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Question -

From the following Balance Sheet and other information, calculate following ratios:
(i) Debt-Equity Ratio (ii) Working Capital Turnover Ratio (iii) Trade Receivables Turnover Ratio

Balance Sheet as at March 31, 2017

Particulars

Note No.

₹.

I. Equity and Liabilities:

1. Shareholders’ funds

a) Share capital

10,00,000

b) Reserves and surplus

9,00,000

2. Non-current Liabilities

Long-term borrowings

12,00,000

3. Current Liabilities

Trade payables

5,00,000

Total

36,00,000

II. Assets

1. Non-current Assets

a) Fixed assets

Tangible assets

18,00,000

2. Current Assets

a) Inventories

4,00,000

b) Trade Receivables

9,00,000

c) Cash and cash equivalents

5,00,000

Total

36,00,000

AdditionalInformation: Revenue from Operations ₹. 18, 00,000



Answer -

1. Debt-Equity Ratio
 
Debt = Long Term Borrowings = ₹ 12,00,0000     
Equity = Share Capital + Reserve and Surplus
= 10, 00,000 + 9, 00,000
= ₹ 19, 00,000
2. Working Capital Turnover Ratio
 
Revenue from Operations = ₹ 18, 00,000
Working Capital = Current Assets – Current Liabilities
= 18, 00,000 – 5, 00,000
= ₹ 13, 00,000
3. Trade Receivables Turnover Ratio
 
Net Credit Sales = ₹ 18, 00,000
Average Trade Receivables = ₹ 9, 00,000

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