183 :- From the following information related to Naveen Ltd., calculate (a) Return on Investment and (b) Total Assets to Debt Ratio :
Information : Fixed Assets Rs 75,00,000; Current Assets Rs 40,00,000; Current Liabilities Rs 27,00,000; 12% Debentures Rs 80,00,000 and Net Profit before Interest, Tax and Dividend Rs 14,50,000.
Solution :-
(a) Capital Employed = Fixed Assets + Current Assets – Current Liabilities
= 75,00,000 + 40,00,000 – 27,00,000
= Rs 88,00,000
Return on Investment = Profit before Tax, Interest and Dividend/Capital Employed x 100
= 14,50,000/88,00,000 x 100
= 16.48%
(b) Total Assets = Fixed Assets + Current Assets
= 75,00,000 + 40,00,000
= Rs 1,15,00,000
Debt = 12% Debentures
= Rs 80,00,000
Total Assets to Debt Ratio = Total Assets/Debt
= 1,15,00,000/80,00,000
= 1.44 : 1