The following is the Profit & Loss Account of avita Private Ltd. for theyear ending 31st December, 1986.$$To Opening stock6,35,0003,15,0001,02,000 By Cash salesPurchases5,29,000Credit sales9,50,00015,000 9,35,00092,000Returns17,000 5,12,000ReturnsСarriageWagesGross Profit5,000 By Closing stock55,0003,53.00010,27,00010,27,000AdministrativeExpenses:3,53,000By Gross ProfitNon-operatingIncome:Salaries35,00020,00015,0005,000RentDividend on shares3,500To DepreciationSundry exp.Selling andDistributionProfit on saleof shares8,50085,000exp:AdvertisingSalesmen'sSalary &1,05,00014,000CommissionOther selling exps.Non-operating exps:Loss on saleof machineryTo Net Profit11,00075,0003,65,0003,65,000You are required to calculate:(1) Gross Profit Ratio(2) Operating Profit Ratio(3) Operating Ratio

Introduction From the given information in the problem we will calculate the ratios in the following…

The following is the Profit & Loss Account of avita Private Ltd. for the year ending 31st December, 1986. $ 1,02,000 By Cash sales $ To Opening stock " Purchases 6,35,000 3,15,000 5,29,000 Credit sales 9,50,000 15,000 9,35,000 92,000 Returns 17,000 5,12,000 Returns Сarriage Wages 5,000 By Closing stock 55,000 Gross Profit 3,53,000 10,27,000 10,27,000 Administrative Expenses: 3,53,000 By Gross Profit Non-operating Income: Salaries 35,000 20,000 15,000 Rent Dividend on shares 3,500 To Depreciation Sundry exp. Selling and Distribution Profit on sale 5,000 of shares 8,500 85,000 exp: Advertising Salesmen's Salary & Commission 1,05,000 14,000 Other selling exps. Non-operating exps: Loss on sale of machinery To Net Profit 11,000 75,000 3,65,000 3,65,000 You are required to calculate: (1) Gross Profit Ratio (2) Operating Profit Ratio (3) Operating Ratio

The following is the Profit & Loss Account of avita Private Ltd. for the year ending 31st December, 1986. $ 1,02,000 By Cash sales $ To Opening stock " Purchases 6,35,000 3,15,000 5,29,000 Credit sales 9,50,000 15,000 9,35,000 92,000 Returns 17,000 5,12,000 Returns Сarriage Wages 5,000 By Closing stock 55,000 Gross Profit 3,53,000 10,27,000 10,27,000 Administrative Expenses: 3,53,000 By Gross Profit Non-operating Income: Salaries 35,000 20,000 15,000 Rent Dividend on shares 3,500 To Depreciation Sundry exp. Selling and Distribution Profit on sale 5,000 of shares 8,500 85,000 exp: Advertising Salesmen's Salary & Commission 1,05,000 14,000 Other selling exps. Non-operating exps: Loss on sale of machinery To Net Profit 11,000 75,000 3,65,000 3,65,000 You are required to calculate: (1) Gross Profit Ratio (2) Operating Profit Ratio (3) Operating 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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Concept explainers

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.

Question

The following is the Profit & Loss Account of avita Private Ltd. for the
year ending 31st December, 1986.
$
$
To Opening stock
6,35,000
3,15,000
1,02,000 By Cash sales
Purchases
5,29,000
Credit sales
9,50,000
15,000 9,35,000
92,000
Returns
17,000 5,12,000
Returns
Сarriage
Wages
Gross Profit
5,000 By Closing stock
55,000
3,53.000
10,27,000
10,27,000
Administrative
Expenses:
3,53,000
By Gross Profit
Non-operating
Income:
Salaries
35,000
20,000
15,000
5,000
Rent
Dividend on shares
3,500
To Depreciation
Sundry exp.
Selling and
Distribution
Profit on sale
of shares
8,500
85,000
exp:
Advertising
Salesmen's
Salary &
1,05,000
14,000
Commission
Other selling exps.
Non-operating exps:
Loss on sale
of machinery
To Net Profit
11,000
75,000
3,65,000
3,65,000
You are required to calculate:
(1) Gross Profit Ratio
(2) Operating Profit Ratio
(3) Operating Ratio

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