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From the following Balance Sheet and other information, calculate following ratios: 

1. Debt-Equity Ratio 

2. Working Capital Turnover Ratio 

3. Trade Receivables Turnover Ratio

Additional Information: Revenue from Operations Rs 18,00,000 (Debt-Equity Ratio 0.63 : 1; Working Capital Turnover Ratio 1.39 times; Trade Receivables Turnover Ratio 2 times)

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1. Debt – Equity Ratio

Debt – Equity Ratio = Debt/Equity

Debt = Long Term Borrowings = Rs 12,00,0000 Equity = share Capital + Reserve and Surplus 

= 10,00,000 + 9,00,000 = Rs. 19,00,000

2. Working Capital Turnover Ratio Working Capital Turnover Ratio

 

Revenue from Operations = Rs.18,00,000 Working capital = Current Assets – Current Liabilities 

= 18,00,000 – 5,00,000 = Rs. 13,00,000

3. Trade Receivables Turnover Ratio

Trade Receivables Turnover Ratio

Net credit sales = Rs. 18,00,000 Avereagre Trade Receivables 

= Rs.9,00,000 

Notes: 

1. Revenue from Operations are assumed to be revenue generated from credit sales. 

2. The amount of trade receivables given in the Balance Sheet is assumed to be Average Trade Receivables.

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