Page 59 - MA12

4.4 Management Accounting (Section B)—ISC XII

Shareholders’ Funds mean same as in the Debt to Total Assets include Non-Current Assets and Debt = Long-term Borrowings + Long-term Total Assets include Non-Current Assets and Interest means interest on long-term debts. Trade Receivables includes Debtors and Bills Average Trade Receivables Opening TradeReceivables + Closing TradeReceivables 2 Trade Payables includes Creditors and Bills Average Trade Payables Opening TradePayables + Closing TradePa

Fraction Equity Ratio. Current Assets. Pure Ratio, Provisions. e.g., 2 : 1 Current Assets. Times Times Receivable. = Times Payable. = Times Times

This ratio shows the extent to which the total assets have been financed by the proprietor. The higher the ratio, greater the satisfaction for lenders and creditors. This ratio measures the safety margin available to the lenders of Long-term debts. It measures the extent to which debt is being covered by assets. It measures the safety margin available to lenders. This ratio indicates efficiency in the collection of amount due from Trade Recei

Shareholders’ Funds Total Assets Debt Total Assets before Interest Net Profit Tax and Interest Credit Revenue from Operations Average Trade Receivables Net Credit Purchases Average Trade Payables Revenue from Operations Working Capital Cost of Revenue from Operations (Cost of Goods Sold) Average Inventory

Proprietary Ratio Debt to Total Assets Ratio Interest Coverage Ratio III. Activity Ratios Trade Receivables Turnover Trade Payables Turnover Working Capital Turnover Ratio Inventory Turnover Ratio

2. 3. 4. 1. Ratio 2. Ratio 3. 4.