CHAPTER ONE Financial Statements; Analysis and Interpretation 3.59 18. Explain any two of the following: (1) Gross Profit Ratio (if) Stock Turnover Ratio Proprietary Ratio The four basic group of financial ratios are liquidity, leverage, activity (efficiency) and profitability. Explain their nature and indicate its principal users. 12 State the limitations of financial ratios. ( Write short notes on: () Proprietary Ratio (i) Debt Coverage Ratio (un) PE Ratio (iv) Yield Ratio (v) Market Value/Book Value of Shares PRACTICAL PROBLEMS Computation of Ratios From the following statements of X Lid for the year ending 31 March 2007, you are required to rearrange the items for purposes of financial analysis and calculate the following ratios: in current ratio, (in) quick ratio, (fil) operating ratio, (iv) stock turnover ratio, (v) fixed assets turnover ratio, (w) debtors' turnover ratio, and (vil) net profit to capital employed. Balance Sheet Liabilities Assets Share Capital: Land and Buildings 5,00,000 Issued and fully paid up Plant and Machinery 2,00,000 50,000 Equity shares of