Doubts

SOLUTION While calculating Inventory Turnover Ratio it is not included in Inventories.

SOLUTION A high inventory turnover ratio indicates that inventory is being rotated into Revenue from Operations more quickly. An improvement in this ratio shows that either the same volume of…

SOLUTION Inventory turnover ratio will decline because Cost of Revenue from Operations remains the same whereas average inventory increases.Note: Cost of Revenue from Operations will remain the same because there…

SOLUTION Inventory turnover ratio will improve because cost of Revenue from Operations increases whereas average inventory decreases.

SOLUTION Inventory turnover ratio will decline because increase in the value of closing inventory by Rs. 5,000 will decrease the cost of Revenue from Operations [Opening Inventory + Purchases Closing…

SOLUTION Debt-equity ratio will decrease because conversion of debentures into preference shares will reduce the long-term debts but increase the shareholder’s funds.

SOLUTION There will be no effect on debt-equity ratio because the long-term loans as well as the Shareholder’s Funds remain unchanged.

SOLUTION Decrease.

SOLUTION Debt-equity ratio will decrease because the Long-term Loans remain unchanged whereas the Shareholder’s Funds are increased by the amount of share capital issued.