding and its interpretation
4. Fixed assets turnover ratio and and its interpretation

Ans: (a) 15 times (b) 30 times (c) 12 days (d) 2.5 times

Following Balance Sheet of a company is given as

Other Information:

1. Current assets includes Rs. 80,000 for inventory and Rs. 20,000 for cash.
2. Net profit: Rs. 1,20,000
3. Sales: Rs. 18,00,000

Required:

1. Liquid ratio
2. Debt-equity ratio
3. Inventory turnover ratio
4. Fixed assets turnover ratio
5. Return on total assets
6. Return on equity
7. Net profit ratio
8. Amount of gross profit. (if gross profit margin is 40%)

Ans: (a) 3.7:1 (b) 40% (c) 22.5 times (d) 3 times (e) 11.43% (1) 16% (g) 6.67% (h) Rs. 7,20,000