Ratio analysis 1

Young India limited has a operating profit ratio of 20%. To maintain this ratio at 25% management may

• Increase selling price of stock in trade

• Reduce cost of revenue from operations

• Increase selling price of stock in trade and to reduce cost of revenue from operation

• All of the above

The transaction involving a decrease in debt equity ratio and increase in current ratio is

• Issue of debentures against the purchase of fixed assets

• Issue of debenture for cash

• Redemption of preference share for cash

• Issue of equity shares for cash

Current ratio is 2:1. On the sale of fixed asset (book value Rs. 20,000) for Rs. 18,000 state whether the current ratio will

• Improve

• Decline

• Not change

• Can't say

if opening inventory is Rs. 1,20,000 cost of revenue from operation is Rs. 10,00,000 and inventory turnover is 5 times then closing inventory will be

• Rs. 3,20,000

• Rs. 2,80,000

• Rs. 1,60,000

• Rs. 4,00,000

A transaction involving the decrease in both current ratio and quick ratio is

• Sale of non current asset for cash

• Sale of stock in trade at loss

• Cash payment of a current liability

• Purchase of stock in trade on credit

If current ratio form is 2.5:1 and its current liabilities are Rs. 2,00,000. Its working capital will be

• Rs. 3,00,000

• Rs. 3,75,000

• Rs. 4,00,000

• Rs. 7,00,000

Non current assets of a firm are Rs. 26,00,000, current assets are Rs. 9,00,000 and shareholders' fund are Rs. 21,50,000. Total debts of the firm will be

• Rs. 43,50,000

• Rs. 13,50,000

• Rs. 21,50,000

• Rs. 38,50,000