Following informations are given: Debtors: Rs.40,000 Creditors: Rs.80,000 Debtors turnover ratio: 10 times Cash balance: Rs.24,000 Closing stock: Rs.96,000 Gross profit: Rs.80,000 Net profit:…

i) Current Ratio

The Current Ratio is calculated as: $$\text{Current Ratio}=\frac{\text{Current Assets}}{\text{Current Liabilities}}$$ Given:

• Current Assets = Cash (Rs. 24,000) + Debtors (Rs. 40,000) + Closing Stock (Rs. 96,000) = Rs. 160,000
• Current Liabilities = Creditors (Rs. 80,000)

$$\text{Current Ratio}=\frac{160,000}{80,000}=\text{2 : 1}$$

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ii) Quick Ratio (Acid-Test Ratio)

The Quick Ratio excludes closing stock (inventory) from current assets: $$\text{Quick Ratio}=\frac{\text{Quick Assets}}{\text{Current Liabilities}}$$ Where Quick Assets = Cash (Rs. 24,000) + Debtors (Rs. 40,000) = Rs. 64,000

$$\text{Quick Ratio}=\frac{64,000}{80,000}=\text{0.8 : 1}$$

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iii) Sales Amount

The Debtors Turnover Ratio is given as 10 times. This ratio is calculated as: $$\text{Debtors Turnover Ratio}=\frac{\text{Credit Sales}}{\text{Average Debtors}}$$ Assuming Average Debtors = Closing Debtors (Rs. 40,000) (since opening debtors are not given, we use closing debtors as a proxy):

$$10=\frac{\text{Credit Sales}}{40,000}⟹\text{Credit Sales}=10\times 40,000=\text{Rs. 400,000}$$

Total Sales = Credit Sales (Rs. 400,000) + Cash Sales (not given, but since only debtors turnover is provided, we assume all sales are on credit unless stated otherwise). Thus, Sales Amount = Rs. 400,000.

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iv) Gross Profit Ratio

The Gross Profit Ratio is calculated as: $$\text{Gross Profit Ratio}=\left(\frac{\text{Gross Profit}}{\text{Sales}}\right)\times 100$$ Given:

• Gross Profit = Rs. 80,000
• Sales = Rs. 400,000

$$\text{Gross Profit Ratio}=\left(\frac{80,000}{400,000}\right)\times 100=\text{20\%}$$

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v) Net Profit Ratio

The Net Profit Ratio is calculated as: $$\text{Net Profit Ratio}=\left(\frac{\text{Net Profit}}{\text{Sales}}\right)\times 100$$ Given:

• Net Profit = Rs. 50,000
• Sales = Rs. 400,000

$$\text{Net Profit Ratio}=\left(\frac{50,000}{400,000}\right)\times 100=\text{12.5\%}$$