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From the following details make out the Balance Sheet with as many details
as possible:
Stock velocity 6
Capital Turnover Ratio 2
Fixed Assets Turnover 4
Gross Profit Turnover 20%
Debtors Velocity 2 months
Creditors Velocity 73 days
The GP was Rs.60000, Res and Surplus Rs.20000.
Closing Stock was Rs.5000 in excess of the Opening stock
2.The following information is given about X ltd., for the year ended 31 Mar., 2010
Stock Turnover 6 times
GP Ratio 20% on Sales
Sales for the year 300000
Closing stock is Rs.10000 more than the Opening stock
Opening Creditors 20000
Closing Creditors 30000
Trade Debtors at the end 60000
Net Working Capital 50000
Find out: a) Average Stock d) Average Payment Period
b) Purchases e) Average Collection Period
c) Creditors Turnover ratio f) Working Capital Turnover ratio
Rules of Accounting
Usefulness of Ratios-Discuss
Ratios are indicators or pointers but by themselves not decision making tools-Discuss
Bankers look for Current ratio / interest coverage and DSCR- Discuss
GP 60000
Sales 300000 Capital
C of G Sold 240000 R and S
Stock velocity 6 Creditors
Average stock 40000
Closing stock 42500
Opening Stock 37500
Capital employed 150000
FA 60000
Debtors 50000
Purchases 245000
Creditors 49000
199000 199000