Accounting Ratios

27 solved questions from Class 12 Accountancy, each with the full working. Tap any question to see the step-by-step solution.

• 1 What is the primary topic or theoretical principle explored in 'Accounting Ratios' (Class 12 ACCOUNTANCY)? medium MCQ Chapter Core Principle
• 2 Which key mechanism or analytical rule is highlighted in 'Accounting Ratios'? medium MCQ Key Analytical Mechanism
• 3 What is the primary topic or principle explained in 'Accounting Ratios' (Class 12 Accountancy)? medium MCQ Chapter Core Concept
• 4 Which key observation or fact is central to understanding 'Accounting Ratios'? medium MCQ Key Fact & Mechanism
• 5 Why is the study of 'Accounting Ratios' important for students of Class 12? medium MCQ Learning Significance
• 6 What is a common application or real-world example related to 'Accounting Ratios'? medium MCQ Real World Application
• 7 What key takeaway should students retain after completing 'Accounting Ratios'? medium MCQ Chapter Summary & Takeaway
• 8 A trading business reports cost of goods sold (COGS) of Rs.5,00,000 for the year. The average inventory during the year is Rs.50,000. (a) Find the inventory turnover ratio. (b) Compute the average number of days inventory remains unsold. medium 3 marks Inventory Turnover (Efficiency Ratio)
• 9 XYZ Ltd. has long‑term debt of Rs.80,000 and shareholders' equity of Rs.2,00,000. Calculate the debt‑equity ratio and state what the ratio indicates about the company's financing pattern. medium 2 marks Debt‑Equity Ratio (Solvency Ratio)
• 10 ABC Enterprises posted a profit before interest and tax (PBIT) of Rs.2,00,000 for the financial year. Its shareholders' equity is Rs.2,00,000 and long‑term debt is Rs.1,00,000. Interest expense for the year is Rs.40,000. (a) Calculate the Return on Capital Employed (ROCE). (b) Compute the Interest Coverage Ratio. (c) Comment on the firm’s overall financial performance based on these ratios. hard 5 marks ROCE and Interest Coverage (Profitability & Solvency Ratios)
• 11 A company has current assets of Rs.1,20,000 and current liabilities of Rs.30,000. What is its current ratio? easy MCQ 1 mark Current Ratio (Liquidity Ratio)
• 12 A company reports profit after tax of Rs.3,00,000 and shareholders' equity of Rs.1,20,000. It has 10,000 equity shares outstanding. Calculate (a) Return on Equity (ROE) and (b) Earnings per Share (EPS). medium 2 marks Return on equity and earnings per share
• 13 A company has cash of Rs.25,000, marketable securities of Rs.15,000, accounts receivable of Rs.30,000, inventory of Rs.40,000 and current liabilities of Rs.50,000. Calculate the quick ratio. easy 1 mark Quick ratio (liquidity)
• 14 A firm has total assets of Rs.5,00,000 and total liabilities of Rs.2,80,000. What is the debt ratio? medium MCQ 2 marks Debt ratio (solvency)
• 15 For a manufacturing firm, net credit sales for the year are Rs.12,00,000 and the average accounts receivable is Rs.1,00,000. Net profit for the year is Rs.1,20,000 and net sales are Rs.15,00,000. (a) Find the receivables turnover ratio. (b) Determine the average collection period in days. (c) Compute the net profit ratio as a percentage. hard 5 marks Receivables turnover, collection period, net profit ratio
• 16 Veda Pvt. Ltd has long-term debt of Rs.1,20,000 and shareholders' equity of Rs.3,00,000. The debt to equity ratio is: (a) 0.4 (b) 0.5 (c) 0.7 (d) 1.0 hard MCQ 5 marks Solvency ratio – debt to equity
• 17 XYZ Ltd has current assets of Rs.1,80,000 and current liabilities of Rs.60,000. What is its current ratio? Express the answer to two decimal places. easy 1 mark Working capital measurement
• 18 Shivam Enterprises reported a profit after tax of Rs.3,80,000 for the financial year. The average total assets of the company during the year were Rs.12,50,000. Calculate the Return on Assets (ROA) as a percentage, rounded to one decimal place. hard 4 marks Profitability ratio – ROA
• 19 ABC Company reports the following information: cash Rs.40,000, marketable securities Rs.30,000, accounts receivable Rs.70,000, inventory Rs.50,000, and current liabilities Rs.1,20,000. Calculate the quick ratio of the company. Show the calculation step by step. medium 2 marks Working‑capital sub‑ratio
• 20 An electronics retailer, ElectroMart, has the following current assets: Cash Rs.20,000, Marketable Securities Rs.15,000, Accounts Receivable Rs.55,000, and Inventory Rs.35,000. Its current liabilities are Rs.90,000. Calculate ElectroMart's Quick Ratio. Show the calculation step by step. easy 1 mark Quick Ratio
• 21 A company has long‑term debt of Rs.1,40,000 and shareholders' equity of Rs.2,80,000. What is the debt to equity ratio? easy MCQ 1 mark Debt to Equity Ratio
• 22 Sunshine Ltd reported a profit after tax of Rs.3,00,000. Its shareholders' equity is Rs.1,00,000 and it has 5,000 equity shares outstanding. Calculate (a) Return on Equity (ROE) as a percentage, rounded to one decimal place, and (b) Earnings per Share (EPS) in rupees. medium 2 marks Return on Equity, Earnings per Share
• 23 A textile manufacturer, ThreadCo, has the following data for the financial year: Net credit sales Rs.10,50,000, average accounts receivable Rs.75,000, net profit Rs.1,20,000, net sales Rs.12,00,000, interest expense Rs.20,000, and long‑term debt Rs.80,000. Compute (a) Receivables Turnover Ratio, (b) Average Collection Period in days, (c) Net Profit Ratio, (d) Interest Coverage Ratio, and (e) Comment on the company’s liquidity, profitability, and solvency based on these ratios. hard 5 marks Receivables Turnover, Profitability, Solvency Ratios
• 24 A start‑up company, FreshCo, reports current assets of Rs.2,00,000 and current liabilities of Rs.50,000. What is its current ratio? Express the answer to two decimal places. easy 1 mark Liquidity ratio
• 25 Renaissance Foods Ltd has long‑term debt of Rs.1,80,000 and shareholders’ equity of Rs.3,60,000. What is its debt‑equity ratio? Express the answer to two decimal places. medium 2 marks Solvency ratio
• 26 TechNova Pvt. Ltd. posted a profit before interest and tax (PBIT) of Rs.80,000 in the last financial year. Its total assets were Rs.1,20,000, total liabilities were Rs.40,000, and current liabilities were Rs.20,000. Interest expense for the year was Rs.20,000. Calculate (a) Return on Capital Employed (ROCE) as a percentage rounded to one decimal place, and (b) Interest Coverage Ratio. hard 3 marks Profitability & solvency ratios
• 27 Sparsh Textiles reported the following for the year: Net credit sales Rs.8,40,000, average accounts receivable Rs.60,000, net profit Rs.1,20,000, net sales Rs.10,00,000, long‑term debt Rs.2,00,000, and shareholders’ equity Rs.5,00,000. Compute (a) Receivables Turnover Ratio, (b) Average Collection Period in days, (c) Net Profit Margin, (d) Debt‑to‑Equity Ratio. Comment on the company’s liquidity, profitability, and solvency. hard 4 marks Turnover, profitability, solvency ratios