173 :- Calculate Revenue from Operations of BN Ltd. From the following information :
Current Assets Rs 8,00,000
Quick Ratio is 1.5 : 1
Current Ratio is 2 : 1
Inventory Turnover Ratio is 6 Times.
Goods were sold at a profit of 25% on cost.
Solution :-
Current Ratio = Current Assets/Current Liabilities
2 = 8,00,000/Current Liabilities
Current Liabilities = Rs 4,00,000
Quick Ratio = Quick Assets/Current Liabilities
1.5 = Quick Assets/4,00,000
Quick Assets = Rs 6,00,000
Quick Assets = Current Assets – Inventory
6,00,000 = 8,00,000 – Inventory
Inventory = Rs 2,00,000
Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory
6 = Cost of Goods Sold/2,00,000
Cost of Goods Sold = Rs 12,00,000
Gross Profit = Revenue from Operations – Cost of Goods Sold
25/100 x 12,00,000 = Revenue from Operations – 12,00,000
3,00,000 + 12,00,000 = Revenue from Operations
Revenue from Operations = Rs 15,00,000