Saved Bookmarks
| 1. |
From the following information calculate (i) Debt equity ratio (ii) Working Capital Turnover Ratio.ParticularsRs.Net revenue from operation60,00,000Cost of revenue from operation45,00,000Other current assets11,00,000Current liabilities4,00,000Paid up share capital6,00,0006% debentures3,00,0009% loan1,00,000Debenture Redemption Reserve2,00,000Closing Inventors1,00,000 |
|
Answer» (i) Debt Equity Ratio = Debit/Equity Debt = 6% debentures + 9% loan = Rs. 3,00,000 + Rs. 1,00,000 = Rs. 4,00,000 Equity = Paid up share capital + Debenture Redemption Reserve = 6,00,000 + 2,00,000 = 8,00,000 Debt Equity Ratio = 4,00,000/8,00,000 = 0.5 = 1 (ii) Working Captial Turnover Ratio = (Net Revenue form operation)/(Working Captial ) Working Capital = Other Current Assets + Closing Inventors – Current Liabilities = Rs. 11,00,000 + Rs. 1,00,000 – Rs. 4,00,000 = 8,00,000. Working capital turnover Ratio = 60,00,000/8,00,000 =7.5 times |
|