177 :- From the following information, calculate:
(i) Return on Investment Ratio
(ii) Net Assets Turnover Ratio
Solution :-
(i) Interest = 10% Debentures
= 10/100 x 4,00,000
= Rs 40,000
Net Profit Before Interest and Tax = Net Profit after Interest and Tax + Tax + Interest
= 2,40,000 + 1,60,000 + 40,000
= Rs 4,40,000
Capital Employed = Equity Share Capital + 15% Preference Share Capital + Reserves and Surplus + 10% Debentures
= 5,00,000 + 1,00,000 + 2,00,000 + 4,00,000
= Rs 12,00,000
Return on Investment = Profit Before Interest and Tax/Capital Employed x 100
= 4,40,000/12,00,000 x 100
= 36.67%
(ii) Net Assets Turnover Ratio = Revenue from Operation/Capital Employed
= 24,00,000/12,00,000
= 2 Times