Ans. (i)Debt-equity ratio (a)Included in the trade payables was a bills payable of Rs 9,000 which was met on maturity. All the solutions of Accounting Ratios - Accountancy explained in detail … (ii)Working capital turnover ratio (iii) Return on investment (ii) Purchase of goods on credit (i)Purchase, of machinery for cash 12th Accountancy Sample Questions for Practical Exam. How much must be the decline in current assets to bring the ratio to 2 : 1? The higher the ratio, the better it is.Creditors/Payables Turnover Ratio =Net Credit Purchases/Average Payables 34.From the following information, calculate any two of the following ratios (i)Purchase of fixed assets on a credit of two months 9.The inventory turnover ratio of a company is 3 times. Ans. (v)Cash received from debtors (Delhi 2011 c) myCBSEguide | CBSE Papers & NCERT Solutions. Because bills receivable decreases and debtors increase by the same amount. (Delhi 2013) It is calculated by dividing a company’s cash flow or after-tax net operating income by its total debt obligations. (e)Short-term loans and advances (All India 2008; hots) Items excluded in liquid assets are inventories, prepaid expenses. Items Included in Liquid/Quick Assets (iii)Sale of furniture at cost If the working capital is Rs 1,80,000. Reason Shareholders’ funds are increased by the issue of new shares for cash, but the long-term debts remain unchanged. Which of the following is a liquidity ratio? (v)Cash received from debtors Revenue from Operations – Gross Profit. Its liquid ratio is 1.5 : 1 and current ratio is 2.5 : 1. Ans. If properly analysed, the ratios make us understand various problem areas as well as the Question 2. From the following information compute ‘proprietary ratio’. 1 Mark Questions and opening inventory is 6 Times More than the closing inventory. (iii) Sale of furniture at cost (All India 2012; hots) 30,000, liquid assets Rs. Discuss the importance of current and liquid ratio. Ans.Operating Profit Ratio = 100 – Operating Ratio Alternatively operating cost may be calculated as follows: transactions would (a) increase (b) decrease or (c) not change the ratio sales for the year ended 31st March, 2011 was Rs 30,00,000. In the absence of opening creditors and bills payable, closing creditors and bills payable can be used in the above formula. Download NCERT Class 12 Accountancy Accounting Ratios NCERT Book and other CBSE KVS Accountancy latest books free in pdf format chapter wise, NCERT Class 12 Accountancy Accounting Ratios.Download NCERT Chapters and Books in pdf format. (c)Long-term loans and advances. Repayment of long-term loan will reduce the long-term debt but the shareholders’funds will remain same. Reason Cash received from debtors will not change the quick assets because the quick assets are increased and decreased with the same amount, and the current liabilities remain unchanged. 5.3 Advantages of Ratio Analysis The ratio analysis if properly done improves the user’s understanding of the efficiency with which the business is being conducted. Students who are in class 12th or preparing for any exam which is based on Class 12 Accountancy can refer NCERT Accountancy-II Book for their preparation. (ii) From the given information calculate the inventory turnover ratio. 2 times c. 6 times d. 8 times. Working Capital = Current Assets – Current Liabilities. Operating Ratio =Operating Cost/ Revenue from Operations (Net sales) x 100 Question 1. Cost of Goods Sold Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of fixed assets on a credit of two months. (ii)Purchase of goods on credit Explain the meaning of financial statement. (iv) Issue of bonus shares Reason Purchase of goods on credit will increase the current liabilities, but the quick assets remain unchanged. 2.What will be the operating profit ratio, if operating ratio is 83.64%? After the payment of ? 1. State with reason which of the following transaction would increase, decrease or not change the ratio  (All India 2012) Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Examples of most common ratios are Current Ratio, Equity Ratio, Debt to Equity Ratio, Fixed Assets Turnover Ratio, etc. Debtors/Trade Receivables Turnover Ratio=Credit Revenue from Operations i. e. Net Credit Sales/Average Trade Receivables, If information about opening balances of debtors and bills receivable is missing, then only closing debtors and bills receivable will be considered. (iv)Issue of bonus shares 10.The debt-equity ratio of a company is 0.8:1. This ratio is computed as follows: Proprietory ratio= {tex}\frac{Proprietor’s\;Funds\;or\;shareholder’s\;funds}{Total\;assets}{/Tex}, Proprietors funds = Liabilities Approach: Share capital + Reserves and Surplus. 22.From the following information, calculate any two of the following ratios (i) Liquid ratio (ii) Gross profit ratio (iii)Debt equity ratio NCERT Solutions for Class 12 Commerce Accountancy Chapter 5 Accounting Ratios are provided here with simple step-by-step explanations. (Delhi 2010; All India 2010) (i) Operating profit ratio; and (if) Working capital turnover ratio Operating Ratio =Cost of Revenue from Operations + Operating Expenses/Revenue from Operations i.e. NCERT Book for Class 12 Accountancy-II Chapter 5 Accounting Ratios is available for reading or download on this page. 1.00,000, equity share capital Rs. Average Payables=Opening Payables (Creditors + Bills Payable) + Closing Payables (Creditors + Bills Payable)/2 Ratios are generally distorted by inflation. Total Assets to Debt Ratio=Total Assets/Long-term Debts State with reason which of the following transactions would (a) increase (b) decrease or (c) not change the ratio. (i) Purchase of machinery for cash Easy to print and read. (ii)Purchase of fixed assets on long-term deferred payment basis Ans. Current Ratio/Working Capital Ratio=Current Assets/Current Liabilities Reason Shareholders’ funds increase and decrease by the same amount. (i) (a) Not change the ratio There are around 4-5 set of solved Accountancy Extra questions from each and every chapter. (i)From the following information, compute ‘debt equity ratio’ Redeemed 5% redeemable preference shares Rs. Answer: A relationship between various accounting figures, which are connected with each other, expressed in mathematical terms, is called accounting ratios. (iii)Cash and cash equivalents. Accounting Ratios Class 12 Accountancy MCQs Pdf. 7.The current ratio of a company is 3 : 1. 26.From the following information, calculate any two of the following ratios (i) Liquid ratio (ii) Debt equity ratio = 100- 83.64 = 16.36%, 3.What will be the operating profit ratio, if operating ratio is 88.94%? A and B are sharing profits and losses equally. (ii)Purchase of goods on credit (iii) Sale of furniture at cost 30.The quick ratio of a company is 1.5 : 1. Ans. (d)Cash and cash equivalents (cash in hand, cash at bank, cheques/drafts in hand) Hence, Ratio analysis is the process of interpreting the accounting ratios meaningfully and taking decisions on this basis. Ans. From the following information, calculate any two of the following ratios. Ans. Effect Reduce 29,000; Closing Stock Rs. Is there any Free Test Series for NEET 2021? 17.The quick ratio of a company is 2 : 1. Rajasthan Board RBSE Class 12 Accountancy Chapter 11 Ratio Analysis RBSE Class 12 Accountancy Chapter 11 Textbook Questions RBSE Class 12 Accountancy Chapter 11 Multiple Choice Questions. (iii)Inventory turnover ratio Free PDF Download - Best collection of CBSE topper Notes, Important Questions, Sample papers and NCERT Solutions for CBSE Class 12 Accounts Accounting ratios. State with reason whether the decrease in rent received by Rs 15,000 will increase, decrease or not change the ratio. (i)Compute ‘working capital turnover ratio’ from the following information Cash revenue from operations Rs 1,30,000, credit revenue from operations Rs  3,80,000, sales returns Rs  10,000, liquid assets Rs 1,40,000, current liabilities Rs 1,05,000 and inventory Rs 90,000. 3,00,000, long-term loan from bank Rs. or Calculate quick assets and current assets. Ans. 12.X Ltd has a current ratio of 3 : 1 and quick ratio of 2 :1. Ratios are tools of quantitative analysis, which ignores qualitative points of view. (a)Non-current Assets [Fixed assets (Tangible and intangible assets) + Non-current Investments + Long-term Loans and Advances 4 times b. 24.From the following information, calculate the following ratios 2,000, current liabilities Rs. (ii)Trade receivables (bill receivables, debtors less provisions for doubtful debts). State giving reason whether the ratio will improve, decline or not change on payment of dividend by the company. 13.From the following information, calculate any two of the following ratios 20,000 to the creditors, both the total of current assets and total of current liabilities will be reduced by the same amount. 350000 (4) Reserve and Surplus: Rs. Proprietors’ Funds or Shareholders’ Funds (i)Debt equity ratio Long Questions for NCERT Accountancy Solutions Part 2 Class 12 Chapter 5. (f)Other current assets (prepaid expenses, interest receivable, etc.) State with reason, whether the payment of ? RBSE Class 12 Accountancy Chapter 10 Very Short Answer Questions. 5,00,000, opening inventory Rs. Ans. [Working Capital = Current Assets – Current Liabilities] (Delhi 2010; All India 2010) 20.Assuming that the debt equity ratio is 2. NCERT Solutions, NCERT Exemplars, Revison Notes, Free Videos, CBSE Papers, MCQ Tests & more. (v) Sale of fixed assets at a loss of Rs 3,000 Class 12 Accountancy notes Chapter 14 Accounting Ratios Download CBSE class 12th revision notes for chapter 14 Accounting Ratios in PDF format for free. The current ratio is 2.5 : 1. 2,00,000. net sales. (iii)Total assets to debt ratio It establishes a relationship between total assets and total long-term debts. 9,700. (Delhi 2010 c) Total assets include Analysis of Accounting Ratios Objective Type Questions. (ii)Working capital turnover ratio (i)Current ratio Revenue from operations (Net sales) Rs. State with reasons whether the following transactions will increase, decrease or not change the proprietary ratio. Rent paid in advance is a current asset not quick assets therefore, cash is only going to reduce so will the quick assets and it will also bring reduction in quick ratio. Stock turnover ratio of a concern is 6 times. Calculate the total current assets and value of inventory. Stock or Inventory Turnover Ratio=Cost of Revenue from Operations i. e. Cost of Goods Sold/Average Inventory Return on Investment/Capital Employed=Net Profit before Interest, Tax and Preference Dividend/ Capital Employed x 100 Proprietary Ratio=Proprietors’ Funds or Shareholders’ Funds/Total Assets (i) Purchase of machinery for cash Reason The long-term debts are increased by the purchasing of fixed assets on a long-term deferred payment basis, but the shareholders’ fund remains unchanged. (a)Fixed assets (tangible fixed assets, intangible fixed assets). English Shaalaa provides solutions for TS Grewal Class 12 and has all the answers for the questions given in Class 12 Accountancy - Analysis Of Financial Statements.Shaalaa is surely a site that most of your classmates are using to perform well in exams. (i) Gross profit ratio Gross profit ratio shows the relationship between the gross profit to net sales (revenue from operations) Accounting Ratios It is a mathematical expression that shows the relationship between various items or groups of items shown in financial statements. (v)Redemption of debentures at a premium Ans. Information Equity share capital Rs 10,00,000, general reserve Rs 1,00,000, balance of statement of profit and loss after interest and tax Rs 3,00,000, 12% debentures Rs 4,00,000, creditors Rs 3,00,000, land and buildings Rs 13,00,000, furniture Rs 3,00,000, debtors 12,90,000, cash Rs 1,10,000.Revenue from operations i.e. From the data calculate : (i) Gross Profit Ratio (ii) Net Profit Ratio (iii) Return on Total Assets. It is a ratio which is calculated on the basis of accounting information. 5,000. State whether the long-term loan obtained by the company will improve, decrease or not change the ratio. Calculate. (iii)Operating ratio Operating ratio establishes the relationship between operating cost and revenue from operations i.e. If the excess of current assets over quick assets as represented by inventory is Rs 1,50,000, calculate current assets and current liabilities. Items Included in Equity or Shareholders’ Funds Net Profit Ratio =Net Profit after Tax/Revenue from Operations i. e. Net Sales x 100 75,000, prepaid expenses Rs. (ii) From the following information compute ‘proprietary ratio’ Also, if credit sales are not specified, then total sales will be deemed to be on credit. Download revision notes for Accounting Ratios class 12 Notes and score high in exams. 3,20,000; Gross Profit Ratio 25% on sales. 2,00,000 payable after five years. Also, if credit purchases are not given, then all purchases are deemed to be on credit. Net Credit Sales = Credit Sales – Sales Return or, Credit Revenue from Operations = Revenue from Operations – Cash Revenue from Operations, Average Trade Receivables = Opening Receivables (Debtors + Bills Receivable) +Closing Receivables (Debtors + Bills Receivable)/2. Therefore, the current ratio will increase. Current Ratio. Statement Analysis Tools and Accounting Ratios Class 12 Accountancy Extra Questions. From the following particulars found in the Trading, Profit and Loss Account of A Company Ltd., … it measures how fast the stock is moving through the firm and generating sales. Ans. (iv)Sale of goods at a profit (v)Return on investment/Capital employed It establishes the relationship between net profit before interest, tax and preference dividend and capital employed (equity + debts). Capital employed can be calculated from liabilities side approach and assets side approach as follows: (A) Liquidity Ratios 1. Accounting Ratios – CBSE Notes for Class 12 Accountancy. Therefore, they do not provide complete information for future forecasting. Important Questions for Class 12 AccountancyClass 12 AccountancyNCERT Solutions Home Page, Filed Under: CBSE Tagged With: Accountancy Classification of Accounting Ratios, Class 12 Accountancy, RD Sharma Class 11 Solutions Free PDF Download, NCERT Solutions for Class 12 Computer Science (Python), NCERT Solutions for Class 12 Computer Science (C++), NCERT Solutions for Class 12 Business Studies, NCERT Solutions for Class 12 Micro Economics, NCERT Solutions for Class 12 Macro Economics, NCERT Solutions for Class 12 Entrepreneurship, NCERT Solutions for Class 12 Political Science, NCERT Solutions for Class 11 Computer Science (Python), NCERT Solutions for Class 11 Business Studies, NCERT Solutions for Class 11 Entrepreneurship, NCERT Solutions for Class 11 Political Science, NCERT Solutions for Class 11 Indian Economic Development, NCERT Solutions for Class 10 Social Science, NCERT Solutions For Class 10 Hindi Sanchayan, NCERT Solutions For Class 10 Hindi Sparsh, NCERT Solutions For Class 10 Hindi Kshitiz, NCERT Solutions For Class 10 Hindi Kritika, NCERT Solutions for Class 10 Foundation of Information Technology, NCERT Solutions for Class 9 Social Science, NCERT Solutions for Class 9 Foundation of IT, PS Verma and VK Agarwal Biology Class 9 Solutions, (i)Debt equity ratio (ii) Working capital turnover ratio, Important Questions for Class 12 Accountancy, Accountancy Classification of Accounting Ratios, NCERT Solutions for Class 10 Science Chapter 1, NCERT Solutions for Class 10 Science Chapter 2, Periodic Classification of Elements Class 10, NCERT Solutions for Class 10 Science Chapter 7, NCERT Solutions for Class 10 Science Chapter 8, NCERT Solutions for Class 10 Science Chapter 9, NCERT Solutions for Class 10 Science Chapter 10, NCERT Solutions for Class 10 Science Chapter 11, NCERT Solutions for Class 10 Science Chapter 12, NCERT Solutions for Class 10 Science Chapter 13, NCERT Solutions for Class 10 Science Chapter 14, NCERT Solutions for Class 10 Science Chapter 15, NCERT Solutions for Class 10 Science Chapter 16, CBSE Previous Year Question Papers Class 12, CBSE Previous Year Question Papers Class 10, Credit Revenue from Operations i.e. We have taken care of every single concept given in CBSE Class 12 Accountancy syllabus and questions are framed as per the latest marking scheme and blue print issued by CBSE for class 12. Items Included in Long-term Debts It includes long-term borrowings and long-term provisions. Items Included in Current Assets TS Grewal Solutions for Class 12 Accountancy – Change in Profit-Sharing Ratio Among the Existing Partners (Volume I) Question 1. (Delhi 2008; hots) (c)Trade receivables (bills receivable and sundry debtors less provision for doubtful debts) 4 Marks Questions 31.From the following calculate: Calculate individual partner’s gain or sacrifice due to change in ratio. (iv)Operating profit ratio Operating profit ratio establishes the relationship between the operating profit and i.e. Ans. (ii)Trade payables (bills payable and sundry creditors). (Delhi 2009) (ii)Working capital, i.e. Current Liabilities are not required to calculate the …….. Copies of these textbooks may be downloaded and used as textbooks or for reference. (b)Trade receivables included a debtor Shri Ashok who paid his entire amount due Rs 9,700. or (ii)Proprietary ratio Net profit ratio is an indicator of overall operational efficiency of the business. Ans. (i)For Current Ratio first there is a need to find the value of current assets than calculated as follows:-Current Ratio. With effect from 1st April, 2016, they agree to share profits in the ratio of 4:3. (c)Other current liabilities (current maturities of long-term debts, interest, accrued but not due on borrowings, interest accrued and due on borrowings, outstanding expenses, unclaimed dividend, calls-in-advance, etc) Choose the correct answer: Question 1. 10,00,000 and 8% preference share capital Rs. 33. (All India 2009) Maximum students of CBSE Class 12 prefer TS Grewal Textbook Solutions to score more in exam. (Delhi 2009; HOTS) Effect Decrease Effect No change = 100- 88.94 = 11.06%, 4.What will be the operating profit ratio, if operating ratio is 81.38%? Items Included in Long-term Debts Reason The shareholders’ funds will reduce by the amount of loss of 3,000, but the long-term debt remain unchanged. Reason Sale of furniture at cost will increase the quick assets, but the current liabilities remain unchanged. 32. NCERT Solutions for Class 12-commerce Accountancy CBSE, accountancy-company-accounts-and-analysis-of-financial-statements. Ans. Debt to Equity Ratio=Debt (Long-term external equities)/Equity (Shareholders funds) Home >> Category >> Finance (MCQ) Questions and answers >> Ratio Analysis; 1) Determine Debtors turnover ratio if, closing debtors is Rs 40,000, Cash sales is 25% of credit sales and excess of closing debtors over opening debtors is Rs 20,000. a. (ii) Current liabilities of a company are Rs 1,60,000. (ii)Debt equity ratio MP Board Class 12th Accountancy Important Questions Chapter 10 Analysis of Accounting Ratios Analysis of Accounting Ratios Important Questions. (i)Debt equity ratio (ii) Working capital turnover ratio 1.Liquidity Ratios Liquidity ratios measure the firm’s ability to fulfil its short-term financial obligations. (b)Long-term provisions Reason Shareholders’ funds are increased by the amount of profit on sale of goods, but the long-term debts remain unchanged. (i)Current investments. For determining the short-term solvency of a business liquidity ratios are essential. 21.From the following information, calculate any two of the following ratios The ideal coverage ratio is 6 to 7 times. (Delhi 2008; hots) (ii)Trade Receivables or Debtors turnover ratio It indicates economy and efficiency in the collection of amount due from debtors. (revenue from operations) net sales. 14.On basis of the following information, calculate Revenue from operations (Sales) Rs 2,00,000, gross profit 25% on cost, inventory at the beginning is 1/3 of the inventory at the end which was 30% of sales. Effect Reduce (All india 2010) (Delhi 2014) 60,000, 9% debentures Rs. (b) Not change the ratio 23. No change. (v) Other current assets except prepaid expenses. Generally, the ratio of 2 : 1 is considered as an ideal. (iv)Sale of goods at a profit Students can solve NCERT Class 12 Accountancy Comparative Statements MCQs Pdf with Answers to know their preparation level. Effect Improve myCBSEguide has just released Chapter Wise Question Answers for class 12 Accountancy. Effect No change = Cost of Materials Consumed + Purchases of Stock-in-trade + Changes in 1.State with reason whether repayment of long-term loan will result in increase,decrease or no change of debt equity ratio. In case, statement of profit and loss is given, cost of revenue from operations i.e. (iv)Working capital turnover ratio This ratio shows the number of times the working capital has been rotated in generating sales. Stock turnover ratio will decline because increase in the value of closing stock by ?5,000 will increase the value of average Inventory and decrease the cost of goods sold. When Assets Approach is Followed It is computed by adding Calculate the gross profit ratio. Meaning and definition Ratio analysis is a process of determining and presenting the quantities relationship between two accounting figures to calculate the strength and weaknesses of a business. Solvency Ratios are calculated to judge the long-term solvency of the business. Net Profit = Revenue from Operations – Cost of Revenue from Operations – Operating Expenses – Non-operating Expenses + Non-operating Income + Tax (i) Compute ‘debtors turnover ratio’ from the following information Revenue from operations (Total sales) Rs  5,20,000, cash revenue from operations 60% of the credit revenue from operations closing debtors Rs 80,000, opening debtors are 3/4th of closing debtors. 4.Profitability Ratios These ratios measure the profitability of a business assessing the and helps in overall efficiency of the business. Tax rate is 50%. (b)Non-current liabilities (i.e. Debt equity ratio will improve as the long-term debts will decrease, but total shareholders’ funds remain unchanged. Question 1. (All India 2012; Modified) (v)Redemption of debentures at a premium (All India 2011) 18.The debt equity ratio of a company is 1:1 state giving reasons, (any four) which of the following would improve, reduce or not change the ratio or Ans. Effect Reduce (All India 2009) Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 12 Comparative Statements. (ii)Purchase of goods on credit (iii) Sale of furniture at cost If the excess of current assets over quick assets as represented by inventory is Rs 40,000, calculate current assets and current liabilities. (i)Liquid ratio Operating Cost = Cost of Materials Consumed + Purchases of Stock-in-trade + Change in Inventories of Finished Goods, Work-in-progress and Stock-in-trade + Employees Benefits Expenses + Other Expenses (Other than non-operating expenses) Interest Coverage Ratio =Net Profit before Interest and Tax/Interest on Long-term Debts, 3.Turnover or Performance or Activity Ratios These ratios measure how efficiently a company is using its assets to generate sales. Effect Increase © 2021 myCBSEguide | CBSE Papers & NCERT Solutions, {tex}= \frac{{{\rm{Net Profit before Interest \Tax}}}}{{{\rm{Interest on Long Term Debt}}}}{/tex}, {tex}\frac { R s .2,20,000 (W.N.)} How are they useful? (v)Sale of fixed assets at a loss of 13,000. Operating Expenses = Employees Benefits Expenses + Other Expenses (Other than non-operating expenses) + Depreciation and Amortisation Expenses (i)Non-current assets, i.e. Net Sales x 100 (iv)Sale of goods at a profit Current ratio of 2:1 is considered to be ideal. NOTE Since,non-operating assets are excluded while determining capital employed, income from non-operating assets should also be excluded from profit. It is computed to ascertain soundness of the long-term financial position of the firm. (iii)Issue of new shares for cash CBSE Class 12 Accountancy Extra Questions, Ch-10 Statement Analysis Tools and Accounting Ratios, Calculate Interest Coverage Ratio from the following information, Fixed interest charges on long term borrowing = Rs. Reason Neither the long-term debt nor the shareholders’ funds are affected by purchasing of machinery for cash. Effect Reduce It indicates the ability of a business firm to meet its long term liabilities. Ans. Therefore, the debt-equity ratio will decrease. In view of the requirements of various users, the accounting ratios may be classified as under. (ii) Calculate ‘debt equity ratio’ from the following information Total assets Rs 3,50,000, total debt Rs 2,50,000 and current liabilities Rs 80,000. Ratio It is an arithmetical expression of relationship between two related or interdependent items. 6.The gross profit ratio of a company is 50%. These solutions for Accounting Ratios are extremely popular among Class 12 Commerce students for Accountancy Accounting Ratios Solutions come handy for quickly completing your homework and preparing for exams. Revenue from operations (Net sales) Rs 4,00,000, opening inventory Rs 10,000, closing inventory Rs 3,000 less than the opening inventory, net purchase 80% of revenue from operations, direct expenses Rs 20,000, current assets Rs 1,00,000, prepaid expenses Rs 3,000, current liabilities Rs 60,000, 9% debentures Rs 4,00,000, long-term loan from bank Rs 1,50,000, equity share capital Rs 8,00,000 and 8% preference share capital Rs 3,00,000. (i)Gross profit ratio Reason Purchase of machinery for cash will decrease the quick assets, but the current liabilities remain unchanged. (i) Purchase of fixed assets on a credit of two months Free PDF download of DK Goel Solutions for Class 12 solved by Expert Teachers on Vedantu.com. (i)Purchase of machinery for cash 3 6. Non-current Assets (Tangible assets + Intangible assets + Non-current trade Ans. CBSE issues sample papers every year for students for class 12 board exams. [Average Collection Period =(Number of Days/ Weeks / Months in a Year )/Debtors Turnover Ratio] 31,000; Sales Rs. Reason As there is a simultaneous increase and decrease in current asset, i.e. (iv)Sale of goods at a profit net sales. (Delhi2012) 20,000 to the creditors will increase, decrease or not change the ratio. Obtained a loan from bank Rs. State giving reasons, (for any four) which of the following would improve, reduce or not change the ratio Effect No change (i) Stock turnover ratio or Inventory turnover ratio The ratio indicates the number of times the stock is turned in sales during the accounting period, i.e. Class 12 Accountancy - Analysis Of Financial Statements Author: TS Grewal Publisher: S Chand Language: . 15.On the basis of the following information, calculate Items Included in Current Liabilities (b)Company issued 1,00,000 equity shares of Rs 10 each to the vendors of machinery purchased. 5.What will be the operating profit ratio, if operating ratio is 88.34%? Ratio analysis is the more popularly and widely used technique of financial statement analysis. 20,000, Opening Stock Rs. Proprietary Ratio = (shareholders fund /Total assets) =(100000/450000) 0.22: 1. Non-current Asset (Tangible assets + Intangible assets + Non-current trade investments + Long-term loans and advances) + Working Capital – Non-current Liabilities (Long-term borrowings + Long-term provisions) ■ Current Assets [Current investments + Inventories (including spare parts and loose tools) + Trade Receivables + Cash and Cash Equivalents + Short-term Loans and Advances + Other Current Assets] (b)Non-current trade investments. (i)Short-term borrowings. Ratio analysis is used to identify various problems with a firm, such as its liquidity, efficiency of operations, and profitability. What are liquidity ratios? Ans. shareholders’ funds. = Opening Inventory + Purchases + Direct Expenses – Closing Inventory Operating profit ratio is an indicator of operational efficiency of the business. These are the final accounts prepared at the end of the accounting period and include balance sheet and statement of profit and loss along with notes to accounts. (ii)Working capital turnover ratio (ii) Purchase of fixed assets on a long-term deferred payment basis 1,00,000. Get the free view of chapter 3 Accounting Ratios Class 12 extra questions for Class 12 Accountancy - Analysis of Financial Statements and can use Shaalaa.com to keep it handy for your exam preparation Ratio=Liquid assets or quick Assets/Current liabilities items included in Liquid/Quick assets ( i ) operating ratio. Able to pay its long-term liabilities or not change because of increase in the value inventory! Not given, then All Purchases are not specified, then All Purchases not. Losses equally assets to bring the ratio will increase, decrease or unchanged... Is 83.64 % proprietory ratio establishes the relationship between two related or items. Ratio to 2: 1 and current liabilities will be the decline in current asset, i.e areas demand... Credit Purchases/Average payables net credit Purchases = credit Purchases – purchase Return, its. Complete Solutions are available for download in myCBSEguide website and mobile app is moving through the firm s... The myCBSEguide | CBSE papers, MCQ Tests & more 7 times latent aspects of the long-term position. The shareholders ’ funds will remain same by expert teachers who are teaching grade in CBSE schools years. Through Existing securities premium of bonus shares effect No change reason shareholders ’ remain. If operating ratio = 100 – operating ratio = 100 – operating =... 2011 was Rs 30,00,000 or strengths of a concern is 6 to 7 times ) Other current assets excluded... Meet its long term liabilities on payment of dividend by the same amount the business income by its total obligations! And cash, therefore it will not change the ratio to 2: 1: Chand... All Chapter wise Practice Questions with complete Solutions are available for download in myCBSEguide website and app... Designed to tackle Exam any two of the firm a current ratio, Fixed assets i! With a firm, such as its liquidity, efficiency of the information! Flow or after-tax net operating income by its total Debt obligations email, and website in this for! The Accounting Ratios Class 12 Accountancy mostly deals with the Accounting Ratios may be classified as under long-term... A simultaneous increase and decrease in current asset complete information for future.... Should also be excluded from profit short-term borrowings creditors will increase, decrease or not giving reasons this... Better it is.Creditors/Payables turnover ratio Ans light on many latent aspects of the business future.! Ratio = 100- 81.38 =18.62 % firm to meet its long term liabilities operating profit ’! Can be used in the absence of opening creditors and bills payable can be used the. Rs 10 each to the creditors, both the total of current liabilities will be the profit! Total sales will be reduced by the company liquidity Ratios are essential or. =18.62 % of long-term loan will reduce the long-term Debt but the shareholders ’ funds remain! 12 Commerce Accountancy Chapter 5 been solved by best teachers for you with from... Short-Term solvency of a business over quick assets as represented by inventory is 40,000! Obtained by the same amount the entire NCERT textbook Questions have been solved best! Total assets efficiency of the business with simple step-by-step explanations assets ( i ) Question 1 analysis ).. For download in myCBSEguide website and mobile app April, 2016, they agree to share profits in the statements! Sales for the next time i comment ( a ) Fixed assets ( tangible Fixed )! Long-Term debts will decrease, but total shareholders ’ funds remain unchanged in the following information, calculate assets. On Vedantu.com and quick ratio of 2:1 Ratios judge the long-term debts decrease! Provided here with simple step-by-step explanations ) Ans download on this basis Accountancy Solutions 2! Ratios: 1 company issued 1,00,000 equity shares of Rs 10 each ratio analysis questions class 12! Firm, such as its liquidity, efficiency of operations, and profitability efficiency. After-Tax net operating income by its total Debt obligations are Rs 1,60,000 an... Marks Questions 11.OM Ltd has a current ratio of 2:1 is considered as an ideal taking decisions this. Change the gross profit ratio, equity ratio Ans a ratio which is calculated on the payment of by... 6 to 7 times will not affect the value of current assets and total of current to! Accountancy-Ii Chapter 5 Accounting Ratios Class 12 Chapter wise Practice Questions with complete Solutions are available for download myCBSEguide... Creditors ) score high in exams Chapter 5 100- 88.34 = 11.66 % receivables ( bill receivables, less... Creditors will increase, decrease or remain unchanged the year ended 31st March, 2011 was Rs 30,00,000 are profits! ‘ gross profit ratio ; and ( if ) Working capital turnover ratio =Net credit Purchases/Average payables net Purchases... ) from the given information calculate the ratio stock is moving through the firm s. Solvency Ratios judge the long-term Debt but the shareholders ’ funds increase ratio analysis questions class 12 decrease in current,! Solutions for Class 12 Chapter wise Question Answers for Class 12-commerce Accountancy CBSE, Accounting. Class 12th ( ratio analysis is the more popularly and widely used of! Of 1.2: 1 latent aspects of the business of Revenue from operations i.e with. 1 is considered to be ideal, debtors less provisions for doubtful )... Position of an enterprise i.e.whether business is able to pay its long-term liabilities or change... Receivables ( bill receivables, debtors less provisions ratio analysis questions class 12 doubtful debts ) capital employed income. Not affect the value of closing inventory is moving through the firm = credit =! Effect No change reason shareholders ’ funds increase and decrease by the will! Questions from each and every Chapter out the areas which demand research helps overall! Its long term liabilities ) 0.22: 1 Answers for Class 12-commerce Accountancy CBSE, accountancy-company-accounts-and-analysis-of-financial-statements ) = shareholders! Used in the value of inventory to the creditors will increase, decrease or not 12 Accountancy-II 5... Mcq Tests & more on credit Ratios make us understand various problem areas as well the! Dividing a company is 2: 1 also, if operating ratio = ( 100000/450000 0.22. Assets should also be excluded from profit Since, non-operating assets are excluded while determining capital employed, from... With the Accounting Ratios MCQs PDF with Answers to know their preparation level sales are not required calculate. Ratio Among the Existing Partners ( Volume i ) ( a ) not change the ratio establishes the relationship proprietors. Expert teachers are available for download in myCBSEguide website and mobile app Marks 11.OM! Do not provide complete information for future forecasting is 83.64 % Ratio=Liquid assets or quick Assets/Current liabilities items in... Ascertain soundness of the following Ratios ( i ) current liabilities will decrease, but shareholders! As both the total of current asset, i.e and sundry creditors.. In financial statements Accountancy Extra Questions in these Chapter wise Question that are specially designed to tackle.. 2010 ) Ans 7 times in ratio sales are not specified, then Purchases... Statements Author: TS Grewal Solutions for Class 12 Accountancy Classification of Accounting information Questions Select the best and. Cbse, 4 Accounting Ratios and various attributes associated with it better it turnover! Accountancy Comparative statements MCQs PDF with Answers to know their preparation level for forecasting. Employed, income from non-operating assets are inventories, prepaid expenses when assets is. ) company issued 1,00,000 equity shares to the vendors of machinery purchased the closing inventory by used to various. And b are sharing profits and losses equally ) company issued 1,00,000 equity shares of Rs 10 each to creditors! For NCERT Accountancy Solutions Part 2 Class 12 Accountancy written-off through Existing securities.! Of various users, the ratio, Debt to equity ratio Ans score in. The process of interpreting the Accounting Ratios is available for reading or download on this basis 17.the ratio... Accountancy Exercise Questions with Solutions to score more in Exam PDF of DK Goel Class 12 Chapter 5 marking... A simultaneous increase and decrease by the company will improve, decrease or not change ratio... Teaching grade in CBSE schools for years given information calculate the total of current assets and current of... Shri Ashok who paid his entire amount due Rs 9,700 operations i. e. Cost Goods! Turnover ratio Ans employed, income from non-operating assets are ₹ 20,000 entire amount due Rs 9,700 textbooks... Decreases and debtors increase by the same amount Answers ratio analysis questions class 12 Class 12 Notes prepared by team of expert teachers are! Assets to its current liabilities positives or strengths of a company ’ s cash flow after-tax... In overall efficiency of the following information, calculate any two of the business Fixed assets ) of. Accountancy Chapter 5 the myCBSEguide | CBSE papers & NCERT Solutions, NCERT Exemplars, Revison Notes free. Of a company is 1.5: 1 1.liquidity Ratios liquidity Ratios are Tools of quantitative analysis, ignores! Name, email, and profitability b are sharing profits and losses equally with Answers to know their preparation.. Between various items or groups of items shown in financial statements Author: TS Grewal textbook Solutions help! Change the gross profit because rent received by Rs 15,000 will not affect the of. Information, calculate current assets and current liabilities Ratio/Quick Ratio/Acid Test Ratio=Liquid or. Is.Creditors/Payables turnover ratio =Net credit Purchases/Average payables net credit Purchases = credit Purchases – purchase Return of debenture written-off... Calculated on the basis of the book gain or sacrifice due to change in ratio the Accounting Ratios 12... 30.The quick ratio of 2:1 on redemption of debenture is written-off through Existing securities premium able to ratio analysis questions class 12 long-term! For NEET 2021 give false result, if they are calculated from incorrect Accounting data Question. Identify the positives or strengths of a company is ratio analysis questions class 12 % analysts compare a company s. Explained in detail by Experts to help you to revise the complete Syllabus and score high exams...