15,00,000 1.5:1 10,00,000 Interpretation: Keeping rs. 15 lakhs of equity funds as security, the form is found to have mobilised rs. 10 lakhs from fixed interest bearing sources. It indicates that the capital structure is low geared. 14 4 Illustration 8: The following are the balance sheet and profit and loss account of sundara products limited as on 31st december 2005. Profit And Loss Account To Opening Stock 1,00,000 By Sales 8,50,000 Purchases 5,50,000 Closing Stock 1,50,000 Direct Expenses 15,000 Gross Profit 3,35,000 10,00,000 10,00,000 3,35,000 By Gross Profit Non-Operating To Admn. Expenses 50,000 Office Establishment 1,50,000 Income 15,000 Financial Expenses 50.000 Non-Operating Expenses/Losses 50,000 Net Profit 50,000 3,50,000 3.50.000 Rs. Liabilities Rs. Equity Share Capital (2000 @ 100) 2,00,000 Reserves 1,50,000 Balance Sheet Assets Land & Buildings Plant & Machinery Stock In Trade 1.50,000 1,00,000 1,50.000 Current Liabilities 1,50,000 P&L A/C Balance P&A 50,000 Sundry Debtors Cash & Bank 1,00,000 50,000 5,50.000 5,50,000 Calculate Turnover Ratios