net sales. (revenue from operations) net sales. (i)Debt-equity ratio Ans. Reason Sale of goods at a profit will increase the quick assets, but the current liabilities remain unchanged. Debt to Equity Ratio=Debt (Long-term external equities)/Equity (Shareholders funds) (iv)Interest coverage ratio This ratio expresses the relationship between net profit before interest and tax and interest payable on long-term debts. State giving reasons, (for any four) which of the following would improve, reduce or not change the ratio 24.From the following information, calculate the following ratios (iii)Issue of new shares for cash (b)Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700. Ans. From the data calculate : (i) Gross Profit Ratio (ii) Net Profit Ratio (iii) Return on Total Assets. Accounts Theory : CBSE Class 12th (Ratio Analysis) Q.1. Ans. Net Credit Purchases = Credit Purchases – Purchase Return. (ii) Calculate ‘debt equity ratio’ from the following information Total assets Rs 3,50,000, total debt Rs 2,50,000 and current liabilities Rs 80,000. 2,00,000. ■ Current Assets [Current investments + Inventories (including spare parts and loose tools) + Trade Receivables + Cash and Cash Equivalents + Short-term Loans and Advances + Other Current Assets] Items Included in Current Liabilities Reason Redemption of debentures will reduce the long-term debts, but shareholders’ funds remain unchanged. prepaid expenses and cash, therefore it will not affect the value of current asset. Revenue from operations (Net sales) Rs 5,00,000, opening inventory Rs  7,000, closing inventory Rs 4,000 more than the opening inventory, net purchase Rs 1,00,000 less than revenue from operations, operating expenses Rs 30,000, liquid assets Rs 75,000, prepaid expenses Rs 2,000, current liabilities Rs 60,000, 9% debentures Rs 3,00,000, long-term loan from bank Rs 1,00,000 equity share capital Rs 10,00,000 and 8% preference share capital Rs 2,00,000. [Working Capital = Current Assets – Current Liabilities] 3,00,000, long-term loan from bank Rs. When Liabilities Approach is Followed It is computed by adding 75,000, prepaid expenses Rs. An accounting ratio is a mathematical relationship between two interrelated financial variables. Non-current Assets (Tangible assets + Intangible assets + Non-current trade It is computed to ascertain soundness of the long-term financial position of the firm. Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. 5.3 Advantages of Ratio Analysis The ratio analysis if properly done improves the user’s understanding of the efficiency with which the business is being conducted. 13.From the following information, calculate any two of the following ratios (ii)Proprietary ratio Ratio analysis means: (a) To establish mathematical relation between two figures (ii)Purchase of goods on credit … Question 2. (ii) Purchase of goods on credit Items Included in Long-term Debts Two basic measures of liquidity are : (A) Inventory turnover and Current ratio (B) Current ratio and Quick ratio (… (iv)Sale of goods at a profit Net Profit = Revenue from Operations – Cost of Revenue from Operations – Operating Expenses – Non-operating Expenses + Non-operating Income + Tax Information (i)Short-term borrowings. Maximum students of CBSE Class 12 prefer TS Grewal Textbook Solutions to score more in exam. Current Ratio. For determining the short-term solvency of a business liquidity ratios are essential. There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. 1,00,000. 1. Stock turnover ratio will decline because increase in the value of closing stock by ?5,000 will increase the value of average Inventory and decrease the cost of goods sold. Ans.Operating Profit Ratio = 100 – Operating Ratio T. S. Grewal Solutions for Class 12-commerce Accountancy CBSE, 4 Accounting Ratios. 1 Mark Questions (ii)Proprietary ratio It establishes the relationship between proprietors’ funds and total assets. 27.From the following information, calculate any two of the following ratios (i) Net profit ratio (ii) Debt equity ratio ii. ■ Non-current Assets [Fixed assets (Tangible and intangible assets) + Non-current Investments + Long-term Loans and Advances Working Capital = Current Assets – Current Liabilities. Operating Ratio =Operating Cost/ Revenue from Operations (Net sales) x 100 Ans. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Accounts Accounting ratios. These are the Accounting Ratios class 12 Notes prepared by team of expert teachers. Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 12 Comparative Statements. (v)Sale of fixed assets at a loss of 13,000. (a)Short-term borrowings (iii)Inventory turnover ratio Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. Ans.Operating Profit Ratio = 100 – Operating Ratio 2,00,000 payable after five years. myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. Effect No change Current Ratio/Working Capital Ratio=Current Assets/Current Liabilities State giving reasons whether this ratio would increase, decrease or remain unchanged in the following cases. (iv)Sale of goods at a profit (i)Non-current assets, i.e. (All india 2010) Ans. Free PDF of DK Goel Solutions Class 12 Accountancy chapterwise Solutions prepared by Subject Experts on Vedantu.com. (ii)Working capital turnover ratio Download revision notes for Accounting Ratios class 12 Notes and score high in exams. (ii) Liquid ratio/Quick ratio/Acid test ratio This ratio establishes relationship between liquid assets and current liabilities and is used to measure the firm’s ability to pay the claims of creditors immediately. (Delhi 2008; hots) Reason As there is a simultaneous increase and decrease in current asset, i.e. Choose the correct answer: Question 1. Net profit ratio is an indicator of overall operational efficiency of the business. Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs. (c)Long-term loans and advances. 30.The quick ratio of a company is 1.5 : 1. Previous Years’Examinations Questions Ans. 1.Liquidity Ratios Liquidity ratios measure the firm’s ability to fulfil its short-term financial obligations. (ii) From the given information calculate the inventory turnover ratio. Ans. Chapter 5 of Class 12 Accountancy mostly deals with the accounting ratios and various attributes associated with it. (i)Debt equity ratio (d)Short-term provisions 20,000 to the creditors, both the total of current assets and total of current liabilities will be reduced by the same amount. Question 1. = Opening Inventory + Purchases + Direct Expenses – Closing Inventory Effect Reduce (b)Non-current trade investments. Meaning and definition Ratio analysis is a process of determining and presenting the quantities relationship between two accounting figures to calculate the strength and weaknesses of a business. (ii)Working capital, i.e. These solutions for Accounting Ratios are extremely popular among Class 12 Commerce students for Accountancy Accounting Ratios Solutions come handy for quickly completing your homework and preparing for exams. There are around 4-5 set of solved Accountancy Extra questions from each and every chapter. Examples of most common ratios are Current Ratio, Equity Ratio, Debt to Equity Ratio, Fixed Assets Turnover Ratio, etc. 25.From the following information, calculate any two of the following ratios (ii)Debt equity ratio Net Sales x 100 (ii)Net profit ratio Net profit ratio shows the relationship between net profit and revenue from operations i.e. 4 times b. CBSE Class 12 Accountancy Ratio Analysis. (i)Debt to Equity ratio It establishes the relationship between long-term debt (external equities) and the equity (internal equities) i.e. A and B are sharing profits and losses equally. Ans. 18.The debt equity ratio of a company is 1:1 state giving reasons, (any four) which of the following would improve, reduce or not change the ratio (ii)Working capital turnover ratio (iii) Return on investment net sales. (c)Other current liabilities (current maturities of long-term debts, interest, accrued but not due on borrowings, interest accrued and due on borrowings, outstanding expenses, unclaimed dividend, calls-in-advance, etc) Students can solve NCERT Class 12 Accountancy Accounting Ratios MCQs Pdf with Answers to know their preparation level. Ans. Reason Cash received from debtors will not change the quick assets because the quick assets are increased and decreased with the same amount, and the current liabilities remain unchanged. Operating Expenses = Employees Benefits Expenses + Other Expenses (Other than non-operating expenses) + Depreciation and Amortisation Expenses Effect Reduce Get the free view of chapter 3 Accounting Ratios Class 12 extra questions for Class 12 Accountancy - Analysis of Financial Statements and can use Shaalaa.com to keep it handy for your exam preparation Current assets are ₹ 50,000 and current liabilities are ₹ 20,000. Calculate ‘Gross Profit Ratio’ from the following information: In case a bill receivable is dishonoured, elucidate whether this ratio will improve, decline or will have no change if the current ratio is 2: 1. (a)Long-term borrowings and opening inventory is 6 Times More than the closing inventory. Operating Ratio =Cost of Revenue from Operations + Operating Expenses/Revenue from Operations i.e. Ans. 20.Assuming that the debt equity ratio is 2. (iv)Operating profit ratio Operating profit ratio establishes the relationship between the operating profit and i.e. { R s .20,000 }{/tex}, {tex}\frac { \text { Cost of Sales } } { \text { Average Stock } } = \frac { 2,40,000 } { 30,000 }{/tex}, {tex}\frac { 29,000 + 31,000 } { 2 }{/tex}, {tex}\frac { 365 } { \text { Inventory Turnover Ratio } } = \frac { 365 } { 8 }{/tex}, {tex}\frac { \text {Gross Profit} } { \text { Net Sales /Net Revenue from Operations } } \times 100{/tex}, {tex}= \frac { \text { Current Assets } } { \text { Current Liabilities } }{/tex}, {tex}= \frac { 88,000 } { 60,000 } = 1.47 : 1{/tex}, {tex}= \frac { \text { Cost of Revenue from Operations (Cost of goods sold) } } { \text { Average inventory } }{/tex}, {tex}= \frac { 3,96,000 } { 9,000 } = 44{/tex}, {tex}= \frac { \text { Opening Inventory } + \text { Closing Inventory } } { 2 }{/tex}, {tex}= \frac { 7,000 + 11,000 } { 2 } = Rs. Debtors/Trade Receivables Turnover Ratio=Credit Revenue from Operations i. e. Net Credit Sales/Average Trade Receivables, If information about opening balances of debtors and bills receivable is missing, then only closing debtors and bills receivable will be considered. Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of goods on credit. Calculate individual partner’s gain or sacrifice due to change in ratio. Ans. It furnishes the users with essential financial data and points out the areas which demand research. Reason Purchase of machinery for cash will decrease the quick assets, but the current liabilities remain unchanged. In case a bill receivable is dishonoured, the current ratio will have no change because it would not affect either, assets or current liabilities. (a)Shareholders’ funds (i.e. (iii)Other short-term liabilities. 2.What will be the operating profit ratio, if operating ratio is 83.64%? Which of the following is a liquidity ratio? (iv) … Stock or Inventory Turnover Ratio=Cost of Revenue from Operations i. e. Cost of Goods Sold/Average Inventory (Delhi 2010; All India 2010) 19. Equity or Shareholders’ Funds = Equity Share Capital + Preference Share Capital+ Reserves and Surplus Hence, Ratio analysis is the process of interpreting the accounting ratios meaningfully and taking decisions on this basis. Discuss the importance of current and liquid ratio. Save my name, email, and website in this browser for the next time I comment. Class 12 Accountancy - Analysis Of Financial Statements Author: TS Grewal Publisher: S Chand Language: . The proprietary ratio of M Ltd is 0.80 : 1. Also, if credit purchases are not given, then all purchases are deemed to be on credit. (All India 2012) Cost of Goods Sold = Cost of Materials Consumed + Purchases of Stock-in-trade + Change in Inventories of Finished Goods, Work-in-progress and Stock in-trade + Direct Expenses Ans. If the working capital is Rs 1,80,000. When Assets Approach is Followed It is computed by adding Following information is extracted from the statement of profit and loss of gold coin Ltd. for the year ended 31st March, 2015: Prepare a comparative statement of profit and loss. or Ratio analysis is the more popularly and widely used technique of financial statement analysis. 29. Its liquid ratio is 1.5 : 1 and current ratio is 2.5 : 1. Sales – Gross Profit State with reasons whether the following transactions will increase, decrease or not change the proprietary ratio. Revenue from operations (Net sales) Rs 4,00,000, opening inventory Rs 10,000, closing inventory Rs 3,000 less than the opening inventory, net purchase 80% of revenue from operations, direct expenses Rs 20,000, current assets Rs 1,00,000, prepaid expenses Rs 3,000, current liabilities Rs 60,000, 9% debentures Rs 4,00,000, long-term loan from bank Rs 1,50,000, equity share capital Rs 8,00,000 and 8% preference share capital Rs 3,00,000. To calculate the ratio, analysts compare a company’s current assets to its current liabilities. Working Capital Turnover Ratio=Cost of Revenue from Operations or Revenue from Operations i. e. Net Sales/Working Capital There are two types of liquidity ratios: 1. CBSE issues sample papers every year for students for class 12 board exams. CBSE Class 12 Accountancy Extra Questions, Ch-10 Statement Analysis Tools and Accounting Ratios, Calculate Interest Coverage Ratio from the following information, Fixed interest charges on long term borrowing = Rs. Reason Shareholders’ funds are increased by the issue of new shares for cash, but the long-term debts remain unchanged. Total Assets It includes Current Liabilities are not required to calculate the …….. Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of fixed assets on a credit of two months. 29,000; Closing Stock Rs. (Delhi 2010 c) Ans. Capital employed can be calculated from liabilities side approach and assets side approach as follows: Ans. It is calculated by dividing a company’s cash flow or after-tax net operating income by its total debt obligations. (iii) Sale of furniture at cost (i)Current ratio 1.State with reason whether repayment of long-term loan will result in increase,decrease or no change of debt equity ratio. (Delhi 2010; All India 2010) 12.X Ltd has a current ratio of 3 : 1 and quick ratio of 2 :1. (iv)Working capital turnover ratio This ratio shows the number of times the working capital has been rotated in generating sales. Reason Sale of furniture at cost will increase the quick assets, but the current liabilities remain unchanged. Ans. Repayment of long-term loan will reduce the long-term debt but the shareholders’funds will remain same. Ans. Introduction to Accounting Ratio and Ratio Analysis Meaning of Ratio, Accounting Ratio and Understanding Ratio Analysis: Meaning of Ratio: It is an arithmetical expression of relationship between two interdependent or related items. (i) Purchase of fixed assets on a credit of two months (i) Current ratio/Working capital ratio This ratio establishes … it measures how fast the stock is moving through the firm and generating sales. Classification of Accounting Ratios. Cost of Revenue from Operations = Opening Inventory (excluding spare parts and loose tools) + Purchases + Direct Expenses – Closing Inventory (excluding spare parts and loose tools) 10,00,000 and 8% preference share capital Rs. (i) Compute ‘debtors turnover ratio’ from the following information Revenue from operations (Total sales) Rs  5,20,000, cash revenue from operations 60% of the credit revenue from operations closing debtors Rs 80,000, opening debtors are 3/4th of closing debtors. Debt equity ratio will improve as the long-term debts will decrease, but total shareholders’ funds remain unchanged. Students should solve the CBSE issued sample papers to understand the pattern of the question paper which will come in class 12 board exams this year. = 100- 83.64 = 16.36%, 3.What will be the operating profit ratio, if operating ratio is 88.94%? Therefore, the current ratio will increase. If the excess of current assets over quick assets as represented by inventory is Rs 40,000, calculate current assets and current liabilities. (All India 2008; hots) 9,000{/tex}, {tex}= \frac { \text { Debt } } { { Equity } } or \frac { \text { Long-term Debts or Loans } } { \text { Shareholders’ Funds} }{/tex}, {tex}= \frac { 4,00,000 } { 12,00,000 } = 0.33 : 1{/tex}, Change in Profit sharing ratio of Partners, Statement Analysis Tools and Accounting Ratios, Important Questions for Class 12 Accountancy Financial Statements and Analysis, Cash Flow Statement Class 12 Accountancy Practice Questions, Retirement or Death of a partner Class 12 Accountancy Important Questions, Change in Profit sharing ratio of Partners Class 12 Accountancy Extra Questions, Extra Questions of Class 12 Accountancy Fundamentals of partnership and Goodwill, Accounting for Debentures Class 12 Accountancy Practice Questions, Practice Questions for Class 12 Accountancy Dissolution of Partnership, Important Questions for Class 12 Accountancy FS of Non profit Organisation, Class 10 Science Sample Paper 2021 (Solved). Ans.Operating Profit Ratio = 100 – Operating Ratio = 100- 88.34 = 11.66%. (ii)Purchase of goods on credit (iii) Sale of furniture at cost After the payment of ? State giving reason, whether the ratio will improve, decline or not change because of increase in the value of closing Inventory by ? (i) Operating ratio      (ii) Inventory turnover ratio (iii) Proprietary ratio Liabilities Approach Share Capital + Reserves and Surplus Effect Reduce Reason Shareholders’ funds increase and decrease by the same amount. Students can solve NCERT Class 12 Accountancy Comparative Statements MCQs Pdf with Answers to know their preparation level. All chapter wise DK Goel Class 12 Accountancy Exercise Questions with Solutions to help you to revise the complete Syllabus and Score More marks. 4.Profitability Ratios These ratios measure the profitability of a business assessing the and helps in overall efficiency of the business. (iv)Short-term provisions. (All India 2009) The quick ratio of a company is 1.5 : 1. Return on Investment/Capital Employed=Net Profit before Interest, Tax and Preference Dividend/ Capital Employed x 100 Home >> Category >> Finance (MCQ) Questions and answers >> Ratio Analysis; 1) Determine Debtors turnover ratio if, closing debtors is Rs 40,000, Cash sales is 25% of credit sales and excess of closing debtors over opening debtors is Rs 20,000. a. 5.What will be the operating profit ratio, if operating ratio is 88.34%? 10.The debt-equity ratio of a company is 0.8:1. (All India 2012; Modified) Calculate quick assets and current assets. What are liquidity ratios? 21.From the following information, calculate any two of the following ratios Ratios are tools of quantitative analysis, which ignores qualitative points of view. 4 Marks Questions 12th Accountancy Sample Questions for Practical Exam. Reason The long-term debts are increased by the purchasing of fixed assets on a long-term deferred payment basis, but the shareholders’ fund remains unchanged. If the excess of current assets over quick assets as represented by inventory is Rs 1,50,000, calculate current assets and current liabilities. (ii) Opening inventory Rs 60,000, closing inventory Rs 1,00,000, inventory turnover ratio 8 times and selling price 25% above cost. (Delhi2012) [Average Collection Period =(Number of Days/ Weeks / Months in a Year )/Debtors Turnover Ratio] Average Inventory =(Opening Inventory + Closing Inventory)/2 (d)Cash and cash equivalents (cash in hand, cash at bank, cheques/drafts in hand) Items excluded in liquid assets are inventories, prepaid expenses. (ii)Trade receivables (bill receivables, debtors less provisions for doubtful debts). Ratio analysis is the comparison of line items in the financial statements of a business. 1.00,000, equity share capital Rs. (Delhi 2009; HOTS) In the absence of opening creditors and bills payable, closing creditors and bills payable can be used in the above formula. (Delhi 2009) (iv)Sale of goods at a profit Ratios calculated on the basis of past data. Explain the meaning of financial statement. Total Assets to Debt Ratio=Total Assets/Long-term Debts (ii) Purchase of fixed assets on a long-term deferred payment basis (e)Short-term loans and advances It indicates the ability of a business firm to meet its long term liabilities. Ans. (i)Purchase of machinery for cash Proprietors’ Funds or Shareholders’ Funds 31,000; Sales Rs. Solution: There chapter wise Practice Questions with complete solutions are available for download in myCBSEguide website and mobile app. Proprietory ratio establishes the relationship between proprietors funds and total assets. (i)From the following information, compute ‘debt equity ratio’ These test papers with solution are prepared by our team of expert teachers who are teaching grade in CBSE schools for years. (i) Operating profit ratio; and (if) Working capital turnover ratio NOTE Since,non-operating assets are excluded while determining capital employed, income from non-operating assets should also be excluded from profit. Revenue from operations (Sales) Rs 2,00,000, gross profit 25% on cost, inventory at the beginning is 1/3 of the inventory at the end which was 30% of sales. or Calculate the total current assets and value of inventory. Average Payables=Opening Payables (Creditors + Bills Payable) + Closing Payables (Creditors + Bills Payable)/2 investments + Long-term loans and advances) + Working Capital – Non-current Liabilities (Long-term borrowings + Long-term provisions) Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of machinery for cash. Rent paid in advance is a current asset not quick assets therefore, cash is only going to reduce so will the quick assets and it will also bring reduction in quick ratio. Redeemed 5% redeemable preference shares Rs. 8.Quick ratio of a company is 1.5:1. The entire NCERT textbook questions have been solved by best teachers for you. Analysis of Accounting Ratios Objective Type Questions. Total assets include Question 1. Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Accounts Accounting ratios. Ratio analysis is a method which includes regrouping of information by utilisation of arithmetical associations, though its interpretation is a complicated concern. 9.The inventory turnover ratio of a company is 3 times. In view of the requirements of various users, the accounting ratios may be classified as under. State with reason which of the following Effect No change Activity Ratio Analysis – Classification of Ratios – Question 3 Calculate the value of opening Inventory from the following information: Cost of revenue from operations is 16000 and Inventory turnover ratio is 1 Times. © 2021 myCBSEguide | CBSE Papers & NCERT Solutions, {tex}= \frac{{{\rm{Net Profit before Interest \Tax}}}}{{{\rm{Interest on Long Term Debt}}}}{/tex}, {tex}\frac { R s .2,20,000 (W.N.)} Ans. Ans. Effect Improve Ans. Class 12 Accountancy notes Chapter 14 Accounting Ratios Download CBSE class 12th revision notes for chapter 14 Accounting Ratios in PDF format for free. Ratios give false result, if they are calculated from incorrect accounting data. (ii) From the following information compute ‘proprietary ratio’ State with reason, whether the payment of ? Items Included in Equity or Shareholders’ Funds (i)Debt equity ratio (ii) Working capital turnover ratio Obtained a loan from bank Rs. current assets – current liabilities. Effect Reduce (b) Not change the ratio All the solutions of Accounting Ratios - Accountancy explained in detail … RBSE Class 12 Accountancy Chapter 10 Very Short Answer Questions. (i)A business has a current ratio of 3 : 1 and quick ratio of 1.2 : 1. Ans. Assets Approach State with reason which of the following transactions would (a) increase (b) decrease or (c) not change the ratio. 26.From the following information, calculate any two of the following ratios (i) Liquid ratio (ii) Debt equity ratio (Any four) What is meant by accounting ratios? (a)Current investments (i) Purchase of machinery for cash (All India 2012; hots) 20,000 to the creditors will increase, decrease or not change the ratio. (iii)Trade payables or Creditors turnover ratio It indicates the speed with which the amount is being paid to creditors. (b)Non-current liabilities (i.e. (v)Redemption of debentures at a premium MP Board Class 12th Accountancy Important Questions Chapter 10 Analysis of Accounting Ratios Analysis of Accounting Ratios Important Questions. Accounting Ratios Class 12 Accountancy MCQs Pdf. (i)Current investments. Ans. (ii)Purchase of goods on credit (iii) Sale of furniture at cost With effect from 1st April, 2016, they agree to share profits in the ratio of 4:3. transactions would (a) increase (b) decrease or (c) not change the ratio Net Profit Ratio =Net Profit after Tax/Revenue from Operations i. e. Net Sales x 100 (v)Redemption of debentures at a premium (All India 2011) Information (iii)Total assets to debt ratio It establishes a relationship between total assets and total long-term debts. The students will not miss any concept in these Chapter wise question that are specially designed to tackle Exam. Inventories of Finished Goods, Work-in-progress and Stock-in-trade + Direct Expenses No change. (i) Purchase of machinery for cash (Written) COMMERCEATEASE.COM Page … Issued equity shares to the vendors of machinery purchased for Rs. These are the final accounts prepared at the end of the accounting period and include balance sheet and statement of profit and loss along with notes to accounts. (v) Other current assets except prepaid expenses. 2.Solvency Ratios Solvency ratios judge the long-term financial position of an enterprise i.e.whether business is able to pay its long-term liabilities or not. 7.The current ratio of a company is 3 : 1. Effect No change 1.Liquidity Ratios Liquidity ratios measure the firm’s ability to fulfil its short-term financial obligations. cost of goods sold is computed by adding cost of materials consumed, purchases of stock-in-trade, changes in inventories of finished goods, work-in-progress and stock-in-trade and direct expenses Download NCERT Class 12 Accountancy Accounting Ratios NCERT Book and other CBSE KVS Accountancy latest books free in pdf format chapter wise, NCERT Class 12 Accountancy Accounting Ratios.Download NCERT Chapters and Books in pdf format. share capital, reserves and surplus). (b)Company issued 1,00,000 equity shares of Rs 10 each to the vendors of machinery purchased. How are they useful? If properly analysed, the ratios make us understand various problem areas as well as the Non-current Asset (Tangible assets + Intangible assets + Non-current trade investments + Long-term loans and advances) + Working Capital – Non-current Liabilities (Long-term borrowings + Long-term provisions) Reason The shareholders’ funds will reduce by the amount of loss of 3,000, but the long-term debt remain unchanged. This expression of the ratio is : (a) Pure ratio (b) Rate ratio (c) In the form of the percentage (b)Trade payables (bills payable and sundry creditors) long-term borrowings and long-term provisions). 11.OM Ltd has a current ratio of 3.5 : 1 and quick ratio of 2 : 1. Generally, the ratio of 2 : 1 is considered as an ideal. Alternatively operating cost may be calculated as follows: The chapter gives detailed information on ratio analysis, the objective of ratio analysis, advantages of ratio analysis, limitations of ratio analysis and types of ratios. = Cost of Materials Consumed + Purchases of Stock-in-trade + Changes in (iii)Issue of new shares for cash (b)Long-term provisions Items Included in Current Assets 3,20,000; Gross Profit Ratio 25% on sales. Ans. Answer. (v)Return on investment/Capital employed It establishes the relationship between net profit before interest, tax and preference dividend and capital employed (equity + debts). (iv) Issue of bonus shares TS Grewal Solutions for Class 12 Accountancy – Change in Profit-Sharing Ratio Among the Existing Partners (Volume I) Question 1. (c)Trade receivables (bills receivable and sundry debtors less provision for doubtful debts) Effect No change (a)Non-current Assets [Fixed assets (Tangible and intangible assets) + Non-current Investments + Long-term Loans and Advances Ratios are generally distorted by inflation. English Shaalaa provides solutions for TS Grewal Class 12 and has all the answers for the questions given in Class 12 Accountancy - Analysis Of Financial Statements.Shaalaa is surely a site that most of your classmates are using to perform well in exams. Accounting Ratios It is a mathematical expression that shows the relationship between various items or groups of items shown in financial statements. 17.The quick ratio of a company is 2 : 1. 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Download on this basis to meet its long term liabilities the requirements of various,. ( v ratio analysis questions class 12 Other current assets are ₹ 50,000 and current ratio of a company ’ s ability to its... Enterprise i.e.whether business is able to pay its long-term liabilities or not change the proprietary ratio = ( 100000/450000 0.22. It will not miss any concept in these Chapter wise DK Goel Solutions for Class Accountancy... Make us understand various problem areas as well as the myCBSEguide | papers! ) Fixed assets ( tangible Fixed assets turnover ratio, analysts compare a company is 1.5: 1 is to! ) Other current assets over quick assets as represented by inventory is Rs,! Calculate any two of the following information compute ‘ proprietary ratio of 2:1 is considered to ideal. Ncert Accountancy Solutions Part 2 Class 12 Accountancy Classification of Accounting Ratios Class 12 prefer TS Grewal textbook Solutions help. Various items or groups of items shown in financial statements Author: TS Grewal textbook Solutions help. Various problems with a firm, such as its liquidity, efficiency of the book inventory ratio... The absence of opening creditors and bills payable can be used in the financial statements of a is! Calculate ( i ) ( a ) not change the ratio of a company is 2 1!, though its interpretation is a simultaneous increase and decrease by the same.... Share profits ratio analysis questions class 12 the ratio of 2:1 is considered to be ideal total current assets quick... Are essential statements of a company is 1.5: 1 various problems with a firm the stock moving! Questions for NCERT Accountancy Solutions Part 2 Class 12 Accountancy-II Chapter 5 Accounting Ratios is. Are prepared by our team of expert teachers detail by Experts to help students prepare for CBSE! 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