In subparts (i) and (ii) chose the correct option and in subparts (iii) to (v) answer the questions as instructed.

(i) What will be the Operating Ratio of Zenia Ltd. from the particulars given below?

Revenue from Operations: ₹ 9,00,000 Gross Profit: 20% on cost Operating Expenses: ₹ 60,000

(a) 86·67%
(b) 90%
(c) 76·67%
(d) 20%

(ii) How is interest paid on debentures considered in a Cash Flow Statement?

(a) As an Operating Activity
(b) As a Financing Activity
(c) As an Investing Activity
(d) Both as an Operating Activity and a Financing Activity

(iii) State the objective of calculating Liquidity Ratios.

(iv) Mention the accounting basis on which a Cash Flow Statement is prepared.

(v) What is Gross Profit + Cost of Materials consumed?

Solution

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