MANAGENT ACCOUNTING Question And Answers
- Give the formula for average payment period.
Answer:- Average payment period = Average Trade Creditors / Net Credit Purchases X 100
- Give the formula for inventory conversion period.
Answer:- Inventory conversion period = 365 / Inventory Turnover Ratio
- Give the formula for working capital.
Answer:- Working capital = current assets – current liabilities
- Give the formula for debt –equity ratio.
Answer:- Debt –equity ratio= Total Long Term Debts / Shareholders Fund
- Give the formula for proprietary ratio.
Answer:- Proprietary ratio = Shareholders Fund/ Total Assets
- Give the formula for solvency ratio.
Answer:- Solvency ratio = Total liabilities to outsiders / total assets
- Give the formula for interest coverage ratio.
Answer:- Interest coverage ratio = EBIT / Interest expenses
- Give the rule of thumb for liquidity ratios.
Answer:- Current ratio =2:1, liquid ratio =1:1, absolute liquid ratio = 0.5:1.
- What is EPS?
Answer:- EPS= Net profit/ no of equity shares
- What is included in shareholder’s funds?
Answer:- Shareholders’ funds include equity share capital, preference share capital, retained earnings.
