Accounting Ratios Practical
Problems
1. Current Ratio 2.5; Working Capital Rs. 60,000. Calculate the
amount of Current Assets and Current Liabilities.
2. X Ltd. has a Current Ratio 3.5 : 1 and Quick Ratio 2 : 1. If
the stock is Rs. 24,000; Calculate the total Current Liabilities and Current
Assets.
3. XYZ Ltd. stock is Rs. 3,00,000. Total Liquid Assets are Rs.
12,00,000 and Quick Ratio is 2 : 1. Work out of the Current Ratio.
4. A Limited Liquidity Ratio is 2.5 : 1. Stock is Rs. 6,00,000.
Current Ratio is 4 : 1. Find out the Current Liabilities.
5. Current Liabilities of a company are Rs. 6,00,000. Its Current
Ratio is 3 : 1 and Liquid Ratio is 1 : 1. Calculate the value of
StockinTrade.
6. Current Liabilities of a company are Rs. 1,50,000. Its Current
Ratio is 3 : 1 and Acid Test Ratio (Liquid Ratio) is 1 : 1. Calculate the
values of Current Assets, Liquid Assets and Inventory.
7. Current Ratio 4; Liquid Ratio 2.5; Inventory Rs. 6,00,000.
Calculate the Current Liabilities, Current Assets and Liquid Assets.
8. X Ltd. had a Current Ratio of 4.5 : 1 and a Quick Ratio of 3 :
1. If its inventory is Rs. 36,000, find out its total Current Assets and Total
Current Liabilities.
9. Quick assets Rs. 1,50,000; Inventory Rs. 40,000; Prepaid
Expenses Rs. 10,000; Working Capital Rs. 1,20,000. Calculate Current Ratio.
10. Current Assets Rs. 3,00,000; Stock Rs. 45,000; Prepaid
Expenses Rs. 15,000; Working Capital Rs. 2,52,000. Calculate the Quick Ratio.
[Quick Ratio = 5 : 1]
11. From the following information, calculate Current Ratio and
acidtest ratio:
Particulars

Amount

Particulars

Amount

Inventory
Debtors
Cash
Creditors
Bills receivable
Advance Tax
Bills Payable
Bank overdraft
Debentures
Accrued Interest

55000
40000
37000
48000
20000
4000
28000
4000
200000
4000

Marketable
securities(Short term investment)
Provision for
bad debt
Income received
in advance
Coins
Cheque and
Draft in hand
Treasury bills
Purchased
Dividend
payable
Sales tax
payable
Provision for
tax
Interest due on
debentures

10000
5000
5000
2000
5000
6500
2000
2000
2000
5000

12. Calculate AcidTest Ratio from the
following: Current Assets
Rs.50000. Current assets include the following: Stock Rs.14000. Prepaid
Expenses Rs. 1000. Current liabilities Rs.20000. Current liabilities include
Bank overdraft Rs.5000.
Debt Equity Ratio,
Proprietary ratio and ratio of total asset to debt:
Q. Calculate Debt Equity Ratio,
Proprietary ratio and ratio of total asset to debt:
Particulars

2012
(Rs.)

2013
(Rs.)

I. EQUITY AND
LIABILITIES
1.
Shareholder’s Funds
a)
Share Capital
b)
Reserve and Surplus
2.
NonCurrent Liabilities 
Longterm Borrowings (12% Loan)
3.
Current Liabilities
a)
Shortterm Borrowings
b)
Trade Payables
c)
Shortterm Provisions

7,50,000
4,50,000
7,50,000
1,75,000
1,00,000
25,000

15,00,000
3,00,000
12,00,000
3,50,000
2,00,000
50,000

Total

22,50,000

36,00,000

II. ASSETS
1.
NonCurrent Assets
Fixed
Assets (Tangible)
2.
Current Assets
a)
Inventories
b)
Trade Receivables
c)
Cash and Cash Equivalents

15,00,000
2,50,000
4,50,000
50,000

22,50,000
4,50,000
8,00,000
1,00,000

Total

22,50,000

36,00,000

Stock Turnover Ratio or
Inventory Turnover Ratio
1. From the following details, calculate the Inventory Turnover
Ratio:
Cost of Goods Sold
Inventory in the beginning of the year
Inventory at the close of the year

4,50,000
1,25,000
1,75,000

2. Opening Inventory Rs. 76,250; Closing Inventory Rs. 98,500;
Revenue from Operations, i.e. Sales Rs. 5,20,000; Sales Returns Rs. 20,000;
Purchases Rs. 3,22,250. Calculate the Stock or Inventory.
3. Calculate the Stock or Inventory Turnover Ratio from the data
given below:
Inventory in the beginning of the year
Inventory at the end of the year
Purchases

20,000
10,000
50,000

Carriage Inwards
Revenue from Operations, i.e. Sales

5,000
1,00,000

4. From the following details, calculate the value of Opening
Inventory.
Closing Inventory
Total Sales
Total Purchases
Goods are sold at a profit of 25% on cost.

68,000
4,80,000
(including Cash Sales Rs. 1,20,000)
3,60,000
(including Credit Purchases Rs. 2,39,200)

5. Calculate the Stock or Inventory Turnover Ration from the
following:
Opening Inventory
Closing Inventory
Revenue from Operations, i.e. Sales

29,000
31,000
3,20,000

6. From the following information, determine the Opening and
Closing Inventories: Inventory Turnover Ratio 5 Times, Total Sales Rs.
2,00,000, Rate of Gross Profit on Sales 25%. Inventory is more by Rs. 4,000
than the Opening Inventory.
7. Rs. 2,00,000 is the Cost of Goods Sold i.e. Cost of Revenue
from Operations during 201112. If Inventory Turnover Ratio is 8 times,
calculate the inventories at the end of the year. Inventories at the end are
1.5 times than that in the beginning.
8. Sales (Revenue from Operations) Rs. 4,00,000; Gross Profit Rs.
1,00,000; Closing Inventory Rs. 1,20,000; Excess of Closing Inventory over
Opening Inventory Rs. 40,000. Calculate the Stock or Inventory Turnover Ratio.
9. Cost of Goods Sold i.e. (Revenue from Operations) Rs. 5,00,000;
Purchase Rs. 5,50,000; Opening Inventory Rs. 1,00,000. Calculate the Stock
Turnover Ratio.
10. Following figures have been extracted from Shivalika Mills
Ltd.:
Stock in the beginning of the year Rs. 60,000;
Inventory at the end of the year Rs. 1,00,000.
Inventory Turnover Ratio 8 Times;
Selling price 25% above cost.
Compute the amount of Gross Profit and Sales (Revenue from
Operations).
11. Following figures have been extracted from Shivalika Mills
Ltd.:
Stock in the beginning of the year Rs. 60,000;
Inventory at the end of the year Rs. 1,00,000.
Inventory Turnover Ratio 8 Times;
Selling price 25% Sales.
Compute the amount of Gross Profit and Sales (Revenue from
Operations).
12. Stock Turnover Ratio 5 times; Cost of Goods Sold Rs.
18,90,000. Calculate the Opening Inventory and Closing Inventory if Inventory
at the end is 2.5 times more than that in the beginning. [Opening Inventory – Rs. 1,68,000 and
Closing Inventory – Rs. 5,88,000]
13. Rs. 3,00,000 is the Cost of Goods Sold. Inventory Turnover
Ratio 8 times; Inventory in the beginning is 2 times more than the Inventory at
the end. Calculate the value of Opening and Closing Inventories. [Opening Inventory – Rs. 56,250 and
Closing Inventory – Rs. 18,750]
14. From
the given information, calculate the stock Turnover Ratio: Sales = Rs. 4,
00,000; Gross Profit Ratio=25%; Opening Stock was 1/3^{rd} of the value
of the Closing stock. Closing Stock was 30% of Sales.
Debtors’
Turnover Ratio
1. Compute the Debtors’ turnover Ratio from the following:
Gross Sales (Revenue from Operations)
Debtors in the beginning of year
Debtors at the end of year
Sales Return

9,00,000
83,000
1,17,000
1,00,000

7,50,000
1,17,000
83,000
50,000

2. Rs. 1,75,000 is the Net Sales (i.e. Revenue from Credit Sales)
of a concern during 201112. If Debtors’ turnover Ratio is 8 times, calculate
debtors in the beginning and at the end of the year. Debtors at the end is Rs.
7,000 more than that in the beginning.
Creditors’
Turnover Ratio or Payable Turnover Ratio
1. Calculate the Creditors’ Turnover Ratio for the year 201112 in
each of the alternative cases:
Case 1: Closing Trade Payable Rs. 35,000; Net Purchases Rs.
3,60,000; Purchases Return Rs. 60,000; Cash Purchases Rs. 90,000.
Case 2: Opening Trade Payables Rs. 15,000; Closing Trade Payables
Rs. 45,000; Net Purchases Rs. 3,60,000.
Case 3: Closing Trade Payables Rs. 45,000; Net Purchases Rs.
3,60,000.
Case 4: Closing Trade Payables (including Rs. 25,000due to a
supplier of machinery) Rs. 55,000; Net Credit Purchases Rs. 3,60,000.
2. Calculate the Creditors’ Turnover Ratio and Average Debt
Payment Period for the year 201112 from the following information:
Sundry Creditors
Bills Payable

1^{st}
April, 2011
Rs.
1,50,000
50,000

31^{st}
March, 2012
Rs.
4,50,000
1,50,000

Total Purchases Rs. 21,00,000; Purchases Return Rs. 1,00,000; Cash
Purchases Rs. 4,00,000.
Gross
Profit Ratio
1. From the following, calculate the Gross Profit Ratio: Gross Profit: Rs. 50,000; Revenue from
Operations, i.e. Sales Rs. 5,50,000; Sales Return: Rs. 50,000.
2. (i) Compute the Gross Profit Ratio from the following
information: Cost of Goods Sold Rs. 5,40,000; Net Sales (Revenue from
Operation) Rs. 6,00,000; Sales Return Rs. 10,000.
(ii) Compute the Gross Profit Ratio from the following
information: Revenue from Operations, i.e. Sales = Rs. 4,00,000; Gross Profit
25% on Cost.
3. (i) Revenue from Operations: Cash Sales Rs. 4,20,000; Credit
Sales Rs. 6,00,000; Return Rs. 20,000. Cost of Goods Sold Rs. 8,00,000.
Calculate the Gross Profit Ratio.
(ii) Average Inventory Rs. 1,60,000; Stock Turnover Ratio 6 Times;
Selling Price 25% above cost. Calculate the Gross Profit Ratio.
(iii) Opening Inventory Rs. 1,00,000; Closing Inventory Rs.
60,000; Stock Turnover Ratio 8 Times; Selling Price 25% above cost. Calculate
the Gross Profit Ratio.
Operating
Ratio
1. Cost of Goods Sold Rs. 3,00,000. Operating
Expenses Rs. 1,20,000. Revenue from Operations: Cash Sales Rs. 5,20,000; Return Rs. 20,000. Calculate
the Operating Ratio.
2. From the following details, calculate the
Operating Ratio:
Cost of Goods Sold
Operating Expenses

Rs.
52,000
18,000

Revenue from Operations (Sales)
Sales Return

Rs.
88,000
8,000

3. Operating Ratio 92%; Operating Expenses Rs.
94,000; Revenue from Operations, i.e. Sales Rs. 6,00,000; Sales Return Rs.
40,000. Calculate the Cost of Goods Sold.
4. (i) Cost of Goods Sold Rs. 2,20,000; Net
Revenue from Operations i.e. Sales Rs. 3,20,000; Selling Expenses Rs. 12,000; Office Expenses Rs. 8,000;
Depreciation Rs. 6,000. Calculate the Operating Ratio.
(ii) Net Revenue from Operations, i.e. Cash
Sales Rs. 4,00,000; Credit Sales Rs. 1,00,000; Gross Profit Rs. 1,00,000;
Office and Selling Expenses Rs. 50,000. Calculate the Operating Ratio.
Operation
Profit Ratio
1. Calculate the Operating Profit Ratio in
each of the following alternatives cases:
Case 1: Sales (Net Revenue from Operations)
Rs. 10,00,000; Operating Profit Rs. 1,50,000.
Case 2: Sales (Net Revenue from Operations)
Rs. 6,00,000; Operating Cost Rs. 5,10,000.
Case 3: Sales (Net Revenue from Operations)
Rs. 3,60,000; Gross Profit 20% on sales; Operating Expense Rs. 18,000.
Case 4: Sales (Net Revenue from Operations)
Rs. 4,50,000; Cost of Goods Sold Rs. 3,60,000; Operating Expenses Rs. 22,500.
Case 5: Cost of Goods Sold Rs. 8,00,000; Gross
Profit 20% on Sales; Operating Expenses Rs. 50,000.