Accounting Ratios(12th Grade > Accountancy ) Questions and Answers
Question 1.
Net profit ratio determines _______________
working efficiency of the management
overall efficiency of the business
working efficiency of the internal management
None of these
Explanation:-
Answer: Option B. ->
overall efficiency of the business
: B
Net profit ratio determines the overall efficiency of the business.
Question 2.
If sales is Rs 10,00,000, sales returns is Rs 50,000, Profit Before Tax is Rs 2,00,000, Income tax is 40%, Net profit ratio is___
12.63 %
12%
10 %
24%
Explanation:-
Answer: Option A. ->
12.63 %
: A
Tax = 40% of 2,00,000 = Rs 80,000 Net profit after tax = Rs 1,20,000 Net sales = Rs 10,00,000 - Rs 50,000 = Rs 9,50,000 NetProfitRatio=1,20,0009,50,000×100=12.63%
Question 3.
Calculate the return on capital employed (ROI) from the following information:
Capital employed is 1,00,000
Net profit on sales is 6%
Gross Profit Margin 90,000 (15%)
13%
28%
36%
20%
Explanation:-
Answer: Option C. ->
36%
: C
Revenue from operations = 90,000/15% = 6,00,000
Net profit = 6,00,000*6% = 36000
ROI= (36,000/1,00,000)*100 = 36%
Question 4.
Return on Investment measures a relationship between which of the following?
Net Profit before Interest and Tax and Capital employed
Net Profit after Interest and Tax and Capital employed
ROI = Net Profit before Interest and Tax / Total Assets
None of these
Explanation:-
Answer: Option A. ->
Net Profit before Interest and Tax and Capital employed
: A
Return on Investment measures a relationship between Net Profit before Interest & Tax and Capital Employed
Question 5.
What will be the operating profit ratio, if operating ratio is 88.94%?
11.06%
83.64%
16.36%
None of these
Explanation:-
Answer: Option A. ->
11.06%
: A
Operating ratio + operating profit ratio = 100% So, operating profit ratio =100%- 88.94% = 11.06%
Question 6.
If selling price is fixed 25% above the cost, the Gross Profit ratio is ___
12.5%
25%
50%
20%
Explanation:-
Answer: Option D. ->
20%
: D
Let cost = x Then, revenue from operations = 1.25 x Profit = 0.25 x Gross profit ratio = 0.25x1.25x×100=20%
Question 7.
Net Profit before interest and tax Rs.80,000; Equity share capital (12000 shares of Rs.10 each) 1,20,000; 10% Preference Share Capital Rs.50,000; 12% Debentures Rs.1,00, 000; Reserves and Surplus Rs.130,000; Tax rate 50%; Calculate Return on Investment.