You have been furnished with the financial information of Aditya Mills Ltd. for the current year.
Sundry debtors and stock at the beginning of the year were `3,00,000 and `4,00,000 respectively.
(a) Determine the following ratios of the Aditya Mills Ltd: (i) Current ratio, (ii) Acid-test ratio, (iii) Stock turnover, (iv) Debtors turnover, (v) Gross profit ratio, (vi) Net profit ratio, (vii) Operating ratio, (viii) Earnings per share, (ix) Rate of return on equity capital, and (x) Market value of the shares if P/E ratio is 10 times,
(b) Indicate for each of the following transactions whether the transaction would improve, weaken or have an effect on the current ratio of the Aditya Mills Ltd: (i) Sell additional equity shares, (ii) Sell 10% debentures, (iii) Pay bills payable, (iv) Collect sundry debtors, (v) Purchase additional plant, (vi) Issuing bills payable to creditors, (vii) Collecting bills receivable from debtors, (viii) Purchase of treasury bills, and (ix) Writing off bad debt.