Long Answer TypeFrom the following information, calculate any two of the following ratios:
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ration and
(c) Return on Investment
Information: Equity Share capital Rs 50,000, General Reserve Rs 5,000; Profit and Loss
Account after tax and interest Rs 15,000; 9% Debenture Rs 20,000; Creditors Rs 15,000; Land and Building Rs 65,000; Equipment Rs 15,000; Debtors Rs 14,500 and Cash Rs 5,500. Discount on issue of shares Rs 5,000
Sales for the year ended 31-3-2011 was Rs 1,50,000. Tax rate 50%.
i) Debt equity Ratio:
= long term debt/shareholders fund
long term debt =debentures =20000
Shareholders fund = equity share capital + General reserve +P & L a/c- discount on issue of share
= 50,000+5000+15,000 - 5000=65,000
Debt equity ratio= 20000/65000=0.31:1
ii) Working Capital Turnover Ratio:
=(sales/ working capital)=150000/(current assets – current liabilities)
=150000/(14500+5500-15000)
=150000/5000=30times
iii) Return on investment:
=Profit before interest and tax/ capital employed
Profit after interest and tax= 15000
Profit before tax= 15000*100/50=30000
Profit before interest and tax=30000+(9% of 20000)=30000+1800=31800
Capital employed=debt+equity=20000+65000=85000
Return on investment =31800/85000*100=37.41%
From the following Balance Sheets of Sonam Ltd as on 31-3-2012 and 31-3-2011.
Prepare a Cash Flow Statements:
|
Liabilities |
31-3-2011 Rs |
31-3-2011 Rs |
Assets |
31-3-2011 Rs |
31-3-2011 Rs |
|
Equity Shares Capital Profit and Loss Account Bank Loan Proposed Dividend Provision for tax Creditors |
1,00,000
25,000
50,000 20,000
10,000 15,000
|
1,50,000
50,000
25,000 15,000
17,500 11,250 |
Patents Building Investment Debtors Stock Cash
|
12,500 1,50,000 - 50,000 2,500 5,000 |
11,250 1,50,000 18,750 3,750 21,250 |
|
|
|
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|
2,20,000 |
2,68,750 |
|
2,20,000 |
2,68,750 |
|
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|
|
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Additional Information:
During the year a Building having book value Rs 50,000 was sold at a loss of Rs 2,000 and depreciation charged on Building was Rs 4,000.
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