ISC Class 12th Accountancy Chapter 5 - Ratio Analysis Important Questions with Answers

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State whether creditors would prefer lending to a company with a high Debt-Equity Ratio or a low Debt-Equity Ratio. Give a reason.

Question 2.

The Adani family has raised their stake in Ambuja Cements by the conversion of 21.20 crore warrants into shares in a transaction that will see them infusing nearly ? 6,661 crore.

What is a share warrant?
Mention the head under which Money received against Share Warrants is shown in the Balance Sheet of a company prepared as per Schedule III of the Companies Act, 2013.

Question 3.

According to the ratings agency Chrisil, healthy demand for grocery items and expansion into tier II and III cities will help organized brick-and-mortar food and grocery (F&G) retailers log a revenue of 14-15% in FY25. The agency further said the debt raising will be capped to ensure healthy key debt protection metrics.

From the following ratios:

Choose the formula of the ratio to be used by the F&G retailers as a debt protection metrics
Mention the name of the ratio so chosen

`"Revenue from Operations"/"Working Capital"`

`"Cost of Revenue from Operation + Operating Expenses"/"Revenue from Operations"xx 100`

`"Net Profit before interest and taxes"/"Fixed Interest Charges"`

`"Net Profit after Tax and Preference Dividend"/"No. of Equity Shares"`

Question 4.

Read the following news item of ITC Ltd. and answer the question that follows:

The company’s board declared an interim dividend of ? 6.25 per share for the financial year ending March, 2024. The dividend will be paid between February 26-28, 2024, to the eligible shareholders.

Which of the following are the attributes of interim dividend?

P: It is a charge against profits.

Q: It is an appropriation of profits.

R: Its declaration and payment will decrease the company’s Current Ratio.

S: Its declaration and payment will increase the company’s Debt Equity Ratio.

Only P

Only Q

P, R and S

Q, R and S

Question 5.

Bajaj Hindustan Sugar, one of the largest sugar and ethanol producers, in order to revive the company, has offered to invest ? 2,500 crore as fresh equity of which ? 1,000 crore has already been infused.

What will be the effect of this decision of Bajaj Hindustan Sugar on its DebtEquity Ratio?

Question 6.

Calculate Interest Coverage Ratio of Criss Cross Ltd. (up-to two decimal places) from the following information:

Particulars	(?)
Net Profit after Interest and Tax	? 80,000
Tax Rate	50%
12% Debentures	? 3,00,000
9% Bank Loan	? 1,00,000

Question 7.

Mention whether the following Trade Payable are current liability or non current liability:

Operating Cycle	Expected Period of Payment
15 months	12 months

Question 8.

The Quick Ratio of a company is 0.8 : 1. State whether the Quick Ratio will improve, decline or will not change in the following cases:
(i) Cash collected from Debtors ? 50,000.
(ii) Creditors of ? 20,000 paid off.

Question 9.

Calculate Trade Payables Turnover Ratio (up-to two decimal places) from the following information:

Particulars	(?)
Trade Payables at the beginning of the year	70,000
Trade Payables at the end of the year	80,000
Payment to Trade Payables	3,20,000
Returns to Credit suppliers	30,000

Question 10.

Calculate the Working Capital Turnover Ratio of Moonlight Ltd., (up-to two decimal places) from the following particulars.

Particulars
Cash	? 10,00,000
Short-term Loans and Advances	? 3,00,000
Inventory	? 2,00,000
Trade Payables	? 5,00,000
Cost of Revenue from operations	? 12,00,000
Gross Profit on Cost of Revenue from Operations	25%

Question 1.

The spreadsheet below shows the sales of Jupiter Ltd. made by four salesmen in the four quarters of the financial year 2022-23:

	A	B	C	D	E	F	G
1	Sales in ?
2	Salesman No.	Qtr 1	Qtr 2	Qtr 3	Qtr 4	Total Sales	Commission @ 10% of sales (?)
3	S1	6,000	7,000	??	9,000
4	S2	8,000	9,000	8,200	8,500	33,700
5	S3	9,600	8,400	9,200	9,500	36,700	??
6	S4	??	7,600	8,000	12,000
7	Total

Based on the above transactions and the information given in the spreadsheet, answer the following question:

Write the formula to calculate the cost of the goods sold by Salesman No. S2 in Qtr 2, if he had sold the goods at a profit of 10% of the sales.
Write the formula to calculate the sales made by Salesman No. S2 in Qtr 3 in cell D3, if he had sold the goods at a profit of 10% of the cost.
In Qtr 1, Salesman No. S4 sold goods costing ? 8,800 at a loss of 10% of the sales. What is the selling price of the goods in cell B6.
The company gives a commission of 10% on its total sales. Write the formula to calculate the commission earned by Salesman No. S3 in cell G5.

Question 2.

From the following information calculate the following ratios (up to two decimal places):

Earning per share
Price Earning Ratio
Return on Investments
Working Capital Turnover Ratio

Particulars	?
Net profit after Interest and Tax	2,40,000
Tax	1,60,000
Property, Plant and Equipment	10,00,000
Non-current Investments (Non-Trade)	1,00,000
Equity Share Capital (face value ? 10 per share)	5,00,000
15% Preference Share Capital	1,00,000
Reserves and Surplus (including surplus of the year under consideration)	2,00,000
10% Debentures	4,00,000
Revenue from Operations	10,00,000
Working Capital	1,00,000