# NCERT Solutions for Class 12 Accountancy Chapter 10 Accounting Ratios

## Accounting Ratios Class 12 NCERT Solutions

### NCERT Books Solutions for Class 12 Accountancy Chapter 10 Accounting Ratios

NCERT Solutions offer a broad variety of definitions and introduction to the topic for Class 12 Accounts, which includes all the questions provided in the NCERT books.

NCERT Solutions for Class 12 Accountancy Accounting Ratios – Accounting Ratios Class 12 NCERT solutions is known as an extremely helpful resource for preparing for the exam. Takshila Learning provides a huge number of NCERT problems and for Accounting Ratios formula Class 12 notes to its students. CBSE Class 12 Accountancy NCERT Solutions are created by subject matter experts to ensure that students are prepared for a successful grade. The CBSE guidelines were followed when creating the questions in the NCERT Books.

Ratio Analysis Class 12 NCERT solutions provides us with all-inclusive information on all concepts. Since students in class 12 must learn the fundamentals of the topic, this class 12 programme is a detailed study guide that clearly explains the concepts. At any time, you can access and use the direct links for Class 12 NCERT Solutions which is given chapter-wise. The NCERT Solutions for 12th Grade Accounts use a step-by-step approach to clarify the principles, making them easy to understand.

NCERT Solutions for Class 12 Accounts include all of the questions contained in the NCERT books, as well as a variety of meanings and introductions to the topic.

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### Questions And Answers For NCERT Solutions for Class 12 Accountancy Chapter 10 Accounting Ratios

1) What do you mean by Ratio Analysis?

Answer: It is a detailed review of information contained in a financial statement. It depicts the connection between the items on the Balance Sheet and the Income Statement. It aids in the calculation of a company’s operating performance, solvency, and profitability. A ratio is a statistical measure that aids in the comparison of two or more statistics. Accounting users can get valuable information about a company’s financial status, profitability, and viability by Accounting ratios. It also aids management in the development of new policies and frameworks.

2) What are the various types of ratios?

Answer: Ratios can be classified into two types:

1. Traditional Classification
2. Functional Classification

Traditional Classification: Traditional classification is based on financial statements such as the Balance Sheet and the Profit and Loss Account.

The ratios are divided on the basis of accounts of financial statements and are as follows:

• Income Statement Ratios such as Gross Profit Ratios
• Balance Sheet Ratios such as Debt Equity Ratio, Current Ratio
• Composite Ratio: Ratios that contain elements from both Trading and P & L Account.

Functional Classification: These ratios are classified according to the purpose for which they are calculated. These ratios are used to measure a company’s solvency, liquidity, profitability, and financial results. Such ratios are:

• Liquidity Ratio: Ratios used to identify solvency of short term
• Solvency Ratio: Ratios used to identify solvency of long term
• Activity Ratio: Ratios used for identifying operating efficiency of the business. These ratios are related to sales and cost of goods sold.
• Probability Ratio: Ratios used to identify financial performance and viability of the firm.

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