ACCOUNTS GURU®

PEAK PERFORMANCE
BAS MASTERY WORKSHEET
ITNA
KARLO ACCOUNTANCY
CLASS 12
Chapter 9: Ratios

1 While computing Current Ratio, Current Assets does not include: 1

(a) Loose tools and Stores and Spares
(b) Provision for Bad debts
(c) Prepaid expenses
(d) Both (a) and (b)

2 Which of the following will increase liquid ratio without affecting current ratio? 1
(a) Sale of stock at loss
(b) Sale of stock at profit
(c) Sale of investment at cost
(d) Sale of stock at cost

3 Which of the following will reduce current ratio? 1

(a) Payment of Bills payable on maturity
(b) Conversion of debentures into equity shares
(c) Declaration of final dividend
(d) Issue of bonus shares

4 Given that:
Current Ratio 2.5
Quick Ratio 1.5
Working Capital ₹60,000
The value of current liabilities will be: 1
(a) ₹15,000 (b) ₹40,000
(c) ₹60,000 (d) ₹1,00,000

5 Total Assets to debt ratio is a: 1

(a) Profitability Ratio (b) Solvency Ratio
(c) Activity Ratio (d) Liquidity Ratio

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 6 Which of the following will have no effect on Debt equity ratio? 1
(a) Purchase of fixed asset by taking long-term loan
(b) Conversion of debentures into shares
(c) Issue of bonus shares
(d) Sale of fixed assets at a loss

7 Interest coverage ratio is given by: 1

(a) Net Profit/Interest on long-term borrowings
(b) Long-term borrowings/Interest on long-term borrowings
(c) Profit before interest and tax/Interest on long-term borrowings
(d) Profit before Tax/Interest on long-term borrowings

8 Which of the ratios show how efficiently a companys’ resources are used? 1
(a) Profitability Ratio (b) Solvency Ratio
(c) Activity Ratio (d) Liquidity Ratio

9 To calculate trade receivable turnover ratio __________ is divided by average trade receivables. 1
(a) Gross Revenue from Operations (b) Net Revenue from Operations
(c) Net Credit Revenue from Operations (d) Net Cash Revenue from Operations

10 Given that:
Opening inventory ₹1,20,000
Purchases ₹9,00,000
Return Outward ₹40,000
and the closing inventory is ₹20,000 less than opening inventory, then, Inventory Turnover Ratio is: 1
(a) 5 times (b) 7 times
(c) 8 times (d) 10 times

11 Which ratio is complimentary to each other? 1

(a) Current and Liquid Ratio
(b) Operating and Operating Profit Ratio
(c) Gross and Net Profit Ratio
(d) Trade Receivable and Trade Payable ratio

12 If LR Ltd. has Total Debts of ₹3,70,000, Long-term Debts of ₹2,00,000 and working capital of ₹1,80,000
then its Current Ratio will be __________.
(a) 2.6 : 1 (b) 3.2 : 1
(c) 2.06 : 1 (d) 1.03 : 1

13 The best definition of capital employed in calculating the rate of return on investment is: 1
(a) Current Assets + Gross Fixed Assets (b) Current Assets + Non-Current Assets
(c) Working Capital + Gross Fixed Assets (d) Working Capital + Non-Current Assets

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 14 A firm’s current ratio is 1.75 : 1. If current liabilities are ₹80,000, then its working capital will be: 1
(a) ₹1,20,000 (b) ₹1,60,000
(c) ₹60,000 (d) ₹2,80,000

15 A firm’s working capital is ₹90,000. Its current ratio is 3.5:2. Its current assets will be: 1
(a) ₹1,35,000 (b) ₹3,15,000
(c) ₹2,10,000 (d) ₹1,80,000

16 A firm’s current assets are ₹3,60,000, current ratio is 3 : 1. Cost of revenue from operations is ₹12,00,000.
Its working capital turnover ratio will be: 1
(a) 3 times (b) 5 times
(c) 8 times (d) 4 times

17 Handa Ltd. has inventory of ₹20,000. Total liquid assets are ₹1,00,000 and quick ratio is 2 : 1. Calculate
current ratio. 3

18 Calculate current ratio from the following: 3

19 Calculate the current ratio from the following information: 3

20 The current ratio of a company is 2 : 1. State giving reasons which of the following would improve,
reduce or not change the ratio:
(i) Repayment of trade payables.
(ii) Purchasing goods on credit.
(iii) Sale of Motor vehicles at a loss of 20%.
(iv) Sale of goods at a profit of 10%.
(v) Payment of final dividend already declared
(vi) Redemption of debentures at a premium. 3

21 The Quick ratio of a company is 2 : 1. State giving reasons, (for any four) which of the following would
improve, reduce or not change the ratio:
(a) Purchase of machinery for cash (b) Purchase of goods on credit
(c) Sale of furniture at cost (d) Sale of goods at a profit
(e) Cash received from trade receivables 3

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 22 A firm has a current ratio of 3 : 1. Its current liabilities are ₹20,000. Calculate the current assets and
working capital. 3

23 A business has a current ratio of 3 : 1 and quick ratio of 1.2 : 1. If the working capital is 1,80,000,
calculate the total current assets and value of inventory. 3

24 Calculate Debt Equity Ratio from the following information: 3

25 (a) From the following information, compute Total Assets to Debt Ratio: 3

(b) Also calculate proprietary ratio from the above data.

26 Assuming that the Debt-Equity ratio is 2. State giving reasons whether this ratio would increase,
decrease or remain unchanged in the following cases :
(a) Purchase of fixed asset on a credit of 2 months.
(b) Purchase of fixed asset on a long-term deferred payment basis.
(c) Issue of New shares for cash.
(d) Issue of Bonus shares.
(e) Sale of fixed asset at a loss of 3,000.
(f) Conversion of debentures into equity shares.
(g) Payment to Creditors
(h) Sale of a fixed asset at Profit 3

27 From the following informations, calculate :  3

(i) Gross Profit Ratio (ii) Inventory Turnover Ratio
(iii) Trade Receivables Turnover Ratio (iv) Operating Ratio
(v) Operating Profit Ratio

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 28 From the following information calculate any three ratio: 3
(i) Gross Profit Ratio (ii) Inventory Turnover Ratio
(iii) Current Ratio (iv) Liquid Ratio
(v) Net Profit Ratio (vi) Working Capital Ratio:

29 Following is the summarised balance sheet of a company earning profit (before interest and tax) of
₹3,00,000 during the previous financial year : 6

Calculate the rate of return on investment and interest coverage ratio during the relevant financial year.

30 Opening Inventory : ₹60,000; Closing Inventory : ₹1,00,000; Inventory Turnover Ratio 8 times; Selling
price 25% above cost. Calculate the Gross Profit Ratio. 3

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 31 Compute Inventory Turnover Ratio from the following information: 3

32 Net profit ratio of a company was 20%. Its indirect expenses were ₹80,000 and cash revenue from 
operations were ₹3,00,000. The credit revenue from operations were 80% of the total revenue from
operations. Calculate the Gross Profit Ratio of the company. 3

33 Gross Profit ratio of a company was 25%. Its credit revenue from operations were ₹18,00,000 and its
cash revenue from operations were 10% of the total revenue from operations. If the indirect expenses
of the company were ₹50,000, calculate its net profit ratio. 3

34 The following particulars are available from the accounts of Mr. Sahdev: 4

Calculate (i) Inventory turnover ratio and (ii) Average holding period. 4

35 From the following information, calculate Trade Receivables Turnover Ratio and Average Collection
Period:4

36 Calculate Inventory Turnover Ratio from the data given below: 4

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 37 Calculate the Trade Payables Turnover Ratio and Average Payment Period from the following figures: 4

38 From the details given below, calculate the following ratios : 4

(i) Current Ratio (ii) Acid Test Ratio
(iii) Working Capital Turnover Ratio

39 From the given information, calculate the Inventory Turnover Ratio:

Revenue from Operations: ₹3,00,000; GP : 25% on cost; Opening Inventory was 1/3rd of the value of
the Closing Inventory. Closing Inventory was 30% of Revenue from Operations. 4

40 From the following information obtained from the books of Kundan Ltd., calculate the inventory
turnover ratio for the years 2022 – 23 and 2023 – 24:
2022 – 23 2023 – 24

(Gross profit is 25% on cost of revenue from operations)

In the year 2015–16, inventory increased by ₹2,00,000. 4

41 From the following information, calculate Inventory Turnover Ratio:

 4

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 42 The inventory turnover ratio of a company is 3 times. State, giving reason, whether the ratio improves,
declines or does not change because of increase in the value of closing inventory by ₹5,000. 4

43 The trade receivables turnover ratio of a company is 6 times. State with reason whether the ratio will
improve, decrease or not change due to increase in the value of closing inventory by ₹50,000. 4

44 From the following information calculate any two of the following ratios : 4
(i) Gross Profit Ratio (ii) Working Capital Turnover Ratio
(iii) Proprietary Ratio (iv) Debt Equity Ratio

45 What will be the operating profit ratio if operating ratio is 83.64% ? 1

46 The gross profit ratio of a company is 50%. State with reason whether the rent received by ₹15,000 will
increase, decrease or not change the ratio. 1

CBSE SAMPLE PAPER 1 (2023-24)

RATIOS
1. Debt-Equity Ratio of Dhamaka Ltd is 3 : 1. Which of the following will result in decrease in this ratio?
1
(a) Issue of Debentures for Cash of ₹ 2,00,000.
(b) Issue of Debentures of ₹ 3,00,000 to Vendors from whom Machinery was purchased.
(c) Goods purchased on Credit of ₹ 1,00,000.
(d) Issue of Equity Shares of ₹ 2,00,000.

2. (a) A company had a liquid ratio of 1.5 and current ratio of 2 and inventory turnover ratio 6 times. It
had total current assets of ₹ 8,00,000. Find out annual sales if goods are sold at 25% profit on cost. 3

(b) Calculate debt to capital employed ratio from the following information:
Shareholders’ funds ₹ 15,00,000
8% Debentures ₹ 7,50,000
Current liabilities ₹ 2,50,000
Non-current Assets ₹ 17,50,000
Current Assets ₹ 7,50,000

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 CBSE SAMPLE PAPER 2 (2023-24)
RATIOS
1. Vibgyor Ltd. has current assets worth Rs. 3,50,000 and it needs to pay off its obligations worth
Rs.2,00,000. If the firm has to make a payment of a current liability worth Rs. 50,000, what will be the
current ratio: 1
(a) 3:1 (b) 0.75:1
(c) 1:1 (d) 2:1

2. Following is the Balance Sheet of Yorkshire Ltd. as at 31st March, 2023 3

You are required to calculate:

(i) Debt to Equity Ratio
(ii) Current Ratio
(iii) Return on Investment

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