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NCERT Solutions for Class 12 Accountancy Chapter 5 - Accounting Ratios

Q: 7. What are the four objectives of ‘Analysis of Financial statements’.

The four objectives are:To assess the current profit and operational efficiency of a company as a whole and individual departments to judge the financial condition of the company.To assess the financial condition of the company.To know the reasons for the change in the profitability and financial position of the company.To judge the ability of the company to repay its debt and determine the liquidity position of the company.

NCERT Solutions

NCERT Solutions for Class 12 Accountancy Chapter 5 - Accounting Ratios

Last updated date: 17th Apr 2024

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Class 12 Accountancy NCERT Solutions Chapter 5 - Accounting Ratios

If you are looking for a reliable and quick understanding source for learning the tricky concepts of accountancy, then you need to clear the NCERT syllabus, firstly. After these, you may need extra questions for practice, various diverse logical questions, some high order thinking skills questions, and some basic questions. All the content you require is available at a single point in easily available offline mode too; the free PDFs. You can download free PDF for Class 12 Accountancy company accounts and analysis of financial statements right now. There are a complete series of other chapters and subjects available too. Download Class 12 Accountancy Part 2 Chapter 5 with a single click on the pdf link given below on this page for free.

Class:	NCERT Solutions for Class 12
Subject:	Class 12 Accountancy
Subject Part:	Accountancy Part 2 - Company Accounts and Analysis of Financial Statements
Chapter Name:	Chapter 5 - Accounting Ratios
Content-Type:	Text, Videos, Images and PDF Format
Academic Year:	2024-25
Medium:	English and Hindi
Available Materials:	Chapter Wise Exercise Wise
Other Materials	Important Questions Revision Notes

Related Chapters

Accounting for Share Capital

Issue and Redemption of Debentures

Financial Statements of a Company

Analysis of Financial Statements

Cash Flow Statement

NCERT Solutions for Class 12 Accountancy Chapter 5

NCERT solutions Class 12 Accountancy Part 2 Chapter 5 deals with users of a financial ratio, current and liquidity ratio, solvency position of the firm, important profitability ratios, managers, investors, long term creditors, solving balance sheets, proprietary ratio, and much more related to company accounts. To be a pro in the desired topic you need to first analyze, solve, practice, and then revise it in a proper routine.

NCERT Solutions for Class 12 Accountancy Part 2 Chapter 5 - Accounting Ratios

When it comes to solving mathematical equations, you need a plethora of questions to have a firm hand on it. To understand the exact meaning and concepts of basic terminologies in this chapter, you need to understand the difference between them. The expert faculty are specialized in handling all these technical terms and simplified calculation of mathematical problems. That's where our professional staff works on each step with you, providing all the assets you need to score well. All the questions are designed according to the latest curriculum of CBSE. So, download the free PDF from Vedantu now.

Benefits of NCERT Solutions for Class 12 Accountancy

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NCERT solutions are detailed and each has unique concepts. Thus marking every question as bait for further HOTS questions.
The solutions are entirely precise, pointed, solved step by step, which makes learning easier.
The solutions are specially created according to the latest curriculum of CBSE boards, thus you can use similar answers without any hesitation.
NCERT solutions are available in online lectures as well as offline pdf format, which makes you vulnerable to study at any time.
These solutions are prepared by topic specialized staff in an easily graspable, quick understandable, simplified, and stepwise mechanism.
Understanding and clearing concepts in NCERT solutions helps you to solve other highly logical and mini conceptual problems too.

However, there are plenty of questions of accountancy on Vedantu; but still, teachers mostly focus and recommend the learning of NCERT solutions as a priority! Download the free PDF of Class 12 Accountancy Company Accounts and Analysis of Financial Statements chapter 5 for crystal clear concepts and logical solutions.

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Additional Links for the Reference of the Students

NCERT Solution Links for Accountancy:

Chapter-wise NCERT Solutions:

Conclusion

For those seeking a dependable and efficient resource to master the intricacies of accountancy, commencing with the NCERT syllabus is essential. Alongside this, additional practice is often required, encompassing a range of questions from basic to complex, designed to enhance logical thinking skills. All the necessary content is conveniently consolidated and available for offline use through free PDFs. You can promptly access the PDF for Class 12 Accountancy's company accounts and analysis of financial statements. This resource offers a comprehensive series of chapters and subjects. The Class 12 Accountancy Part 2 Chapter 5 PDF can be effortlessly downloaded with a single click, providing an invaluable aid in your learning journey.

FAQs on NCERT Solutions for Class 12 Accountancy Chapter 5 - Accounting Ratios

1. What are the liquidity ratios?

The ratios which help to determine the company’s ability to pay back the current dues, are known as liquidity ratios. They calculate the short-term solvency of any business that is a simple conversation of assets into the delay. The time duration and loss are considered simultaneously during liquidity ratio calculation.

2. What do you mean by the Debt equity ratio?

The ratio declaring the relationship between the owner's fund and borrower’s fund, is known as Debt equity ratio. A lower ratio of it signifies the company's capability of meeting the long-term obligations. Lower the ratio, the higher the security for lenders.

3. What is the importance of the current ratio?

The importance of the current ratio is observed in the following conditions. Access of current assets in comparison to current liabilities helps to determine the security to creditors and the essence of safety. The current ratio ensures to easily decide the company’s ability to meet its current liabilities perfectly on time.

4. Is Vedantu a reliable source for board studies?

The answer is undoubtedly yes. However, you can try on your own and can find even much more reliability, accuracy, question series, detailed explanations, even more than your expectations.

5. What are the types of Accounting ratios?

Accounting ratios give quick ways to find out a business’s financial condition. Ratios are used more frequently for business analysis. Your finances can be analyzed using ratios. The most common types of accounting ratios are:

Liquidity ratios
Profitability ratios
Leverage ratios
Turnover ratios
Market value ratios

It may not be possible to analyze all the ratios at the same time. It is important to pick a few that are important for your business’s operations.

6. Why are accounting ratios important?

The relationship between the different items available in the financial statement is given by accounting ratios. Therefore, they are very useful for internal management, prospective investors, creditors, and outsiders. Ratios are also useful for measuring the liquidity, solvency, profitability, and management efficiency of a company. Accounting ratios play an important role in increasing the efficiency of the management, reducing the expenditure arid and for increasing the rate of profit, etc.

7. What are the four objectives of ‘Analysis of Financial statements’.

The four objectives are:

To assess the current profit and operational efficiency of a company as a whole and individual departments to judge the financial condition of the company.
To assess the financial condition of the company.
To know the reasons for the change in the profitability and financial position of the company.
To judge the ability of the company to repay its debt and determine the liquidity position of the company.

8. What are the basic concepts covered in Accounting for Partnership Class 12 Accountancy?

Students can download NCERT Solutions Class 12 Accountancy on the internet via Vedantu, which provides all NCERT solutions free of cost. The basic concepts covered include the following:

Concepts of partnership and partnership deed
Computation of appropriation items and change items
Maintenance of capital accounts of partner fixed and fluctuating capital
Profit and loss appropriation account
Adjustments and guarantee of profits to a partner from the past
Valuation and treatment of goodwill.

9. What is the best method to score good marks in Class 12 Accountancy Chapter 5?

The best method to score good marks in Class 12 Accountancy Chapter 5 is to study the chapter thoroughly and understand all concepts. NCERT Solutions Class 12 Accountancy can help students to understand the concepts easily. Students can download NCERT Solutions Class 12 Accountancy from the vedantu website and the app. They can save the notes on their computer and can refer to them for their exam preparation. This can help them to score good marks easily.