Accounting Rati...

Which of the following statements are true about Ratio Analysis?

A) Ratio analysis is useful in financial analysis.
B) Ratio analysis is helpful in communication and coordination
C) Ratio Analysis is not helpful in identifying weak spots of the business.
D) Ratio Analysis is helpful in financial planning and forecasting.

Two basic measures of liquidity are :

Higher the ratio, the more favorable it is, doesn’t stand true for:

Buy back of shares improves 

From the following details, calculate interest coverage ratio:
Net Profit after tax Rs. 60,000; 15% Long-term debt 10,00,000; and Tax rate @ 40%.

From the following details, what will be the Net Profit Ratio:

Profit After Tax (PAT) = Rs. 2,30,000

Provision for taxation = Rs. 29,000

Sales = Rs. 13,00,000

Sales Return = Rs. 50,000  

The following information is given about a company:

(i) Closing trade receivables = ₹10,000

(ii) Cash sales are 20% of credit sales.

(iii) Excess of closing trade receivables over opening = ₹4,000

(iv) Revenue from operations or sales = ₹60,000

Calculate Receivables turnover ratio or debtors turnover ratio.

From the following information, compute Proprietary Ratio:

Equity share capital - 20,00,000

10% Preference share capital - 20,00,000

Reserves & surplus - 11,00,000

Fictitious Assets - 1,00,000

Fixed Assets - 55,00,000

Stock - 1,75,000

Debtors - 3,50,000

Bills receivable - 50,000

Cash - 2,25,000.

The current ratio is 2 : 1. which of the following transactions would "not change" the current ratio:
(a) Payment of current liability;
(b) Purchased goods on credit;
(c) Sale of a Computer (Book value: Rs. 4,000) for Rs. 3,000 only;
(d) Sale of merchandise (goods) costing Rs. 10,000 for Rs. 11,000;
(e) Payment of dividend.

Liquidity ratio assumes more importance: