To calculate the given ratios, we need to use the provided information and formulae for each ratio. Let's go through each one:
i) Operating Ratio: Operating Ratio = (Operating Expenses / Net Sales) * 100
Operating Expenses = Purchases + Wages + Selling and Distribution Expenses Net Sales = Sales - Closing Stock
Operating Expenses = 2,50,000 + 15,000 + 3,000 = 2,68,000 Net Sales = 4,00,000 - 26,000 = 3,74,000
Operating Ratio = (2,68,000 / 3,74,000) * 100 Operating Ratio ≈ 71.65%
ii) Current Ratio: Current Ratio = Current Assets / Current Liabilities
Current Assets = Opening Stock + Purchases + Other Current Assets Current Liabilities = Current Liabilities
Current Assets = 24,000 + 2,50,000 + 1,00,000 = 3,74,000 Current Liabilities = 75,000
Current Ratio = 3,74,000 / 75,000 Current Ratio ≈ 4.987
iii) Stock Turnover Ratio: Stock Turnover Ratio = Cost of Goods Sold / Average Stock
Cost of Goods Sold = Opening Stock + Purchases - Closing Stock Average Stock = (Opening Stock + Closing Stock) / 2
Cost of Goods Sold = 24,000 + 2,50,000 - 26,000 = 2,48,000 Average Stock = (24,000 + 26,000) / 2 = 25,000
Stock Turnover Ratio = 2,48,000 / 25,000 Stock Turnover Ratio = 9.92 times
iv) Debt Equity Ratio: Debt Equity Ratio = Total Debt / Total Equity
Total Debt = Preference Share Capital + Debentures Total Equity = Equity Share Capital + General Reserve
Total Debt = 2,00,000 + 1,20,000 = 3,20,000 Total Equity = 2,50,000 + 20,000 = 2,70,000
Debt Equity Ratio = 3,20,000 / 2,70,000 Debt Equity Ratio ≈ 1.185
So, the calculated ratios are: i) Operating Ratio ≈ 71.65% ii) Current Ratio ≈ 4.987 iii) Stock Turnover Ratio ≈ 9.92 times iv) Debt Equity Ratio ≈ 1.185
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