The Balance Sheet of Punjab Auto Limited as on 31-12-2002 was as follows: Particular Particular Equity Share Capital Capital Reserve 8% Loan on Mortgage Creditors Bank overdraft Rs. Rs. 40,000 Plant and Machinery 8,000 Land and Buildings 32,000 Furniture & Fixtures 16,000 Stock 4,000 Debtors 24,000 40,000 16,000 12,000 12,000 Taxation: Current Investments (Short-term) 4,000 Cash in hand 4,000 12,000 Future 4,000 Profit and Loss A/c 12,000 1,20,000 From the above, compute (a) the Current Ratio, (b) Quick Ratio, (c) Debt-Equity Ratio, and (d) 1,20,000 Proprietarv Ratio.

The Balance Sheet of Punjab Auto Limited as on 31-12-2002 was as follows: Particular Particular Equity Share Capital Capital Reserve 8% Loan on Mortgage Creditors Bank overdraft Rs. Rs. 40,000 Plant and Machinery 8,000 Land and Buildings 32,000 Furniture & Fixtures 16,000 Stock 4,000 Debtors 24,000 40,000 16,000 12,000 12,000 Taxation: Current Investments (Short-term) 4,000 Cash in hand 4,000 12,000 Future 4,000 Profit and Loss A/c 12,000 1,20,000 From the above, compute (a) the Current Ratio, (b) Quick Ratio, (c) Debt-Equity Ratio, and (d) 1,20,000 Proprietarv Ratio.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Solve the below problem with the help of required ratio formulas and comment on the company’s position.

The Balance Sheet of Punjab Auto Limited as on 31-12-2002 was as follows:
Particular
Equity Share Capital
Capital Reserve
8% Loan on Mortgage
Rs.
Particular
Rs.
40,000 Plant and Machinery
8,000 Land and Buildings
32,000 Furniture & Fixtures
16,000 Stock
4,000 Debtors
24,000
40,000
16,000
12,000
Creditors
Bank overdraft
12,000
Taxation:
Investments (Short-term)
4,000
4,000 Cash in hand
4,000
12,000
1,20,000
Current
12,000
Future
Profit and Loss A/c
1,20,000
From the above, compute (a) the Current Ratio, (b) Quick Ratio, (c) Debt-Equity Ratio, and (d)
Proprietary Ratio.

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