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It means current assets of Rs.2.90 are available against each rupee of current liability.The position is satisfactory on the basis of current ratio. It means greater part of current assets constitute stock; the stock is slow-moving. The firm can increase the rate of return on investment by increasing production.It is for verification of financial statement and report.
So as per the area of its activities the subject is segmented as It is an important managerial activities, includes analysis of financial transactions, reports and information for taking the best decision for the business.
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On the other hand, low Turnover Ratio and long collection period reflects that payments by debtors are delayed.
Problem 9: The Capital of a Company is as follows: Problem 10: Assume that a firm has owners’ equity of Rs. The ratios for the firm are: Problem 11: With the following ratios and further information given below, prepare a Trading, Profit and Loss Account and Balance Sheet: Problem 12: Extract from financial accounts of X, Y, Z Ltd.
The average collection period ratio measures the quality of debtors since it indicates the rapidity or slowness of their collectability.
The shorter the average collection period, the better the quality of debtors.External audit is to verify the authenticity of the report made by the internal team by an external auditor.Market price of a product varies with different factors and profit is directly proportionate with it and inversely proportionate with the cost of the product.for the year ended 31st December: Problem 4: From the following Balance Sheet and additional information, you are required to calculate: (i) Return on Total Resources(ii) Return on Capital Employed(iii) Return on Shareholders’ Fund Problem 5: A company has capital of Rs.10, 00,000; its turnover is 3 times the capital and the margin on sales is 6%. Problem 6: Ram & Company supplies you the following information regarding the year ended 31st December: Significance: A high Inventory turnover ratio is better than a low ratio.for vivid information you can get in touch with our Accounting assignment Problem Solver at university homework help.But here we are trying to discuss about the segmentation of the subject topic in a nutshell only for our readers.A business entity cannot enhance the market price to earn maximum profit but can curtail production cost to maximize the profit.This branch of accounts deals all factors and information related to production cost and the way to minimize it.A high ratio implies good inventory ‘management and an indication of under-investment.It will adversely affect the ability of a firm to meet customers’ demand. 50Cash collected from Debtors during the year Rs, 5,000Bad Debts Rs.