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Question

Calculate the following ratio on the basis of following information:
(i) Gross Profit Ratio (ii) Current Ratio (iii) Acid Test Ratio (iv) Inventory Turnover Ratio (v) Fixed Assets Turnover Ratio
Rs.
Gross Profit 50,000
Revenue from Operations 1,00,000
Inventory 15,000
Trade Receivables 27,500
Cash and Cash Equivalents 17,500
Current Liabilities 40,000
Land & Building 50,000
Plant & Machinery 30,000
Furniture 20,000

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Solution

(i)

(ii)

(iii)

(iv)

Average Inventory = 15,000*

*Note: Since values for inventory in the beginning and inventory at the end is not given, the amount of inventory is assumed to be average inventory.

(v)


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