Current Ratio = Current Assets : Current Liabilities or Current Assets / Current Liabilities. = Rs. These ratios measure the efficiency of asset management and measure the effectiveness with which an enterprise uses resources at its disposal. Accounting For Debentures - Company Accounts 9. 2. May 7, 2019 - Accounting Ratios – CBSE Notes for Class 12 Accountancy Topic 1: Introduction 1. OR High Ratio is better for lenders as it indicates higher safety margin. Solved Cash Flow Statements with Balance Sheet (vertical) and Notes to Accounts - Cbse Class 12 Accountancy Project ... Accounting project - Financial Ratio Analysis Haziq1511. Together, students will be prepared to answer every type of question like subjective and objective and aim for the best in their last year of school. 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. It determines ease with which a company can pay interest expense on outstanding debt. Average Trade Receivables = Opening Trade Receivables + Closing Trade Receivables / 2 If details regarding cash and credit purchases are not given then all the purchases are taken on credit basis. Required fields are marked *. If details regarding opening and closing values of trade payables are not given then closing trade payables are used for calculation of this ratio. Current assets include current investments, inventories, trade receivables (debtors and bills receivables), cash and cash equivalents, short-term loans and advances and other current assets such as prepaid expenses, advance tax and accrued income, etc. Free PDF download of Class 12 Accountancy Chapter 13 - Accounting Ratios Quick Revision Notes & Short Key-notes prepared by our expert Accountancy teachers from … 12 Accounting for Labour. Net Working Capital = Current Assets excluding Fictitious assets – Current liabilities. Ideal Ratio: No ideal ratio but a high ratio indicates higher safety to lenders and low ratio represents risky position. (a) Gross Profit Ratio: Gross profit ratio as a percentage of revenue from operations is computed to have an idea about gross margin. From the following information, calculate inventory turnover ratio: Inventory in the beginning = 18,000 1,00,000 − Rs. Wages = 14,000 Ideal Ratio : 1:1 is considered as best. Students can also use the sample papers that SelfStudys provides for class 12 along with the NCERT Class 12 Accountancy Chapter 9Statement Analysis Tools and Accounting Ratios Notes provided. 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. (d). (d) Net Profit Ratio: It relates revenue from operations to net profit after operational as well as non-operational expenses and incomes. If profits after tax are given in the question then we will find profits before tax with the help of the following formula: 1. Easier to obtain loans A high ratio indicates that It expresses the relationship between the cost of revenue from operations and average inventory. 80,000 = Rs. Interest Coverage Ratio = $\frac{Net\,\Pr%20ofitbefore\,Interest\,\&%20\,Tax}{Fixed\,Interest\,Ch\arg%20es}$ 2. 1. 12,00,000 / Rs. = Rs. Total Assets = Fixed Assets (Tangible and Intangible) + Non Current Investment (Excluding Non trading Investment) +long Term Loans and Advances + Current Assets 2 Statement of Changes in Financial Position. 5,000 + Rs. This Ratio is Considered as best measurement of the overall performance of the enterprise. NCERT Solutions Class 12 Accountancy 2 Chapter 5 Accounting Ratios. Accounting Ratios Class 12. 16,000 = 2 : 1. 2. Total assets = shareholder funds + total debts (liabilities). = Rs. Current liabilities include short-term borrowings, trade payables (creditors and bills payables), other current liabilities and short-term provisions. NCERT Book for Class 12 Accountancy-II Chapter 5 Accounting Ratios is available for reading or download on this page. This ratio can also be calculated on the basis of the Cost of Revenue from Operations i.e., Cost of Goods Sold. Also after the chapter you can get links to Class 12 Accountancy Notes, NCERT Solutions, Important Question, Practice Papers etc. Parties interested in this ratio are debenture holders and lenders of long term credit. This ratio indicated the number of times the trade receivables are turned in relation to credit sales over a year. inventory turnover ratio the cost of goods sold for a year divided by the average inventory during = Rs. Quick Assets = Current Assets – Inventory – Prepaid Expenses – Advance Tax – Accrued Income 1,50,000 Revision Notes for CBSE Class 12 Accountancy Chapter 13 – Free PDF Download. ... Accounting Ratios. Credit Revenue from operations = Total revenue from operations − Cash revenue from operations 16,000 Calculate the Trade receivables turnover ratio from the following information: Total Revenue from operations 4,00,000 of days/month in a year ÷Trade Payables Turnover Ratio. It is expressed in number of times. Capital Employed = Shareholders’ Funds + Non Current Liabilities To analyse the profitability of the business. From the following details, calculate interest coverage ratio: Net Profit after tax 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. This ratio is expressed in TIMES. Debt-Equity Ratio = Long term Debts / Shareholders' Funds, Shareholders’ Funds (Equity) = Share capital + Reserves and Surplus + Money received against share warrants Carriage inwards = 4,000, Inventory Turnover Ratio = Cost of Revenue from Operations / Average Inventory Solved Cbse Class 12 Accountancy Full Project(Comprehensive Project, Ratio Analysis and Cash Flow Statements with Conclusion) If the performance of different units belonging to the same firm is to be compared, then it is called 'intra-firm comparison'. Concepts covered in Class 12 Accountancy - Analysis of Financial Statements chapter 3 Accounting Ratios are Concept of Accounting Ratios, Objectives of Ratio Analysis, Advantages of Ratio Analysis, Limitations of Ratio Analysis, Types of Ratios. Tax Rate = 40% This PDF file for class 12 Accounts subject's Accounting Ratios topic contains brief and concise notes for easy understanding of topics and quick learning. All Profitability ratios are shown in percentage form. 5,000. All books are in clear copy here, and all files are secure so don't worry about it. Total Debts (Liabilities) Rs. (i)... 2. This PDF file for class 12 Accounts subject's Accounting Ratios topic contains brief and concise notes for … = Rs. Solvency Ratio Analysis – Accounting Ratios Class 12 Solvency Ratio Analysis : It measure the ability of a business to survive for a long period of time. Significance: It measures the proportion of total assets financed by the Proprietors of the business. Average Trade Receivable = = 1,00,000 + 10,000 + 30,000 + 20,000 + 40,000 = 2,00,000 1,00,000 1. Bills Payables on 31.3.2015 = 70,000, Trade Payables Turnover Ratio = Net Credit Purchases / Average Trade Payables NCERT Book Class 12 Accountancy – II Chapter 5 Accounting Ratios 1. Chapter-wise NCERT Accountancy Book Part 1 for Class 12 in English It expresses the relationship between profits available for payment of interest and the amount of interest payable. 2. 24,000 = 3.5x − 2x = Rs. Accounting Ratios – CBSE Notes for Class 12 Accountancy. Cost of Material Consumed = Raw Material Purchased + Changes in inventory of Raw Material Credit Revenue from operations = Rs. Proprietary Ratio = $\[\frac{Equity\,or\,Shareholder%27s\,Funds}{Total\,Assets}$ svg: { Calculate ‘Liquidity Ratio’ from the following information: Current liabilities = Rs. Accounting For Share Capital - Company Accounts 8. Solvency Ratio : Solvency ratios convey an enterprise’s ability to meet its long term obligations as and when they becomes due. = 20,000 + 40,000 + 40,000 = 1, 00,000, It is the ratio of quick (or liquid) asset to current liabilities. 60,000 × 100/(100 − 40) Net profit Ratio = $\frac{Grass\,\Pr%20ofit}{Net\,Sales\,/\,Net\,{\mathop{\rm%20Re}\nolimits}%20venue\,From\,Operations}%20\times%20100%20=%20-%20-%20\%%20\,$ Free PDF download of Important Questions for CBSE Class 12 Accountancy Chapter 13 Accounting Ratios prepared by expert Accountancy teachers from latest edition of CBSE(NCERT) books, On CoolGyan.Org to score more marks in CBSE board examination. Accounting Grade 12 www.learnxtra.co.za Brought to you by Page 5 12. 11 Accounting for Material. DK Goel Solutions for Class 12 DK Goel Solutions Accountancy furnishes a wide range of solutions that certainly supports the students to understand, analyse and solve them. Significance: It assesses the long term soundness of financial position of a business. 2,00,000. (a) Inventory Turnover Ratio: It determines the number of times inventory is converted into revenue from operations during the accounting period under consideration. This ratio indicated the number of times the Trade Payables are turned over in relation to credit purchases over a year. Ratio Analysis : Accounting Ratios Notes for CBSE Class 12 ACCOUNTS NOTES, BBA, B.Com, MBA, CA CPT Ratio Analysis Ratio means comparison of quantitative relationship between two common variables that expresses how much bigger one is than the other. 40,000 + Rs. 10,000 = 3.5: 1 1,20,000 + 80,000 + 40,000 = Rs. 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