Download the latest CBSE Class 12 Accountancy Partnership Ratio Analysis Notes in PDF format. These Class 12 Accountancy revision notes are carefully designed by expert teachers to align with the 2025-26 syllabus. These notes are great daily learning and last minute exam preparation and they simplify complex topics and highlight important definitions for Class 12 students.
Chapter-wise Revision Notes for Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios
To secure a higher rank, students should use these Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios notes for quick learning of important concepts. These exam-oriented summaries focus on difficult topics and high-weightage sections helpful in school tests and final examinations.
Part 2 Chapter 5 Accounting Ratios Revision Notes for Class 12 Accountancy
BALANCE SHEET
As at 31st March, 2012
Particulars
I. EQUITY AND LIABILITIES
Equity Share Capital 3,00,000
Preference Share Capital 1,00,000
Reserves 50,000
Profit & Loss Balance 65,000
12% Mortgage Loan 1,80,000
Current Liabilities 1,20,000
TOTAL 8,15,000
II. ASSETS:
Fixed Assets 4,50,000
Share Issue Expenses 15,000
Current Assets 3,50,000
TOTAL 8,15,000
What conclusions do you draw from the above ratios?
SOLUTION 5.
(i) Debt Equity Ratio = Debt/Equity or Long term Loans/Shareholder's Funds
Shareholder’s Funds = Equity Share Capital + Pref. Share Capital + Reserves + P & L Balance – Share Issue Exp.
= 3,00,000 + 1,00,000 + 50,000 + 65,000 – 15,000
= 5,00,000
Mortgage Loan is Long Term Loan,
Hence, Debt Equity Ratio = 1,80,000/5,00,000 =.36 : 1
Comments: This ratio indicates what proportion of funds is provided by Longterm loans in comparison to Shareholder’s funds. Generally, the ratio should not be more than 2 : 1. Debt-Equity ratio of the above company is .36:1,
which indicates that long-term loans are only .36 in comparison to shareholder’s funds. Hence, it may be considered that the long-term financial position of the company is very sound.
(ii) Total Assets to Debt Ratio = Total Assets/Debt
= Fixed Assets+ Current Assets/Long-term Loans
= 4,50,000 + 3,50,000/1,80,000 =4.44 : 1
Comments: Total assets of this company are 4.44 times in comparison to long-term debts of the company. The higher ratio indicates the use of lower debts in financing the assets which means higher security to lenders.
(iii) Proprietary Ratio = Equity/Total Assets
= Shareholder's Funds/Fixed Assets + Current Assets
= 5, 00,000
4, 50,000 + 3, 50,000
= 0.625 or 62.5%
Comments: Shareholder’s Funds of this Company are 62.5% in comparison to total assets of the company. In other words, 62.5% of the total assets of the company are funded by equity which indicates that the long-term financial position of the company is very sound.
QUESTION 6.
From the following balance sheet and other information calculate (i) Working Capital Turnover Ratio, (ii) Debt Equity Ratio and (iii) Trade Receivables Turnover Ratio.
BALANCE SHHET
As at 31st March, 2012
Particulars
I. EQUITY AND LIABILITIES
Share Capital 2,00,000
General Reserve 80,000
Profit and Loss 1,20,000
Loan @ 15% 2,40,000
Trade Payables 1,00,000
TOTAL 7,40,000
II. ASSETS:
Fixed Assets 3,60,000
Inventory 80,000
Trade Receivables 1,80,000
Cash 1,00,000
Preliminary Expenses 20,000
TOTAL 7,40,000
Please click the link below to download pdf file for CBSE Class 12 Partnership - Ratio Analysis Notes.
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Important Practice Resources for Class 12 Accountancy
CBSE Class 12 Accountancy Part 2 Chapter 5 Accounting Ratios Notes
Students can use these Revision Notes for Part 2 Chapter 5 Accounting Ratios to quickly understand all the main concepts. This study material has been prepared as per the latest CBSE syllabus for Class 12. Our teachers always suggest that Class 12 students read these notes regularly as they are focused on the most important topics that usually appear in school tests and final exams.
NCERT Based Part 2 Chapter 5 Accounting Ratios Summary
Our expert team has used the official NCERT book for Class 12 Accountancy to design these notes. These are the notes that definitely you for your current academic year. After reading the chapter summary, you should also refer to our NCERT solutions for Class 12. Always compare your understanding with our teacher prepared answers as they will help you build a very strong base in Accountancy.
Part 2 Chapter 5 Accounting Ratios Complete Revision and Practice
To prepare very well for y our exams, students should also solve the MCQ questions and practice worksheets provided on this page. These extra solved questions will help you to check if you have understood all the concepts of Part 2 Chapter 5 Accounting Ratios. All study material on studiestoday.com is free and updated according to the latest Accountancy exam patterns. Using these revision notes daily will help you feel more confident and get better marks in your exams.
You can download the teacher prepared revision notes for CBSE Class 12 Accountancy Partnership Ratio Analysis Notes from StudiesToday.com. These notes are designed as per 2025-26 academic session to help Class 12 students get the best study material for Accountancy.
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