Practice Activity (Turnover) Ratios - 1.4.3 | ICSE Class 12 Accounts – Chapter 5: Ratio Analysis | ICSE Class 12 Accounts
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the formula for the Inventory Turnover Ratio?

💡 Hint: Remember the key components involved in the calculation.

Question 2

Easy

Define Debtors Turnover Ratio.

💡 Hint: Think about its impact on cash flow.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the primary purpose of Activity Ratios?

  • To measure profitability
  • To assess efficiency in asset utilization
  • To evaluate liquidity

💡 Hint: Think about what these ratios measure in the context of a business.

Question 2

True or False: A high Debtors Turnover Ratio suggests a company is collecting its receivables effectively.

  • True
  • False

💡 Hint: Recall the impact of the ratio on cash flow.

Solve and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A company has COGS of ₹600,000 and an average inventory of ₹150,000. Calculate its Inventory Turnover Ratio. What does it indicate?

💡 Hint: Remember, higher ratios typically imply better inventory management.

Question 2

A retailer had annual Net Credit Sales of ₹1,200,000 and Average Trade Debtors of ₹400,000. Calculate the Debtors Turnover Ratio and discuss its implications.

💡 Hint: Reflect on what this means for cash flow and collection effectiveness.

Challenge and get performance evaluation