Scribd Logo
Upload

Welcome to Scribd!

  • 12 views

    T1-Additional Numerical On RatioAnalysis

    Uploaded by

    Kumud
    EEFM

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    T1-Additional Numerical On RatioAnalysis

    Uploaded by

    Kumud
    12 views2 pages
    EEFM

    Original Title

    T1-Additional Numerical on RatioAnalysis

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    EEFM

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    12 views2 pages

    T1-Additional Numerical On RatioAnalysis

    Uploaded by

    Kumud
    EEFM

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 2

    DEPARTMENT OF HUMANITIES AND MANAGEMENT

    HUM 3051 Engineering Economics and Financial Management


    Additional Numerical on Ratio Analysis for Practice

    1) Selected financial information about Vijay Merchant Company is given below:

    In 20X1, the company had receivables of `2,500 and inventories of `3,000.


    Required
    a) Compute the current ratio, quick ratio, average collection period, and inventory
    turnover for 20X1 and 20X2.
    b) State whether there is a favourable or unfavourable change in liquidity from 20X1 to
    20X2.

    2) The total sales call credit of a firm is Rs, 3,00,000. It has a gross profit margin of 25% and
    current ratio is 2. The firm’s current liability is Rs. 65,000. Inventories are Rs. 34,000 and
    cash at Rs. 13,000.
    a) Determine the average inventory to be carried by the firm, if an inventory turnover of
    5 times is expected.
    b) Determine the average collection period if the opening balance of debtors is intended
    to be Rs. 50,000. (Assume a 365day year)

    3) The Balance Sheet and Income Statement of a Horizon Ltd. are given below.
    Balance Sheet as on 31-3-2010

    Liabilities Amount Assets Amount


    Capital $20000 Plant and equipment $12800
    Retained earnings $7360 Land and building $1600
    Sundry creditors $2080 Cash $3200
    Bills payable $4000 Sundry debtors $6400
    Other current liabilities $400 Stock $9600
    Prepaid expense $240
    Total $33840 $33840

    Income statement year ended 31-3-2010


    Particulars Amount in $
    Sales $80,000
    Costs of goods sold $61600
    Gross profit $18400
    Operating expenses $13600
    Profit before tax $48000
    Tax 50%

    Sundry debtors and stock at the beginning of the year was $6,000 and $8,000 respectively.
    You are required to determine the following ratios,
    a) Current ratio
    b) Acid test ratio
    c) Inventory turnover ratio
    d) Debtor turnover ratio
    e) Gross profit ratio
    f) Net profit ratio

    You might also like