The following information has been obtained from the books of Vivek Ltd. : $\displaystyle 10$% Debentures $\displaystyle 15,00,000$ Current Liabilities $\displaystyle 2,00,000$ Non-Current Assets $\displaystyle 25,00,000$ Current Assets $\displaystyle 7,00,000$ During the year ended 31st March, $\displaystyle 2024$, net profit after interest and tax amounted to $\displaystyle 4,10$,000. Tax paid was $\displaystyle 40$,000. Calculate Return on Investment.

OR

Calculate 'Operating Ratio' from the following information : T Revenue from operations Cash $\displaystyle 5,00,000$ Credit $\displaystyle 20,00,000$ Purchases Cash $\displaystyle 2,00,000$ Credit $\displaystyle 10,00,000$ Carriage Inward $\displaystyle 20,000$ Salaries $\displaystyle 1,45,000$ Increase in inventory $\displaystyle 50,000$ Wages $\displaystyle 85,000$

Return on Investment= Net Profit before interest and tax x $\displaystyle 100$ Capital employed Interest on $\displaystyle 10$% debentures = $\displaystyle 10$/$\displaystyle 100$ x $\displaystyle 15,00,000$ = ₹$\displaystyle 1,50,000$ $\displaystyle 1$ Net Profit before interest and tax =Net Profit after interest and tax + Tax + Interest on $\displaystyle 10$%debentures = $\displaystyle 4,10,000$ + $\displaystyle 40,000$ + $\displaystyle 1,50,000$ = ₹$\displaystyle 6,00,000$ $\displaystyle 1$ Page $\displaystyle 13$ of $\displaystyle 17$ Capital employed = Non Current Assets + Current Assets – Current Liabilities = $\displaystyle 25,00,000$ + $\displaystyle 7,00,000$ – $\displaystyle 2,00,000$ = ₹$\displaystyle 30,00,000$ $\displaystyle 1$ Return on Investment= Net Profit before interest and tax x $\displaystyle 100$ Capital employed Return on Investment = $\displaystyle 6,00,000$ x $\displaystyle 100$ $\displaystyle 30,00,000$ $\displaystyle 1$ = $\displaystyle 20$% Q.(b) Calculate ‘Operating Ratio’ ……………………………. Ans. Operating Ratio = Operating Cost x $\displaystyle 100$………………………………$\displaystyle 1$ Revenue from operations Operating Cost = Cost of revenue from operations + Operating expenses Cost of revenue from operations =$\displaystyle 2,00,000$+ $\displaystyle 10,00,000$+ $\displaystyle 20,000$-$\displaystyle 50,000$+$\displaystyle 85,000$ = ₹$\displaystyle 12,55,000$ Operating expenses = ₹$\displaystyle 1,45,000$ Operating Cost = $\displaystyle 12,55,000$ + $\displaystyle 1,45,000$ = ₹$\displaystyle 14,00,000$ $\displaystyle 1$ Revenue from operations = Cash revenue from operations + Credit revenue from operations = $\displaystyle 5,00,000$ + $\displaystyle 20,00,000$ = ₹$\displaystyle 25,00,000$ $\displaystyle 1$ Operating Ratio = Operating Cost x $\displaystyle 100$ Revenue from operations Operating ratio = $\displaystyle 14,00,000$ x $\displaystyle 100$ $\displaystyle 25,00,000$ $\displaystyle 1$ =$\displaystyle 56$%