Reference no: EM132596031

Question 1: Calculate the following ratios from the given Balance Sheet:

(a) Current ratio (b) Fixed assets to Net worth ratio (c) Debt equity ratio (d) Return on capital employed.

Balance Sheet

                                             Liabilities Amount                     Assets Amount

600 shares of Rs 100 each       60,000                               Land 40,000

General Reserve                   35,000                                 Plant 20,000

Dividend Equalisation reserve 5,000                                 Machines 27,500

Long term loans 20,000                                               Investments 25,000

Bills payable         30,000                                             Inventories 30,000

Provision for tax 5,000                                              Bills receivable 13,500

Profit and Loss a/c 1,000                                            Cash and Bank 12,000

Current year 20,000 21000                                       Preliminary expenses 8,000

                            176000                                          176000