Accounting Ratios

1. On the basis of the following information calculate the current ratio.

Particulars Amount

Inventory 2,00,000

Trade Receivables 3,00,000

Prepaid Expenses 1,50,00

Current Investment 80,000

Advanced Tax 70,000

Bank Overdraft 30,000

Trade Payables 1,50,000

Other Current Liabilities 20,000

a. 6:3
b. 4:1
c. 5:4
d. None of these

2. On the basis of the following information calculate the Quick ratio:

Particulars Amount

Inventory 22,000

Trade Receivables 45,000

Prepaid Expenses 56,000

Current Investment 53,000

Advanced Tax 44,000

 Bank Overdraft 30,000

Unearned Revenue 25,000

Provision for Tax 15,000

a. 4.45 : 3
b. 2.45 : 1
c. 5:4
d. None of the above

3. On the basis of the following information calculate the liquidity ratio:

Particulars Amount

Inventory 1,29,000

Trade Receivables 2,12,000

Current Investment 28,000

Prepaid Expenses 45,000

Advanced Tax 60,000

Bank Overdraft 60,000

Unearned Revenue 45,000

Short Term Borrowings 95,000

a. 5:4
b. 3.2 : 3
c. 1.2 : 1
d. None of the above

4. From the following information compute the current ratio.

 Particulars Amount

Working Capital 12,00,000

Total Debt 4,45,000

Long Term Debt 1,45,00

a. 6 :2
b. 5 :1
c. 8 :3
d. None of the above

5. From the following information compute the current ratio.

Particulars Amount

Working Capital 72,00,000

Trade Payables 14,00,000

Other Current Liabilities 4,00,000

a. 10 :3
b. 5 :1
c. 20 :7
d. None of the above

6. From the following information compute the current ratio.

Particulars Amount

Working Capital 6,00,000

Current Assets 16,00,000

Inventory 4,50,000

a. 14.4 :4
 b. 4.8 :2
c. 1.6 :1
d. None of the above

7. A firm had current assets of RS. 525000, it then paid a current liability of RS. 125000.
After this payment the current ratio was 5 : 4. Determine the current liabilities and
working capital Before the payment.

a. Current liabilities 400000 and Working capital 320000

b. Current liabilities 445000 and Working capital 80000
c. Current liabilities 40000 and Current liabilities 60000
d. None of the above

8. A firm had current assets of RS. 875000, it then paid a current liability of RS. 105000.
After this payment the current ratio was 11 : 9. Determine the current liabilities and
working capital after the payment.

a. Current liabilities 40000 and Current liabilities 60000

b. Current liabilities 770000 and Working capital 630000
c. Current liabilities 630000 and Working capital 140000
d. None of the above

9. Calculate Inventory turnover ratio from the following information.

Particulars Amount

Gross Profit Ratio 10%

Cash Sales 2,00,000

Credit Sales 2,00,000

Return Inwards 50,000

Opening inventory 30,000

Closing inventory 33,000

a. 10 Times
b. 11 Times
 c. 5 Times
d. None of the above

10. Calculate Inventory turnover ratio and average age of inventory from the following
information:

Particulars Amount

Gross Profit Ratio 50%

Cash Sales -

Credit Sales 2,00,000

Return Inwards 1,04,000

Opening inventory 60,000

Closing inventory 60,000

a. 1.8 Times and 455 Days

b. 0.8 Times and 450 Days
c. 1.6 Times and 440 Days
d. None of the above

11. Calculate Inventory turnover ratio from the following information:

Particulars Amount

Cost of revenue from operations 2,00,000

Purchases 2,50,000

Direct expenses 50,000

Opening inventory 1,50,000

a. 1 Times
b. 2 Times
c. 3 Times
 d. None of the above

12. Calculate Inventory turnover ratio from the following information:

Particulars Amount

Gross Profit Ratio 60%

Credit Sales 4,00,000

Cash Sales 10,00,000

Purchases 8,40,000

Opening inventory 3,00,000

a. 8.5 Times
b. 7.5 Times
c. 3.5 Times
d. None of the above

13. Calculate Inventory turnover ratio from the following information:

Particulars Amount

Gross Profit -20%

Revenue from operations 5,00,000

Purchases 5,50,000

Carriage inwards 30,000

Carriage outwards 15,000

Opening inventory 70,000

a. 12 Times
b. 9 Times
c. 10 Times
 d. None of the above

14. Calculate Inventory turnover ratio from the following information: Gross profit ratio
is 60 % Of cost and revenue from operation is RS. 2100000 . Opening inventory was
2/3rd of closing inventory and closing inventory was 25 % of revenue from operation.

a. 3 Times
b. 6 Times
c. 5 Times
d. None of the above

15. Cost of revenue from operations is 22,00,000, Inventory turnover ratio is 2 Times and
opening inventory is 112000 less than the closing inventory. Calculate the value of
opening Inventory.

a. 1042000
b. 1049000
c. 1044000
d. 2088000

16. Cost of revenue from operations is 250000, Inventory turnover ratio is 2 times and
opening inventory is 0.5 times More than the closing inventory. Calculate the value of
opening Inventory.

a. 62500
b. 100000
c. 150000
d. None of the above

17. From the following information, calculate fixed assets turnover ratio:

Particulars Amount
 Long term borrowings 1,00,000

Trade receivables 50,000

Plant 12,00,000

Building 5,00,000

Equipments 3,00,000
Revenue from the operations for the year was RS. 9000000.

a. 7.5 Times
b. 4.5 Times
c. 2.5 Times
d. None of the above

18. From the following information calculate the working capital turnover ratio:

Particulars Amount

Inventory 1,50,000

Bank 1,75,000

Trade receivables 1,00,000

Trade payables 1,20,000

Short term borrowings 1,60,000

Land 4,00,000

Plant 2,00,000
Revenue from the operation for the year was RS. 2175000.

a. 15 Times
b. 17 Times
c. 45 Times
d. None of the above
19. From the following information calculate the Current assets turnover ratio:

Particulars Amount

Inventory 1,22,000

Bank 2,28,000

Trade receivables 2,50,000

Bills payables 1,80,000

Salary outstanding 1,30,000

Land 6,00,000

Goodwill 2,00,000
Revenue from the operation for the year was RS. 48,00,000.

a. 24 Times
b. 10 Times
c. 8 Times
d. None of the above

20. From the following information calculate the total assets turnover ratio:

Particulars Amount

Inventory 2,00,000

Bank 4,00,000

Trade receivables 1,00,000

Trade payables 75,000

Salary outstanding 1,75,000

Sales Tax payable 2,75,000

Land 2,50,000
 Plant 4,50,000
Revenue from the operation for the year was RS. 7000000.

a. 10 Times
b. 5 Times
c. 8 Times
d. None of the above

21. From the following information calculate the debt equity ratio:

Particulars Amount

Equity share capital 4,00,000

Preference share capital 1,50,000

Reserves and surplus 75,000

Securities premium -

Profit and loss -25000

12% Debentures 6,00,000

Long term borrowings 2,00,000

Loan from bank 1,00,000

a. 1.5 : 1
b. 3.5 : 2
c. 5:4
d. None of the above

22. From the following information calculate debt equity ratio.:

Particulars Amount

Long term borrowings 80,000

 Long term provisions 50,000

Current liabilities 40,000

Non- current assets 1,00,000

Current assets 1,20,000

a. 7.8 : 5
b. 2.6 : 1
c. 5.2 : 4
d. None of the above

23. Total revenue from the operation is 12,00,000 and cash revenue is 60 % of total
revenue from the operation. Balance of opening receivable on 01.04.2016 is RS. 60,000
and the Balance of Closing receivable on 31.03.2017 is 20,000. Calculate the Trade
receivable Turnover Ratio and average collection period.

a. 12 Times 30 Days
b. 18 Times 26 Days
c. 36 Times 32 Days
d. None of the above

24. Calculate the trade payable turnover ratio and average payment period From the
following information. Credit purchases during the 2016-2017 is 22,00,000 . Balance of
opening Creditors and Bills payable on 01.04.2016 is RS. 60,000 and 30,000 and the
Balance of Closing Creditors and bills payable on 31.03.2017 is RS. 1,90,000 and
1,20,000.

a. 13 Times 37.72 Days

b. 11 Times 32.72 Days
c. 22 Times 27.72 Days
d. None of the above

25. Current Ratio is 5 : 4. Current Assets = 4,50,000. Calculate Net Working Capital.
 a. 90,000
b. 4,50,000
c. 4,00,000
d. None of the above

26. Current Ratio of a business is 3 : 2 and Quick Ratio is 1.1. If Working Capital is Rs.
300000 then calculate the value of current assets and inventory.

a. 6,00,000 and 2,40,000

b. 3,00,000 and 2,40,000
c. 9,00,000 and 2,40,000
d. None of the above

27. Current Assets of B Ltd. are Rs. 1,80,000 and the current ratio is 2 . Value of
inventories is Rs. 45,000 . Calculate liquid ratio.

a. 1.5 :1
b. 2.5 :1
c. 3 :1
d. None of the above

28. Value of Inventory of J & Co. is Rs. 3,00,000 . Liquid Assets are Rs. 7,50,000. Quick
Ratio is 1.25 . Calculate the current ratio .

a. 0.5 :1
b. 1.75 :1
c. 1.25 :1
d. None of the above

29. Current Assets = Rs. 2,00,000 . Inventory = Rs. 50,000 . Prepaid Expenses = Rs.
30,000 . Working Capital = Rs. 1,40,000. Calculate Liquid Ratio.

a. 4 :3
b. 2 :1
c. 5 :2
d. None of the above
30. The ratio of Current Assets (Rs. 75000 ) to Current Liabilities is 5 : 3. The firm is
interested in maintaining a Current ratio of 4 : 3 by acquiring some Current Assets on
credit. You are required to suggest the amount of Current Assets which must be acquired
for this purpose.

a. 45,000
b. 20,000
c. 45,000
d. None of the above

31. From the Following information calculate Equity Ratio:

c

a. 1.3
b. 2.6
c. 4.6
d. None of the above

32. Compute Debt to Total Assets Ratio from the following information.

a. 1.5 :1
b. 6.5 :2
c. 4.5 :1
d. None of the above
33. Compute Capital Gearing Ratio from the following information.

a. 4.2 :1
b. 3.4 :1
c. 1.4 :1
d. None of the above

34. Compute Proprietary ratio if equity share capital is Rs. 1,50,000; Preference Share
Capital is Rs. 1,00,000; Capital Reserve is Rs. 60,000; Profit & Loss Balance is Rs.
40,000. The value of 6 % Debentures is Rs. 75,000 and 9 % Mortgage loan- Rs. 1,25,000.
Value of Current Liabilities is Rs. 2,75,000 Non Current Assets is worth Rs. 55,000 Value
of Current Assets is Rs. 45,000.

a. 5.5
b. 3.5
c. 1.5
d. None of the above

35. Compute Interest Coverage ratio if equity share capital is Rs. 8,25,000; Preference
Share Capital is Rs. 4,95,000; Capital Reserve is Rs. 2,47,500; Profit & Loss Balance is
Rs. 4,12,500 . The Value of 15 % debentures is Rs. 1,50,000 and 10 % Mortgage loan of
Rs. 3,00,000 .The value of Current Liabilities is Rs. 8,05,000. Non Current Assets is
worth Rs. 16,50,000 and Value of Current Assets is Rs. 20,62,500.

a. 7.6 times
b. 5.6 times
c. 4.6 times
d. None of the above
36. Calculate profit before interest and tax from the following information. Profit after
interest and tax 1,38,000. 18 % Debentures = 3,12,000. Tax @ 40 %.

a. 2,30,000
b. 2,86,160
c. 5,16,160
d. None of the above

37. Calculate- Interest Coverage Ratio & Debt Service Coverage Ratio from the
following information. Net Profit before interest and tax is Rs. 9,00,000. 15 % Long Term
Debt 6,00,000 (Principal amount is repayable in 4 equal installments).

a. 10 & 3.75 times

b. 11 & 5.75 times
c. 12 & 4.75 times
d. None of the above

38. Earnings before Interest & Taxes is Rs. 2,00,000 and Lease Payments is Rs. 1,50,000.
Interest is Rs. 1,00,000. Compute Fixed Charges Coverage Ratio.

a. 1.4 :1
b. 2.8 :1
c. 4.2 :2
d. None of the above

39. If Revenue from Operations of XYZ Ltd is Rs. 25,00,000; Cost of Revenue from
Operations is Rs. 10,00,000; Selling Expense is Rs. 250000; Administrative Expenses is
Rs. 2,00,000. Calculate- Gross Profit Ratio,Operating Ratio, Operating Profit Ratio.

a. 60% ; 58% ; 42%

b. 58% ; 42% ; 60%
c. 60% ; 42% ; 58%
d. None of the above
40. Calculate Return on Assets & Return on Capital Employed on the basis of the
following information.

a. 48.59 % and 49.95 %

b. 45.59 % and 46.95 %
c. 49.59 % and 51.95 %
d. None of the above

41. From the following information calculate return on total assets.

a. 20%
b. 35%
c. 25%
d. None of the above

42. Calculate return on capital employed from the following information.

 a. 13%
b. 28%
c. 18%
d. None of the above

43. Calculate return on equity from the following information.

a. 37.5%
b. 47.5%
c. 32.5%
d. None of the above

44. On the basis of the following data calculate earning per share:

a. 1.24
b. 3.24
 c. 5.24
d. None of the above

45. On the basis of the following data calculate market price per share:

a. 7.44
b. 3.72
c. 8.6
d. None of the above

46. On the basis of the following data calculate dividend per share:

a. 0.62
b. 2.62
c. 4.62
d. None of the above

47. On the basis of the following data calculate Dividend Payout Ratio
a. 50%
b. 52%
c. 54%
d. None of the above