Question

Question 5: a. Calculate (i) debt-equity ratio and (ii) Liquid ratio iii) Turnover ratios from the following balance sheet and additional information. Balance Sheet Liabilities Amount - £ Assets Amount - £ Equity shares of £ 10 each 100,000 Goodwill 60,000 Reserves 20,000 Fixed Assets at cost 140,000 Profit and loss account 30,000 Stock 30,000 Secured loan 80,000 Sundry debtors 30,000 Sundry Creditors 50,000 Advances 10,000 Provision for taxation 20,000 Cash 30,000 300,000 300,000 The sales for the year were £ 560,000 and 25% was on cash. Opening Stock & Debtors is 18,000 each.

Question 5:
a. Calculate (i) debt-equity ratio and (ii) Liquid ratio iii) Turnover ratios from the following balance sheet and additional information.
Balance Sheet
Liabilities Amount - £ Assets Amount - £
Equity shares of £ 10 each 100,000 Goodwill 60,000
Reserves 20,000 Fixed Assets at cost 140,000
Profit and loss account 30,000 Stock 30,000
Secured loan 80,000 Sundry debtors 30,000
Sundry Creditors 50,000 Advances 10,000
Provision for taxation 20,000 Cash 30,000
300,000 300,000
The sales for the year were £ 560,000 and 25% was on cash. Opening Stock & Debtors is 18,000 each.

Answer 1

Sdultos Ralios au calculated from the e'ncome Statement ord balance sheet, Yue there are various galios are Calculated. Yue tum Ilatiós énelude deblolsotwenouer Itali, stocke tinguer Sailio, tual assets. Turnover Itcilio freid assets tumower Halig crnd average Collections perigol. Ratio's are calculated below: O debt - Equila Italia total liability Slock holdere equiely s Sunday Cudilos prevision for taxatecs tseemed loans Equily share copilăl + Reseovet profit pless. = 250,000 -- 220000 fz 80,000 4 100,000 -67 20,000+7 30,000 - 2150,000 11501070 debt -Equily Halio =1:1

① liquid ralio - Quick Assets Currut labilely - Cash + sundry debtors Simcay Cecclelor's t provision for Taralan - 230,00 - 230,000 450,000 + Z201010 7 60,000 7 70,000 0.86 I liquid ratio = 0861 Noter astone and Advance an illiquido desels so, they are not taken in Caleulating liquid Malio. cm Yum ouer gatuor Accoemt tien ouee ralio ation Med ledit sale ccount receivable Net nedit Carol) sale. 1560.000 - cash Sale - 2 5,60,000 -2140,000 = { 4720109 4120.000 218000 - 230, DVD 24120,00 Z 04.07 10. Times :

© Stock Luencues Galluss s cost of goods sold duerage stocle o . sales Ending stock • 5,60,000 130,om = 18.67 times © Tolet Assets twen ouer Italia - Net Sales Total assets 2 56,000 7 30,000 = 1187 times fixed Assets Eleven Quer galia a net sales fixed assets 756,0000 Z 1.40, ond z a timies &

© Average colleclosi periods Days in a year Debtol Turower ratio s 365 10 times = 36.5 a 37 Days