accounting

3. Given, Net Profit after tax Rs. 3,25,000 Rate of Income tax 50% 12.5% convertible debentures of Rs. 100 each Rs. 4,00,000 Fixed assets (at cost) Rs. 12,30,000 Depreciation up-to-date Rs. 2,30,000 Current assets Rs. 7,50,000 Current liabilities Rs. 3,50,000 Return on Investment is

25%
30%
40%
50%

Detailed SolutionGiven, Net Profit after tax Rs. 3,25,000 Rate of Income tax 50% 12.5% convertible debentures of Rs. 100 each Rs. 4,00,000 Fixed assets (at cost) Rs. 12,30,000 Depreciation up-to-date Rs. 2,30,000 Current assets Rs. 7,50,000 Current liabilities Rs. 3,50,000 Return on Investment is

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4. You have a large residual fund which you wish to invest in a firm for long term. Which of the following ratio would be most appropriate for you to decide

$$ rac{{{ ext{Gross debt}}}}{{{ ext{Net debt}}}}$$
$$ rac{{{ ext{Long term debt}}}}{{{ ext{Gross capitalization}}}}$$
$$ rac{{{ ext{Gross debt}}}}{{{ ext{Gross equity share capital}}}}$$
$$ rac{{{ ext{Net average profit}}}}{{{ ext{Gross share capital}}}}$$

Detailed SolutionYou have a large residual fund which you wish to invest in a firm for long term. Which of the following ratio would be most appropriate for you to decide

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