180 :- On the basis of the following information, calculate:
(i) Gross Profit Ratio;
(ii) Working Capital Turnover Ratio
(iii) Debt to Equity Ratio; and
(iv) Proprietary Ratio
Solution :-
(a) Gross Profit = Revenue from Operation – Cost of Revenue from Operation
= 5,00,000 – 3,00,000
= Rs 2,00,000
Gross Profit Ratio = Gross Profit/Revenue from Operation x 100
= 2,00,000/5,00,000 x 100
= 40%
(b) Working Capital = Current Assets – Current Liabilities
= 2,00,000 – 1,40,000
= Rs 60,000
Working Capital Ratio = Revenue from Operation/Working Capital
= 5,00,000/60,000
= 8.33 Times
(c) Debt – Equity Ratio = Debt/Equity
= 1,00,000/2,50,000
= 0.4 : 1
(d) Total Assets = Paid up Share Capital + 13% Debentures + Current Liabilities
= 2,50,000 + 1,00,000 + 1,40,000
= Rs 4,90,000
Proprietary Ratio = Shareholder’s Funds/Total Assets
= 2,50,000/4,90,000
= 0.51 : 1