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3.46 Analysis of Financial Statements—CBSE XII
There was no Opening and Closing Inventory of Finished Goods and WIP.
Examine the Statement of Profit & Loss and Balance Sheet given above and calculate following ratios:
(i) Gross Profit Ratio (ii) Current Ratio
(iii) Debt to Equity Ratio (iv) Inventory or Stock Turnover Ratio
(v) Liquid Ratio (vi) Proprietary Ratio
(vii) Total Assets to Debt Ratio (viii) Working Capital Turnover Ratio
(ix) Trade Receivables Turnover Ratio (x) Operating Ratio
[Ans.: (i) Gross Profit Ratio = 50%; (ii) Current Ratio = 2.67 : 1;
(iii) Debt to Equity Ratio = 0.67 : 1; (iv) Inventory or Stock Turnover Ratio = 2.5 Times;
(v) Liquid Ratio = 1 : 1; (vi) Proprietary Ratio = 46.15%; (vii) Total Assets to
Debt Ratio = 3.25 : 1; (viii) Working Capital Turnover Ratio = 2 Times
(based on Cost of Sales), Alternatively = 4 Times (based on Sales);
(ix) Trade Receivables or Debtors’ Turnover Ratio = 10 Times;
(x) Operating Ratio = 60%.]
14. Following is the Balance Sheet of Raddisson Ltd. as at 31st March, 2024. You are required to calculate
Total Assets to Debt Ratio for the two years.

BALANCE SHEET as at 31st March, 2024
Particulars Note 31st March, 31st March,
No. 2024 (`) 2023 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 7,50,000 6,50,000
(b) Reserves and Surplus 3,00,000 2,50,000
2. Non-Current Liabilities
(a) Long-term Borrowings 1 15,00,000 5,00,000
(b) Long-term Provisions 2,00,000 1,00,000
3. Current Liabilities
(a) Short-term Borrowings 2,00,000 1,50,000
(b) Short-term Provisions 1,50,000 50,000
Total 31,00,000 17,00,000
II. ASSETS
1. Non-Current Assets
Property, Plant and Equipment and Intangible Assets:
—Property, Plant and Equipment 18,00,000 9,00,000
2. Current Assets
(a) Inventories 5,00,000 3,00,000
(b) Trade Receivables 6,50,000 4,00,000
(c) Cash and Cash Equivalents 1,50,000 1,00,000
Total 31,00,000 17,00,000

Note to Accounts
Particulars 31st March, 31st March,
2024 (`) 2023 (`)
1. Long-term Borrowings
10% Debentures 7,50,000 5,00,000
Term loan from Bank 7,50,000 ...
15,00,000 5,00,000

[Ans.: Total Assets to Debt Ratio: 2024—1.82 : 1; 2023—2.83 : 1.]