1. The following is the Balance Sheet of New India Ltd., for the year ending Dec.31, 2005:

Liabilities Amount (Rs.)

Assets Amount (Rs.)

9%Preference Share Capital.Equity Share Capital8%DebenturesLong – Term LoansBills PayableSundry CreditorsBank OverdraftOutstanding Expenses

5,00,00010,00,0002,00,0001,00,00060,00070,00030,000

5,000

GoodwillLand and BuildingPlantFurniture’s and FixturesBills ReceivableSundry DebtorsBank BalanceShort-term InvestmentsPrepaid ExpensesStock

1,00,0006,50,0008,00,000

1,50,00070,00090,00045,000

25,0005,00030,000

19,65,000 19,65,000

From the Balance Sheet Calculate: Current Ratio. Acid-Test Ratio Absolute liquid Ratio Comment on these ratios.

2. The following information of a company is given:Current Ratio- 2.5:1 , Acid-test ratio – 1.5:1 , Current liabilities Rs.50,000.Find out:

Current Assets Liquid Assets Inventory.

3. The following information is given about M/s S.P. Ltd. For the year ending Dec 31,2007:

Stock turnover ratio = 6times Gross Profit Ratio = 20% on sales. Sales for 2007 = Rs. 3,00,000 Closing Stock is Rs. 10,000 more than opening stock. Opening Creditors = Rs. 20,000 Closing Crsditors = Rs. 30,000 Trade Debtors at the end = Rs. 60,000 Net Working Capital = Rs. 50,000Find out:(i) Average Stock

(ii) Purchases(iii) Creditors Turnover Ratio(iv) Average Payment Period(v) Average Collection Period(vi) Working Capital Turnover ratio.

4. Following particulars pertaining to assets and liabilities of a company are given:

Liabilities Amount (Rs.)

Assets Amount (Rs.)

2,000, 8%Preference Share of Rs.100 each fully paid up

2,500 Equity Share of Rs.100 each fully paid-up

3,000, 9%Debentures of Rs.100 each

Reserves

Current Liabilities

2,00,000

2,50,000

3,00,000

2,00,000

2,00,000

Land and BuildingPlant and MachinerySundry DebtorsCash and Bank BalancePrepaid ExpensesStock in trade

4,50,0004,00,0001,00,00045,0005,0001,50,000

11,50,000 11,50,000

Calculate(i) Debt-Equity Ratio.(ii) Funded Debt to Total Capitalization(iii) Proprietary Ratio.(iv) Solvency Ratio(v) Fixed Assets to Net Worth Ratio(vi) Current Assets to Proprietors fund ratio.

5. Issued and Subscribed Capital: 2,000 equity shares of Rs. 100 each 2, 00,0001,000 8% Preference shares of Rs. 100 each 1, 00,000

3,00,000Reserves and Surplus:Revenue Reserve 30,000Capital Reserve 50,000Reserve for contingencies 20,000

1, 00,000Net Profit before interest and tax 1, 50,000Interest charges 30,000Tax Rate 50%Calculate return on shareholders’ investment.

6. Compute the return on capital employed (total assets basis) from the following information relating to companies X and Y:

Company X Company Y Net Sales for the year Rs. 2, 75,000 ?

Total Assets ? Rs. 42,500 Net Profit on sales 4% 19% Turnover of total assets 6 times ? Gross Margin 38% Rs. 4,680 (25%)