A high ratio implies good inventory ‘management and an indication of under-investment.
It will adversely affect the ability of a firm to meet customers’ demand. 50Cash collected from Debtors during the year Rs, 5,000Bad Debts Rs.
for vivid information you can get in touch with our Accounting assignment Problem Solver at university homework help.
But here we are trying to discuss about the segmentation of the subject topic in a nutshell only for our readers.
are: Problem 13: Following is the summarised Balance Sheet of a concern as at 31st December: Comments: 1.
Liquidity and Solvency Position: Current Ratio is 2.9.
Here is a compilation of top thirteen accounting problems on ratio analysis with its relevant solutions.
Problem 1: The following is the Balance Sheet of a company as on 31st March: Problem 2: From the following particulars found in the Trading, Profit and Loss Account of A Company Ltd., work out the operation ratio of the business concern: Problem 3: The following is the summarised Profit and Loss Account of Taj Products Ltd.
At the same time, a higher ratio reflects efficient business activities. It is an indication of excessive inventory and over investment in inventory. 500Bad Debt Provision at 10%Note: Bills Receivable from the buyer of fixed assets, should be excluded.
A low ratio may be result of inferior quality goods, stock of un-saleable and absolute goods. 5, 90,000Problem 8: Calculate Debtors Velocity from the following details: Opening Balance of Debtors Rs. Bad and doubtful debts and their provisions are not deducted from the total debtors in order to avoid the impression that a larger amount of receivables have been collected.