Question 5:

PLease, write the answer in Word format with Formulae written

1. Calculate (i) debt-equity ratio and (ii) Liquid ratio iii) Turnover ratios from the following balance sheet and additional information.

Balance Sheet

Liabilities	Amount -	Assets	Amount -
Equity shares of 10 each	100,000	Goodwill	60,000
Reserves	20,000	Fixed Assets at cost	140,000
Profit and loss account	30,000	Stock	30,000
Secured loan	80,000	Sundry debtors	30,000
Sundry Creditors	50,000	Advances	10,000
Provision for taxation	20,000	Cash	30,000
	300,000		300,000

The sales for the year were 560,000 and 25% was on cash. Opening Stock & Debtors is 18,000 each.

2. Ratio analysis is a quantitative analysis of data enclosed in an enterprises financial statements. Expound the advantages and limitations of ratio analysis.