This Ratio is Considered as best measurement of the overall performance of the enterprise. This ratio indicates whether the c… Accountancy MCQs for Class 12 Chapter Wise with Answers PDF Download was Prepared Based on Latest Exam Pattern. Next. 5. 1,00,000 + Rs. Interest on Long-term Debt = 15% of Rs. Profitability ratios are determined to analyse the earning capacity of the business which is the result of utilisation of assets employed in the business. These ratios indicate the speed at which, activities of the business are being performed. OR = Rs. Students should solve the CBSE issued sample papers to understand the pattern of the question paper which will come in class 12 board exams this year. Meaning: The quantitative relation between two amounts showing the number of times one value contains or is contained within the other. 80,000 = Rs. 50,000 Current liabilities include short-term borrowings, trade payables (creditors and bills payables), other current liabilities and short-term provisions. Gross Profit = Revenue from Operations − Cost of Revenue from Operations Liquidity Ratio = Rs. Calculate the Trade receivables turnover ratio from the following information: Total Revenue from operations 4,00,000 This shows how quickly cash is realized from trade receivables. Also after the chapter you can get links to Class 12 Accountancy Notes, NCERT Solutions, Important Question, Practice Papers etc. All the solutions of Accounting Ratios - Accountancy explained in detail by … 32,000 : Rs. Generally a higher ratio indicates better profitability. CBSE Class 12. Cost of Revenue from = Purchases + (Opening Inventory − Closing Inventory) + operations Direct Expenses 1,50,000 = Rs. A high liquidity ratio indicates that the cash position of the company is good. (a) Gross Profit Ratio: Gross profit ratio as a percentage of revenue from operations is computed to have an idea about gross margin. 2,000 + Rs. Equity = Share Capital + General Reserve + Surplus = 1,00,000 + 45,000 + 30,000 = 1,75,000, (b) Total Assets to Debt Ratio This ratio measures the extent of the coverage of long-term debts by assets, Total assets to Debt Ratio = Total assets/Long-term debts. 2. Even the teachers refer to textbooks while preparing the final question paper of Class 12 Accountancy. It is made with the latest syllabus in mind and contains all the tips and tricks with which you can learn Accountancy better and score well. 20,000 + Rs. The main purpose of Financial Statements is to provide the accounting information to its users. Download CBSE Revision Notes for CBSE Class 12 Accountancy Change in Profit sharing ratio of Partners Change in the Profit Sharing Ratio among the existing partners - sacrificing ratio, gaining ratio, accounting for revaluation of assets and reassessment of liabilities and treatment of reserves and accumulated profits. Profitability ratios are calculated to analyse the earning capacity of the business which is the outcome of utilisation of resources employed in the business. (d) Net Profit Ratio: It relates revenue from operations to net profit after operational as well as non-operational expenses and incomes. Average Trade Receivable =$\frac{(Opening\,Trade\,{\mathop{\rm%20Re}\nolimits}%20ceivable%20+%20Clo\sin%20g\,Trade\,{\mathop{\rm%20Re}\nolimits}%20ceivables)}{2\,}$ 208k watch mins. If details regarding opening and closing values of trade receivable are not given then closing trade receivables are used for calculation of this ratio. Cash Flow Statement. 2. MathJax = { 10,000 and the ‘Revenue from Operations’ are Rs. 22,000 = Rs. 2. Parties interested in this ratio are debenture holders and lenders of long term credit. Significance : It assesses the ability of a business to pay its short term liability promptly. Meaning: The quantitative relation between two amounts showing the number of times one value contains or is contained within the other. 24,000 = 1.5x A ratio is a mathematical number calculated as a reference to relationship of two or more numbers and can be expressed as a fraction, proportion, percentage and a number of times. = Rs. = Rs.25, 000 + Rs.75, 000 = Rs. Accounting Ratios - CBSE Notes for Class-12 Accountancy. OR 1. Calculate ‘Liquidity Ratio’ from the following information: Current liabilities = Rs. NCERT Solutions for Class 12 Accountancy Part 1. Operating Profit = Gross Profit – Operating Expenses = 18,00,000 − 2,00,000 = 16,00,000 This first type of accounting ratio formula is used for ascertaining the liquidity position of the company. 3. Significance: It measures the safety margin available to the providers of long term loans. 80,000 Pin By Ncert Solutions On Ts Grewal Solutions Class 11 by pinterest.com If excess of current assets over quick assets represented by inventories is Rs. = Purchases + Decrease in inventory + Direct Expenses CBSE Class 12 Accountancy Ratio Analysis. 2,40,000 / Rs. Download Accounting Ratios notes for CBSE Class 12 Accountancy book pdf free download link or read online here in PDF. Net Profit = Net Revenue from Operations – Operating Cost – Non Operating expenses + Non Operating Income 3,00,000 + Rs. Total Assets to Debt Ratio Inventory at the end = 22,000 CLASS 12 ACCOUNTANCY RATIOS NOTES 2; Thumbnails Document Outline Attachments. 2,20,000 / Rs. Operating Ratio =$\frac{Grass\,\Pr%20ofit}{Net\,Sales\,/\,Net\,{\mathop{\rm%20Re}\nolimits}%20venue\,From\,Operations}%20\times%20100%20=%20-%20-%20\%%20\,$ Working Capital Turnover Ratio : It establishes the relationship between = 32,00,000 / 16,00,000 = 2 : 1 It shows the safety margin available to the lenders of the business as they can ascertain the portion of the shareholders in the business. Accounting Ratios It is a mathematical expression that shows the relationship between various items or groups of items shown in financial statements. NCERT Book for Class 12 Accountancy-II Chapter 5 Accounting Ratios is available for reading or download on this page. Operating Ratio + Operating Profit Ratio =1 4. Tax Rate = 40% 5. Topic 1: Introduction 1. Liquidity Assets = Current assets − (Inventories + Prepaid expenses + Advance tax) 1,20,000 Accounting ratio can be classified from different point of view. 22,000/ 2 = Rs. Current Assets = 3.5x = 3.5 × Rs. 18,000 + Rs. = Rs. 1. Where, OR Current Ratio is used to compare the current assets to current liabilities of the business. 1. Required fields are marked *. receivables turnover ratio credit sales for a year divided by the average balance in accounts receivable during the same year. OR 2. All Profitability ratios are shown in percentage form. This ratio indicated the number of times the Trade Payables are turned over in relation to credit purchases over a year. The best part is that the notes for the Accountancy revision notes for class 12 CBSE board are available as a free PDF download. ... Accounting Ratios. = Rs. average collection period 360 or 365 days divided by the receivables turnover ratio. 20,000 = 3 Times. Capital Employed = Fixed Assets (Tangible and Intangible) + Non Current Investment (Excluding Non Trading Investment) + Long Term Loans and Advances + Working Capital 2. 12th Class - CBSE - Accountancy - 345 Questions - 0 Concepts. It shown the relationship between Net Credit Purchases and Average Creditors/Average Trade Payables (Creditors + Bills Payable). Limitations of Ratio Analysis: i. From the following information, calculate inventory turnover ratio: Inventory in the beginning = 18,000 This shows how quickly cash is paid to Trade Payables. Average Trade Payable = (Opening Creditors and Bills Payable + Closing Creditors and Bills Payable)/2 1,00,000, it can be said that the gross profit is 10% × 10,000 100 1,00,000 of the ‘Revenue from Operations’ . 4,000 − Rs. Operating Profit = Net Profit + Non Operating Expenses – Non-Operating Income Debtors Turnover Ratio/Trade Receivables Turnover Ratio: It may be computed directly or as a residual of operating ratio. 4. It is better indicator of liquidity as some current assets are not easily convertible into cash. A ratio may be expressed in the … Stock Turnover Ratio/Inventory Turnover Ratio CBSE Class 12 Commerce Accountancy Accounting Ratios : An accounting ratio compares two aspects of a financial statement, such as the relationship (or ratio) of current assets to current liabilities. Classification of ratios. Debt = Debentures + Long term provisions = 75,000 + 25,000 = 1,00,000 ∴ Inventory Turnover Ratio = Rs. This ratio is expressed in TIMES. This ratio is a relationship between the Cost of goods sold i.e, Cost of Revenue form Operations during a particular period of time and the Cost of average inventory during a particular period. Generally higher ratio is considered better but very high ratio shows over trading and low ratio means stock is piled up or over investment in stock. Total Assets = Fixed Assets (Tangible and Intangible) + Non Current Investment (Excluding Non Trading Investment) + Long Term Loans and Advances + Current Assets Accounting Ratios – CBSE Notes for Class 12 Accountancy 1. Generally a higher ratio indicates better profitability. = Rs. To assess the operating efficiency of the business. 350000 (4) Reserve and Surplus: Rs. Chapter 5 Accounting Ratios. (d). Current Ratio = $\frac{Current\,Assetors\,Liquid\,Assets}{Current\,Liabilities}$ RBSE Class 12 Accountancy Chapter 10 Very Short Answer Questions. Quick Assets = Current Assets – Inventory – Prepaid Expenses – Advance Tax – Accrued Income Objective & Significance-Objective is to ascertain the amount of profit available to cover the interest charge. = Rs. 1. Class 8; Class 9; Class 10; Grade 11; Grade 12; ... Grade 12 Account Chapters List. 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