(f) If current liabilities are less than current assets; what does it reflect?
(g) What is net working capital
(h) What is gearing? If gearing is 4:1 what does it reflects? If gearing it 1:4, what does
it reflect?
(i) Why should the balance sheet of the current year be compared with the balance sheet
of the previous year? What statement can be prepared from the comparison?
(j) How can sources and uses of funds be prepared?
(k) What are the sources of new funds? Give examples.
(l) For what purpose can new funds be used? Give Examples.
(m) Can money actually leave the business on account of depreciation shown in Profit
and Loss Account? Yes or No. Give reasons
Level Ten:
(a) What is solvency ratio What does it indicate?
(b) What does high solvency ratio indicate? What does low solvency ratio indicate?
(c) What is Current ratio? What does it measure?
(d) What is quick ratio? What does it measure?
(e) If current ratio is less than 1:1, what does it indicate? If the current ratio is greater
than 1:1. what does it indicate?
(f) ____ is more important than profit
Level Eleven:
(a) Gross profit =
(b) Operating profit =
(c) Profit before tax =
(d) Net profit after tax =
(e) Return on capital employed can be calculated by using formula =
(f) Return on share holders funds will be measured by using formula =
(g) Total assets - Current liabilities = _
(h) Capital employed is equal to shareholders fund + ___
Level Twelve:
(a) What are the limitations of Balance Sheet?
(b) Whether balance sheet reveals the picture regarding stability?
Frame. 8
Calculate the following for the years 1990 and 1991 using figures in the balance sheet
and Profit and Loss Account given below:
(a) Return on Capital employed
(b) Current Ratio;
(c) Debt/Equity Ratio;