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Standard XII
Accountancy
Interest Coverage Ratio
It is a ratio...
Question

It is a ratio which deals with the servicing of interest on loan. This ratio is___


A

Interest coverage ratio

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B

Inventory turnover ratio

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C

Debt equity ratio

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D

None of these

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Solution

The correct option is A

Interest coverage ratio


Interest coverage ratio


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Q. Which of the following are solvency ratios?
a. Debt equity ratio
b. Total fixed assets to debt ratio
c. Debt ratio
d. Interest coverage ratio
Q.

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. Rs.
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share capital
 10,00,000
b) Reserves and surplus
 9,00,000
2. Non-current Liabilities
a) Long-term borrowings
 12,00,000
3. Current Liabilities
a) 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

Additional Information: Revenue from Operations Rs. 18,00,000 Calculate:

i) Debt-Equity Ratio

ii) Working Capital Turnover Ratio

iii) Trade Receivables Turnover Ratio

(Debt-Equity Ratio 0.63:1; Working Capital Turnover Ratio 1.39 times; Trade Receivables Turnover Ratio 2 times)

Q.

The following Balance Sheet and other information, calculate following ratios:

(i) Debt Equity Ratio (ii) Working Capital Turnover Ratio (iii) Debtors Turnover Ratio

Liabilities

Amount

Rs

Assets

Amount

Rs

General Reserve

80,000

Preliminary Expenses

20,000

Profit and Loss

1,20,000

Cash

1,00,000

Loan @15%

2,40,000

Stock

80,000

Bills Payable

20,000

Bills Receivables

40,000

Creditors

80,000

Debtors

1,40,000

Share Capital

2,00,000

Fixed Assets

3,60,000

7,40,000

7,40,000

Q.

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. Rs.
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

Additional Information: Revenue from Operations Rs. 18,00,000

Q. On the basis of the following information calculate:
(i) Debt to Equity Ratio; and
(ii) Working Capital Turnover Ratio.
Information: ₹ ₹
Revenue from Operations: (a) Cash Sales 40,00,000 Paid-up Share Capital 17,00,000
(b) Credit Sales 20,00,000 6% Debentures 3,00,000
Cost of Goods Sold 35,00,000 9% Loan from Bank 7,00,000
Other Current Assets 8,00,000 Debentures Redemption Reserve 3,00,000
Current Liabilities 4,00,000 Closing Inventory 1,00,000
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