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3.52 Analysis of Financial Statements—CBSE XII
24. Current Ratio of a company is 2.5 : 1. Which of the following suggestions would improve, reduce or
not change it?
(i) Payment to trade creditors
(ii) Sold machinery for cash
(iii) Purchased goods for cash
(iv) Issue of Equity Shares
[Ans.: (i) Increase; (ii) Increase; (iii) No change; (iv) Increase.]
25. Balance Sheet of XYZ Ltd. as at 31st March, 2024 is as follows:
Particulars 31st March, 31st March,
2024 (`) 2023 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 1,00,000 1,00,000
(b) Reserves and Surplus 28,700 13,000
2. Current Liabilities
(a) Short-term Borrowings 26,000 25,000
(b) Trade Payables 31,000 36,000
Total 1,85,700 1,74,000
II. ASSETS
1. Non-Current Assets
Property, Plant and Equipment and Intangible Assets—Property, Plant and Equipment 1,12,000 1,08,000
2. Current Assets
(a) Inventories 27,000 25,000
(b) Trade Receivables 45,000 40,000
(c) Cash and Cash Equivalents 1,000 450
(d) Other Current Assets 700 550
Total 1,85,700 1,74,000

Additional Information:
Revenue from Operations (Net Sales) amounted to ` 4,00,000 in 2023 and ` 5,00,000 in 2024.
You are required to calculate following ratios: (i) Working Capital Turnover Ratio; (ii) Current Ratio; and
(iii) Quick Ratio.
[Ans.: (i) Working Capital Turnover Ratio = 2023—80 Times; 2024—29.94 Times;
(ii) Current Ratio = 2023—1.08 : 1; 2024—1.29 : 1;
(iii) Quick Ratio = 2023—0.66 : 1; 2024—0.81 : 1.]
26. Quick assets ` 1,50,000; Inventory ` 50,000; Working Capital ` 1,20,000. Calculate Current Ratio.
[Hints: 1. Current Assets = Quick Assets + Inventory.
2. Current Liabilities = Current Assets – Working Capital.] [Ans.: Current Ratio = 2.5 : 1.]
27. From the following data, calculate Current Ratio and Operating Ratio:
Sundry Debtors ` 10,000; Bills Payable ` 6,000; Stock ` 15,000; Cash ` 10,000; Bank ` 5,000; Creditors
` 14,000; Sales ` 60,000; Operating Expenses ` 12,000; Cost of Revenue from Operations (Cost of Goods
Sold) ` 18,000. [Ans.: Current Ratio = 2 : 1; Operating Ratio = 50%.]