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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Solution

(i)

Long-term Debts = 6% Debentures + 9% Loan from Bank

= 3,00,000 + 7,00,000 = 10,00,000

Equity = Paid-up Share Capital + Debenture Redemption Reserve

= 17,00,000 + 3,00,000 = 20,00,000

(ii)

Current Assets = Other Current Assets + Inventory

= 8,00,000 + 1,00,000

= 9,00,000

Working Capital = Current Assets − Current Liabilities

= 9,00,000 − 4,00,000

= 5,00,000

Net Sales = Cash Sales + Credit sales

= 40,00,000 + 20,00,000

= 60,00,000

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Similar questions

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

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

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)

On the basis of the following information, calculate :

(i) Debt-Equity Ratio and

(ii) Working Capital Turnover Ratio

Information :

$\begin{matrix} Rs. Net Revenue from Operations & 60,00,000 Cost of Revenue from Operations & 45,00,000 Other Current Assets & 11,00,000 Current Liabilities & 4,00,000 Paid up Share Capital & 6,00,000 6% Debentures & 3,00,000 9% Loan & 1,00,000 Debenture Redemption Reserve & 2,00,000 Closing Inventory & 1,00,000 \end{matrix}$

Q. From the information given below, calculate any three of the following ratio:

(i) Gross Profit Ratio;
(ii) Working Capital Turnover Ratio:
(iii) Debt to Equity Ratio; and
(iv) Proprietary Ratio.

	₹		₹
Revenue from Operations (Net Sales)	5,00,000	Current Liabilities	1,40,000
Cost of Revenue from Operations (Cost of Goods Sold)	3,00,000	Paid-up Share Capital	2,50,000
Current Assets	2,00,000	13% Debentures	1,00,000

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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