Solution for Q 121 to 130 of Chapter 4 of Book 3 - Analysis of Financial Statements of T S Grewal Class 12 Accountancy 2026-27 are given below. The Chapter name is Ratio Analysis class 12. These Solutions are based on topics trade payables turnover ratio, calculation of opening and closing trade payables, working capital turnover ratio, fixed assets turnover ratio and Net assets turnover ratio
Working notes are given with each solution. These help in understanding the steps and are also important for board exams as marks are given for steps.Debt equity ratio is a key ratio is finfing the long term solvency of any business and is critical business health parameter. A higher debt equity ratio is generally considered unhealthy for business as it indicates higher dependency on external funds and future solvency problems may arise.
These solutions are also useful for CA Foundation, CS Foundation and CMA Foundation students. The solutions will be helpful for students as well as teachers teaching class 12 accounts.
Question 121
| Step 1 |
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| Let the Cost of Goods Sold |
100 |
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| Gross Profit |
25 |
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| Revenue from operations |
125 |
(100+25) |
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| Revenue from operations |
= |
125 / 25 X 500000 |
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= |
2500000 |
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| Note : Prepare a balance sheet to find the working capital |
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| Alternately Working capital can also be found directly by using the formula |
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| Liabilities |
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Amount |
Assets |
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Amount |
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| Share Capital |
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1000000 |
Fixed Assets |
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1000000 |
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| Reserves and Surplus |
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200000 |
Working Capital |
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500000 |
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| Long Term Loan |
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300000 |
(Balancing Figure) |
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| Total |
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1500000 |
Total |
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1500000 |
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| Working Capital = (Shareholder Funds + Non Current Liabilities) - Non Current Assest |
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| Working Capital = Cap Emp - NCA |
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| Step 3 |
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| Working Capital |
= |
Revenue from operations |
/ |
Working Capital |
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| Turnover Ratio |
2500000 |
/ |
500000 |
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= |
5 |
Times |
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▶ Video Solution: Coming Soon
Question 122
| Step 1 |
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| Let the Cost of Goods Sold |
100 |
| Gross Profit |
25 |
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| Revenue from operations |
125 |
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| Revenue from operations |
= |
125 / 25 X 500000 |
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= |
2500000 |
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| Step 2 |
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| Liabilities |
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Amount |
Assets |
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Amount |
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| Share Capital |
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1000000 |
Non Current Assets |
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1000000 |
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| Reserves and Surplus |
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200000 |
Current Assets |
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500000 |
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| Long Term Loan |
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300000 |
(Balancing Figure) |
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| Current Liabilities |
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| Total |
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1500000 |
Total |
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1500000 |
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| Alternate Method to find Current Assets : |
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| Total |
= |
Equity Share |
+ |
Reserves & |
+ |
Long term |
| Liabilities |
Capital |
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Surplus |
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Loan |
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= |
1000000 |
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+ |
200000 |
+ |
300000 |
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= |
1500000 |
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| Total |
= |
Total Liabilities |
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| Assets |
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= |
1500000 |
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| Total |
= |
Non Current Assets |
+ |
Current Assets |
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| Assets |
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| 1500000 |
= |
1000000 |
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+ |
CA |
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| CA |
= |
Total Assets |
- |
Non Current Assets |
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1500000 |
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1000000 |
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= |
500000 |
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| Step 3 |
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| Working |
= |
Revenue from |
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Working Capital |
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| Capital Turnover Ratio |
operations |
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2500000 |
/ |
500000 |
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= |
5 |
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Times |
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▶ Video Solution: Coming Soon
Question 123
| Fixed Assets |
= |
Revenue from |
/ |
Net Fixed Assets |
| Turnover Ratio |
Operations |
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= |
2500000 |
/ |
500000 |
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= |
5 |
Times |
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▶ Video Solution: Coming Soon
Question 124
| Step 1 |
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| Revenue from |
= |
Cash Revenue |
+ |
Credit Revenue |
| Operations |
From Operations |
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From Operations |
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= |
100000 |
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+ |
1700000 |
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= |
1800000 |
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| Step 2 |
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| Net Fixed Assets |
= |
Fixed Assets |
- |
Accumulated |
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(At Cost) |
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Depreciation |
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= |
700000 |
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- |
100000 |
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= |
600000 |
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| Step 3 |
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| Fixed Assets Turnover |
= |
Revenue from |
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Net Fixed Assets |
| Ratio |
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Operations |
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= |
1800000 |
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/ |
600000 |
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= |
3 |
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Times |
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▶ Video Solution: Coming Soon
Question 125
| Step 1 |
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| Revenue from |
= |
Cost of Revenue |
+ |
Gross Profit |
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| Operations |
From Operations |
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= |
800000 |
+ |
200000 |
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= |
1000000 |
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| Liabilities |
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Amount |
Assets |
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Amount |
| Capital Employed |
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250000 |
Working Capital |
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50000 |
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Net Fixed Assets |
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200000 |
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(Balancing Figure) |
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| Total |
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250000 |
Total |
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250000 |
| Alternately, use the formula for working capital |
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| Working Capital = Capital Employed - Net Fixed Assets |
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| WC = 250000 - 50000 |
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| Working Capital = 200000 |
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| Step 3 |
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| Fixed Assets |
= |
Revenue from |
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Net Fixed Assets |
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| Turnover Ratio |
Operations |
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= |
1000000 |
/ |
200000 |
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= |
5 |
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Times |
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▶ Video Solution: Coming Soon
Question 126
| Step 1 |
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| Revenue from |
= |
Cost of Revenue |
+ |
Gross Profit |
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| Operations |
From Operations |
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= |
4000000 |
+ |
1000000 |
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= |
5000000 |
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| Liabilities |
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Amount |
Assets |
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Amount |
| Capital Employed |
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3000000 |
Working Capital |
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500000 |
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Net Fixed Assets |
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2500000 |
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(Balancing Figure) |
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| Total |
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3000000 |
Total |
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3000000 |
| Alternately, use the formula for working capital |
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| Working Capital = Capital Employed - Net Fixed Assets |
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| WC = 3000000-500000 |
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| Working Capital = 2500000 |
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| Step 3 |
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| Fixed Assets |
= |
Revenue from |
/ |
Net Fixed Assets |
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| Turnover Ratio |
Operations |
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= |
5000000 |
/ |
2500000 |
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= |
2 |
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Times |
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▶ Video Solution: Coming Soon
Question 127
| 2024-2025 |
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| Fixed Assets |
= |
Cost of |
/ |
Net Fixed Assets |
| Turnover Ratio |
Revenue from |
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Operations |
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= |
1200000 |
/ |
300000 |
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= |
4 |
Times |
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| 2025-2026 |
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| Fixed Assets |
= |
Cost of |
/ |
Net Fixed Assets |
| Turnover Ratio |
Revenue from |
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Operations |
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= |
1800000 |
/ |
600000 |
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= |
3 |
Times |
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▶ Video Solution: Coming Soon
Question 128
| Step 1 |
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| Capital |
= |
Shareholders |
+ |
8% Debentures |
| Employed |
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Funds |
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= |
2000000 |
+ |
1000000 |
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= |
3000000 |
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| Step 2 |
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| Net Assets |
= |
Revenue from |
/ |
Capital |
| Turnover Ratio |
Operations |
Employed |
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= |
7500000 |
/ |
3000000 |
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= |
2.5 |
Times |
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▶ Video Solution: Coming Soon
Question 129
| Step 1 |
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| Capital |
= |
Equity share |
+ |
Long term |
+ |
Reserves and |
| Employed |
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Capital |
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Borrowings |
Surplus |
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= |
1500000 |
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+ |
3000000 |
+ |
500000 |
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= |
5000000 |
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| Step 2 |
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| Net Assets |
= |
Revenue from |
/ |
Capital |
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| Turnover Ratio |
Operations |
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Employed |
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= |
10000000 |
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/ |
5000000 |
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= |
2 |
Times |
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▶ Video Solution: Coming Soon
Question 130
| Step 1 |
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| Revenue from |
= |
Cash Revenue |
+ |
Credit Revenue |
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| Operations |
From Operations |
From Operations |
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= |
1000000 |
+ |
4000000 |
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= |
5000000 |
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| Liabilities |
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Amount |
Assets |
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Amount |
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| Current Liabilities |
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850000 |
PPE |
3000000 |
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| Capital Employed |
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3000000 |
Less - Dep |
500000 |
2500000 |
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| (Balancing Figure) |
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Trade Investments |
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250000 |
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Current Assets |
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1100000 |
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| Total |
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3850000 |
Total |
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3850000 |
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| Alternate method to find Capital Employed : |
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| Capital |
= |
PPE |
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+ |
Trade |
+ |
Current |
- |
Current |
| Employed |
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less Depreciation |
Investments |
Assets |
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Liabilities |
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= |
(3000000-500000) |
+ |
250000 |
+ |
1100000 |
- |
850000 |
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= |
3000000 |
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| Step 3 |
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| Net Assets |
= |
Revenue from |
/ |
Capital |
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| Turnover Ratio |
Operations |
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Employed |
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= |
5000000 |
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/ |
3000000 |
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= |
1.67 |
Times |
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▶ Video Solution: Coming Soon
