ULTIMATE BOOK OF ACCOUNTANCY
(Author: Dr. Vinod Kumar, Publisher: Vishvas Publications)
Class - XII Accountancy (Text Book Solutions)
Chapter -04 (Part – B): Accounting Ratios Part-4
66. Gross profit = Sales – cost of goods sold
30,000 = 60,000 – 30,000
Operating Profit = Gross Profit – Operating Exp
10,000 = 30,000 – 20,000
Operating Ratio = 50,000/60,000 x 100 = 83.33%
Operating Cost = Cost of goods sold + operating exp
67. Cost of goods sold = Opening Inventory + Purchases + Wages – Closing Inventory
65,000 = 5,000 + 60,000 + 15,000 – 15,000
Operating Cost = Cost of goods sold + Selling and Distribution exp
70,000 = 65,000 + 5,000
Operating Ratio = 70,000/1,50,000 x 100 = 46.67%
68. Operating Cost = Cost of goods sold + office and distribution exp + Selling exp
1,50,000 = 75,000 + 25,000 + 50,000
Operating Ratio = Operating Cost/Net Sales x 100
= 1,50,000/2,50,000 x 100 = 60%
Gross Profit = Sales – Cost of goods sold
1,75,000 = 2,50,000 – 75,000
Gross Profit Ratio = Gross Profit/Net Sales x 100
= 1,75,000/2,50,000 x 100 = 70%
69. Operating Ratio = Operating cost/Revenue from operations
Operating Cost = Purchase of Stock in trade + Change in inventories of stock in trade +
employees benefit expenses + other expenses (except loss on plant)
2,45,000 = 2,25,000 – 15,000 + 6,000 + 29,000
Operating Ratio = 2,45,000/4,00,000 x 100 = 61.25%
70. Operating Cost = Cost of materials consumed + purchase of stock in trade + change in
inventories of finished goods, WIP and Stock in trade + employees benefit expenses + other
expenses
1,52,500 = 1,00,000 + 20,000 + 15,000 + 10,000 + 7,500
Operating Ratio = 1,52,500/3,00,000 x 100 = 50.83%
71. Operating Profit Ratio = Operating Profit/Revenue from operations x 100
Gross Profit = Revenue from operations – cost of revenue from operations
10,000 = 50,000 – 40,000 (80% of sales)
Operating Profit = Gross Profit – Operating expenses
5,000 = 10,000 – 5,000
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Operating Profit Ratio = 5,000/50,000 x 100 = 10%
72. Gross Profit = Revenue from operations – Cost of material consumed
30,000 = 1,50,000 – 1,20,000
Operating Profit = Gross Profit – Operating Expenses
14,000 = 30,000 – 16,000
Operating Profit Ratio = 14,000/1,50,000 x 100 = 9.33%
73. Credit Sales are 20,00,000 (i.e. 80% of the total sales)
Hence, Total Sales = 20,00,000 x 100/80 = 25,00,000
Gross Profit = 25,00,000 x 25/100 = 6,25,000
Net Profit = Gross Profit – Indirect Expenses
5,60,000 = 6,25,000 – 65,000
Net Profit Ratio = Net Profit/Net Sales x 100 = 5,60,000/25,00,000 x 100 = 22.4%
74. If Cash sales are 1,00,000 ( i.e. 10% of total sales)
Then Total Sales will be = 1,00,000 x 100/10 = 10,00,000
Gross Profit = 10,00,000 x 30/100 = 3,00,000
Net Profit = Gross Profit = Indirect Expenses
2,70,000 = 3,00,000 – 30,000
Net Profit Ratio = Net Profit/ Net Sales x 100 = 2,70,000/10,00,000 x 100 = 27%
75. Net Profit = Gross Profit – Administrative Exp – Selling & Distribution exp – Interest on
Debentures – loss by fire + income from investment
Net Sales = Sales – Sales Return
Net profit Ratio = 25,000/1,25,000 x 100 = 20%
76. Net Profit Ratio = Profit after tax/net sales x 100 = 2,55,000/5,00,000 x 100 = 51%
Net Profit Ratio = Profit before tax/net sales x 100 = 2,60,000/5,00,000 x 100 = 52%
77. Return on Investment = Net profit before interest, tax and dividend/Capital employed
Capital Employed = Eq. Sh. Capital + Pref. Sh. Capital + General Reserve + Debentures –
Discount on issue of shares
21,77,000 = 8,00,000 + 2,00,000 + 3,78,000 + 8,00,000 – 1,000
Interest on Debentures = 8,00,000 x 10/100 = 80,000
Net profit before interest, tax and dividend = 1,60,000 + 80,000
ROI = 2,40,000/21,77,000 x 100 = 11.02%
78. ROI = Profit before interest and tax/Capital Employed x 100
Capital Employed = Net fixed assets (after depreciation reserve) + working capital (CA-CL)
12,75,000 = 9,50,000 – 3,25,000
Profit after tax = 2,50,000 Given
Profit before tax = 2,50,000 x 100/50 = 5,00,000
Profit before interest and tax = 5,00,000 + 30,000 (3,00,000 x 10/100)
ROI = 5,30,000/12,75,000 x 100 = 41.57%
79. Return on capital employed = Profit before interest and tax/Capital employed x 100
Profit before interest and tax = 70,000 + 30,000 (2,00,000 x 15/100)
Capital Employed = Shareholders funds + Long term debts
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3,20,000 = 1,20,000 + 2,00,000
ROI = 1,00,000/3,20,000 x 100 = 31.25%
80. Return on Investment = Net profit before interest and tax/Capital employed x 100
Net profit before interest and tax = 6,00,000 + 4,00,000 (tax) + 1,00,000 (interest)
Tax = 6,00,000 x 40/60 = 4,00,000
ROI = 11,00,000/80,00,000 x 100 = 13.75%
81. Capital Employed (Liabilities Approach)
Sh.Capital + Reserves and Surplus + Money received against share warrant + Long term
borrowings + Deferred tax liabilities – Unamortised loss on issue of debentures
16,80,000 = 10,00,000 + 2,00,000 + 1,00,000 + 4,00,000 + 60,000 – 80,000
Capital Employed (Assets Approach)
Fixed Assets (Tangible + Intangible) + Working capital
16,80,000 = 14,00,000 + 2,80,000
Working capital = CA (except unamortised loss) – CL
2,80,000 = 3,00,000 + 1,20,000 + 1,00,000 – 2,40,000
82. ROI = Profit before interest/Capital Employed
Profit before interest = Statement of P/L 1,20,000 + 1,20,000(interest)
Capital Employed = Sh.Capital + Reserves and Surplus + Long term borrowings +
unamortised loss
23,60,000 = 12,00,000 + 2,00,000 + 10,00,000 – 40,000
ROI = 2,40,000/23,60,000 x 100 = 10.17%
83. ROI = Profit before interest/Capital employed
Profit before interest = Statement of P/L + Interest (10% interest on debentures)
90,000 = 65,000 + 25,000
Capital Employed with Assets Approach:
Fixed tangible assets + trade receivables + Cash and cash equivalents + other current assets
(prepaid exp) – current liabilities
5,87,500 = 5,00,000 + 1,70,000 + 50,000 + 17,500 – 1,50,000
Capital Employed with Liabilities Approach:
Sh.Capital + Reserves and Surplus + Money received against share warrants+ Long term
borrowings- Non current investments – Deferred tax assets – unamortised share issue exp
5,87,500 = 4,00,000 + 1,00,000 + 25,000 + 2,50,000 – 1,50,000 – 30,000 – 7,500
ROI = 90,000/5,87,500 x 100 = 15.32%
84. Net profit before interest, tax and dividend = 7,00,000 + 3,00,000 (20,00,000 x 15/100)
ROI = 10,00,000/32,00,000 x 100 = 31.25%
Capital Employed = Shareholders funds + 15% Long term debts
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