X 100 Operating Ratio Cost of goods sold + Operating expenses Sales 17,50,000 + 3,30,000 x 100 = 86.67% 24.00.000 Working Note 6) Cost of Goods Sold - opening stock + Purchase + Wages + Factory expenses - Closing stock = 2,50,000 + 10,50,000 + 4,00,000 + 2,00,000 - 1,50,000 = Rs. 17,50,000 Operating Expenses - Administration expenses + Selling and distribution expenses = 2,30.000 + 1,00,000 = 3,30,000 Net Profit Ratio = 100% - Operating Ratio - 100% - 86.67% = 13.33% Illustration 7 From the financial information of Yahoo Ltd., given below, calculate activity or tumover ratios 9 Balance sheet as on 31" March, 2007 Balance shoot as on 31" March, 2007 Rs. Liabilities 30,00,000 Equity share capital 10,00.000 10% Preference share capital 14,00.000 Retained earnings 18,00,000 12% secured debentures 9.50,000 Sundry creditors 5,00,000 Bills payable 3,50,000 Income tax provision 90,00,000 Assets Fixed assets 62,00.000 Inventory 10.60,000 Sundry debtors 8,50,000 Bills receivable 6,50.000 Cash 2.40,000 90,00.000 Additional Information Profit before interest and depreciation 25,00.000 Depreciation 8,00,000 Interest 2.16.000 Tax @ 50% loan installment payable during the year Rs. 3, 00,000 Equity dividend declared during the year 18% you are required to calculate long-term solvency ratios