Debt-Equity Ratio 2:1, Net Profit (after Tax) Ratio 16.8%, Operating Profit Ratio 30%. Operating Expenses Ratio 100%t Inventory Velocity 1 month, Tax Rate 30%, Land & Building 6,75,000, Plant & Machinery 6,00,000, Capital Work-in-Progress 3,00,000. Inventory (Including Raw Materials 15,000, Work-in-Progress 20,000 and Stores and Spares ₹ 5,000) ₹ 1,40,000. Trade Receivables 2,20,000, Provision for doubtful debts 20,000. Credit Sales are 2,00,000 more than Cash Sales. Calculate Interest Coverage Ratio, Trade Receivables Turnover Return on Investment.
Question
Debt-Equity Ratio 2:1, Net Profit (after Tax) Ratio 16.8%, Operating Profit Ratio 30%. Operating Expenses Ratio 100%t Inventory Velocity 1 month, Tax Rate 30%, Land & Building 6,75,000, Plant & Machinery 6,00,000, Capital Work-in-Progress 3,00,000. Inventory (Including Raw Materials 15,000, Work-in-Progress 20,000 and Stores and Spares ₹ 5,000) ₹ 1,40,000. Trade Receivables 2,20,000, Provision for doubtful debts 20,000. Credit Sales are 2,00,000 more than Cash Sales. Calculate Interest Coverage Ratio, Trade Receivables Turnover Return on Investment.
Solution
The question you've asked requires several steps to solve. Here's how you can calculate each of the requested ratios:
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Interest Coverage Ratio: This ratio is calculated as Earnings Before Interest and Taxes (EBIT) divided by Interest Expense. However, the information provided does not include these specific details, so it's not possible to calculate this ratio with the given data.
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Trade Receivables Turnover Ratio: This ratio is calculated as Net Credit Sales divided by Average Accounts Receivable. In this case, we know that credit sales are 2,00,000 more than cash sales, but we don't know the amount of cash sales. We also know that trade receivables are 2,20,000. However, without the total sales or cash sales, we can't calculate this ratio.
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Return on Investment (ROI): This ratio is calculated as Net Profit divided by Total Investment. We know that the net profit ratio is 16.8%, but we don't know the total revenue to calculate the net profit. We also don't have enough information to calculate the total investment, as we only have partial information about the company's assets.
In conclusion, with the information provided, it's not possible to calculate the Interest Coverage Ratio, Trade Receivables Turnover Ratio, or Return on Investment. We would need additional information such as total revenue, cash sales, interest expense, and total assets.
Similar Questions
Debt-Equity Ratio 2:1, Net Profit (after Tax) Ratio 16.8%, Operating Profit Ratio 30%. Operating Expenses Ratio 100%t Inventory Velocity 1 month, Tax Rate 30%, Land & Building 6,75,000, Plant & Machinery 6,00,000, Capital Work-in-Progress 3,00,000. Inventory (Including Raw Materials 15,000, Work-in-Progress 20,000 and Stores and Spares ₹ 5,000) ₹ 1,40,000. Trade Receivables 2,20,000, Provision for doubtful debts 20,000. Credit Sales are 2,00,000 more than Cash Sales. Calculate Interest Coverage Ratio, Trade Receivables Turnover Return on Investment.
Using the financial statements below, calculate the debt to equity ratio for the current year. Please calculate to 2 decimal places.Profit and loss statement Current year Prior yearRevenue 14,800 18,500Less Cost of sales 6,000 7,500Gross profit 8,800 11,000Less expenses Wages Expense 5,500 6,500Interest Expense 2,200 2,000Depreciation Expense 1,000 1,200Advertising Expense 900 800Net profit (800) 500BALANCE SHEET Current year Prior yearCurrent assets Cash 14,250 16,700Accounts Receivable 14,000 3,500Inventory 6,000 2,500Prepaid Expenses 650 1,500Non-current assetsProperty Plant Equipment 192,500 193,500Land 210,000 210,000Total assets 437,400 427,700Current liabilitiesAccounts Payable 11,700 4,200Unearned Revenue 3,500 2,000Wages Payable 3,500 2,500Non-current liabilitiesBank Loan 118,000 122,500Total liabilities 136,700 131,200NET ASSETS 300,700 296,500Equity Share Capital 255,000 250,000Retained Earnings 45,700 46,500TOTAL EQUITY 300,700 296,500
The debt-to-equity ratio is a measure of a company's:a.Profitabilityb.Liquidityc.Solvencyd.Efficiency
Debt Equity Ratio is :a.Activity Ratiob.Solvency Ratiosc.Operating Ratiod.Liquidity Ratio
The debt to equity ratio indicates:The net worth of the companyThe proportion of the company financed by lenders versus ownersA company's working capital funding gapThe liquidity of the company
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