Balance Sheet as at............. Liabilities Assets Capital Reserves and surplus Bank overdraft Other current liabilities 2,00,000 40.000 10.000 30.000 2.80.000 Fixed assets Stock Other current assets 1,80,000 40.000 60,000 2.80.000 Note: Alternatively liquid ratio can be interpreted as: (Current assets -Stocks) Liquid ratio = (Current liabilities - Bank overdraft) Then the value of stock and other current assets will be changed accordingly. From the final accounts of Prudent Ltd. given below, calculate the following: (i) gross profit ratio: (ii) current ratio: 45 (ii) liquid ratio; and (iv) return on investment ratio. Trading and Profit & Loss Account for the year ended 31st March, 2014 By Sales By Profit By Interest on investment 8,50.000 6,000 3,000 To Material consumed: Opening stock 90,500 Purchases 5.45.250 6,35,750 Less: Closing stock : 1.40.000 To Carriage inwards To Office expenses To Sales expenses To Financial expenses To Loss on sales of fixed assets To Net profit 4,95,750 14.250 1,50,000 30,000 15,000 4,000 1,50.000 8.59.000 8.59.000 Balance Sheet as on 31st March, 2014 Assets Liabilities 1,50,000 80.000 2,30,000 Share capital: 20,000 equity shares of 210 each, fully paid General reserve Profit & Loss Account Bank overdraft Sundry creditors For expenses For others Fixed assets: Buildings 2,00,000 Plant 90,000 60,000 Current assets: 30,000 Stock-in-trade Debtors Bills receivable 1.00.000 Bank balance 4.80.000 1.40,000 70,000 10,000 30.000 20,000 80.000 2.50.000 4.80.000