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Current Ratio of a firm is 1 : 1. What will be the Net Working Capital ?
a. 0
b. 1
c. 100
d. 200
Ans - a
Explanation :
It suggest that the Current Assets is equal to Current Liabilities hence the NWC would be 0
(since NWC = C.A - C.L)
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Suppose Current Ratio is 4 : 1. NWC is Rs.30,000/-. What is the amount of Current Assets ?
a. 10000
b. 30000
c. 40000
d. 50000
Ans - c
Explanation :
Let Current Liabilities = a
4a - 1a = 30,000
a = 10,000 i.e. Current Liabilities is Rs.10,000
Hence Current Assets would be
4a = 4 x 10,000 = Rs.40,000/-
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The amount of Term Loan installment is Rs.10000/ per month, monthly average interest on TL is Rs.5000/-. If the amount of Depreciation is Rs.30,000/- p.a. and PAT is Rs.2,70,000/-. What would be the DSCR ?
a. 1
b. 1.5
c. 2
d. 2.5
Ans - C
Explanation :
DSCR = (PAT + Depr + Annual Intt.) / Annual Intt + Annual Installment
= (270000 + 30000 + 60000 ) / 60000 + 12000
= 360000 / 180000
= 2
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A Company has Net Worth of Rs.5 Lac, Term Liabilities of Rs.10 Lac. Fixed Assets worth RS.16 Lac and Current Assets are Rs.25 Lac. There is no intangible Assets or other Non Current Assets. Calculate its Net Working Capital.
a. 1 lac
b. 2 lac
c. - 1 lac
d. - 2 lac
Ans - c
Explanation :
Total Assets = 16 + 25 = Rs. 41 Lac
Total Liabilities = NW + LTL + CL = 5 + 10 + CL = 41 Lac
Current Liabilities = 41 – 15 = 26 Lac
Therefore Net Working Capital = CA – CL = 25 – 26 = (-) 1 Lac
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Merchandise costs - Rs. 250000, Gross Profit - Rs. 23000, Net Profit - Rs. 15000. Find the amount of sales.
a. 227000
b. 235000
c. 265000
d. 273000
Ans - d
Explanation :
Amount of sales = Merchandise costs + Gross Profit
= 250000 + 23000
= 273000
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Total Liabilities of a firm is Rs.100 Lac and Current Ratio is 1.5 : 1. If Fixed Assets and Other Non Current Assets are to the tune of Rs. 70 Lac and Debt Equity Ratio being 3 : 1. What would be the Long Term Liabilities?
a. 40 Lacs
b. 60 Lacs
c. 80 Lacs
d. 100 Lacs
Ans - b
Explanation :
Total Assets = Total Liabilities = 100 Lac
Current Asset = Total Assets - Non Current Assets
= Rs. 100 L - Rs. 70 L
= Rs. 30 L
If the Current Ratio is 1.5 : 1
then Current Liabilities works out to be Rs. 20 Lac.
That means, Net Worth + Long Term Liabilities = Rs. 80 Lacs.
If the Debt Equity Ratio is 3 : 1,
then Debt works out to be Rs. 60 Lacs and equity Rs. 20 Lacs.
Therefore the Long Term Liabilities would be Rs.60 Lac.
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Current Ratio = 1.2 : 1.
Total of balance sheet being Rs.22 Lac.
The amount of Fixed Assets + Non Current Assets is Rs. 10 Lac.
What would be the Current Liabilities?
a. 10 Lacs
b. 12 Lacs
c. 16 Lacs
d. 22 Lacs
Ans - a
Explanation :
Total Assets is Rs.22 Lac.
Fixed Assets + Non Current Assets is Rs. 10 Lac
Then Current Assets = 22 – 10 = Rs. 12 Lac.
Current Ratio = 1.2 : 1
Current Liabilities = Rs. 10 Lac
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