Aud Bu Particulars x x Net Profit before Interest and Tax 530,000 6,00,000 i) nol = Net Prof before interest and Tar. 499 20.000. a £00,000. 00 «: : Capital Employed 25,00,000 "10° 30,00,000 * 100 = 20% Net Profi after tax 265,000 300,000 (i) Net Profit Ratio = Net Profit afer 2, 199 285.000. 100 = 10% 0.000 00 Fevenve from Operations 36,50,000 35,06,000 * 100° 10.3% B Limited is earning better profit margin yet the return on capital employed of A Ltd. is better. It is making better and efficient use of its financial resources. Net credit revenue from operations ‘Average trade receivables _ __Number of days na year Trade Receivables Turnover Ratio |. Trade Receivables Turnover Ratio Debt Collection Period (in days) Xia. Yuta. Trade Receivables, = ___#7,00,000 ___ %7,00,000 €10,00,000 ___ @ 10,00,000 Turnover Ratio ©, 20,000 + & 80,000 - %1,00,000 | ®2,80,000 + € 1,20,000 ¥ 2,00,000 2 2 Times Times Debt Collection Period (in | 365 days. 365 days aa = 2 82¥8. = 52 days (approx) SEAS 73 days ‘After analysing the above ratios, it is clear that debt collection department of X Ltd. is not working efficiently as compared Y Ltd. Itis evident from the data given below : Particular xual vied z z Days Granted as 30 ‘Actual Days for Collection 52 2B Delayed Collection Tay = Days Saved 2 Tas Accountane)