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Important Questions: CBSE Class 12 Accountancy Chapter 10 Accounting Ratios

Accounting Ratios is a scoring chapter in CBSE Class 12 Accountancy, consistently contributing 8-10 marks to Part A of the Board examination. The 2025 syllabus emphasizes liquidity, solvency, activity, and profitability ratios, blending computational accuracy with interpretative skills. This collection of important questions spans 1-mark MCQs, 3-mark numerical problems, and 5-mark case studies, mirroring actual Board paper patterns and helping you internalize NCERT terminology.

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Key takeaways

  • ✓Chapter 10 Accounting Ratios typically carries 8-10 marks in CBSE Class 12 Accountancy Board papers, split between numerical and analytical questions.
  • ✓Liquidity ratios (current ratio, quick ratio) and solvency ratios (debt-equity ratio, proprietary ratio) appear every year with high predictability.
  • ✓Activity ratios like inventory turnover, debtors turnover, and working capital turnover test calculation speed and formula accuracy.
  • ✓Profitability ratios including gross profit ratio, net profit ratio, operating ratio, and return on investment demand clear understanding of numerator-denominator components.
  • ✓Case-based 5-mark questions now dominate the pattern, integrating multiple ratios with interpretation of financial health and comparative analysis.
  • ✓Common errors include using closing stock instead of average stock, mixing up cost of revenue from operations and revenue from operations, and wrong treatment of provisions.
  • ✓CBSETUTOR.ai offers 24×7 AI tutoring at ₹999/month for all classes 6-12, where students can upload ratio problems by photo and get step-by-step solutions instantly — 3-day free trial available.

Chapter Overview and Marks Weightage in CBSE Board Exam

Chapter 10 Accounting Ratios forms the analytical core of CBSE Class 12 Accountancy Part A: Financial Statements Analysis. The chapter introduces four families of ratios: liquidity (current ratio, quick ratio), solvency (debt-equity ratio, total assets to debt ratio, proprietary ratio, interest coverage ratio), activity (inventory turnover, trade receivables turnover, trade payables turnover, working capital turnover), and profitability (gross profit ratio, operating ratio, operating profit ratio, net profit ratio, return on investment, earnings per share). Over the past five years, this chapter has consistently fetched 8-10 marks distributed as 2-3 MCQs (1 mark each), one 3-mark numerical, and one 5-mark case-based question. The May 2024 paper featured a 5-mark integrated case requiring calculation of six ratios and interpretation; the December 2023 compartment paper had a 4-mark question on activity ratios with two parts. Examiners favour scenarios where Balance Sheet and Statement of Profit and Loss extracts are given, testing your ability to identify correct figures, apply formulae accurately, and comment on trends or comparative performance.
  • Typical distribution: 2-3 MCQs (3 marks) + one 3-mark question + one 5-mark case = 10-11 marks total
  • Liquidity and profitability ratios appear in 90% of papers; activity ratios in 70%; solvency ratios in 60%
  • Case-based questions often combine 4-5 ratios with sub-parts asking for interpretation or suggestion of improvement
  • May 2024 Outside Delhi paper: Q18 was a 5-mark case on a manufacturing company requiring current ratio, quick ratio, debt-equity ratio, inventory turnover, and return on investment
  • Numerical accuracy is paramount — even correct method with calculation error fetches only partial marks

1-Mark Questions: Multiple Choice and Very Short Answer

One-mark questions test conceptual clarity and formula recall. CBSE uses stand-alone MCQs and assertion-reason pairs. Below are ten typical 1-mark questions drawn from NCERT and past Board papers, complete with answers. Practice these to secure quick wins in Part A Section-I. Remember, negative marking does not apply, but careless reading costs easy marks. Pay attention to terms like 'liquid assets', 'cost of revenue from operations', 'capital employed', and 'equity share capital'. The Board often tests exclusions and inclusions (e.g. whether to include provisions for doubtful debts in quick liabilities, or how to treat bank overdraft). For assertion-reason MCQs introduced in the 2023 pattern, read both statements independently before choosing. CBSETUTOR.ai's MCQ drill module has 200+ ratio-based MCQs with instant explanations, helping you spot traps and build speed. At ₹999/month for every CBSE class, it is a cost-effective supplement to school revision classes.
  • Q1. Current Ratio is 2.5:1 and Current Liabilities are ₹80,000. Current Assets =? — Answer: ₹2,00,000 (2.5 × 80,000)
  • Q2. Quick Ratio is also called: (a) Defensive Interval Ratio (b) Acid-test Ratio (c) Proprietary Ratio (d) Stock Turnover Ratio — Answer: (b) Acid-test Ratio
  • Q3. Debt-Equity Ratio is 0.5:1. If Total Debt is ₹2,00,000, Shareholders' Funds =? — Answer: ₹4,00,000 (Debt ÷ Equity = 0.5; Equity = 2,00,000 ÷ 0.5)
  • Q4. Inventory Turnover Ratio is calculated as: (a) Cost of Revenue from Operations ÷ Average Inventory (b) Revenue from Operations ÷ Closing Inventory (c) Gross Profit ÷ Average Inventory (d) Purchases ÷ Average Inventory — Answer: (a)
  • Q5. If Operating Ratio is 85%, Operating Profit Ratio =? — Answer: 15% (Operating Profit Ratio = 100 − Operating Ratio)
  • Q6. Which of the following is NOT a profitability ratio? (a) Return on Investment (b) Gross Profit Ratio (c) Proprietary Ratio (d) Net Profit Ratio — Answer: (c) Proprietary Ratio (it is a solvency ratio)
  • Q7. Trade Receivables Turnover Ratio indicates the efficiency of: (a) Collection from debtors (b) Payment to creditors (c) Inventory management (d) Cash management — Answer: (a)
  • Q8. Liquid Assets = Current Assets − (Inventory + Prepaid Expenses). True or False? — Answer: True (as per NCERT definition)
  • Q9. Earnings Per Share is calculated for: (a) Preference Shareholders (b) Equity Shareholders (c) Debenture holders (d) All stakeholders — Answer: (b)
  • Q10. Interest Coverage Ratio = Net Profit before Interest and Tax ÷ Interest. True or False? — Answer: True

2-Mark Questions with Model Answers

Two-mark questions typically ask for one ratio calculation or a brief definition with example. These appear less frequently in the current pattern but are common in school pre-Board and practice papers. Each 2-mark answer should include the formula, substitution of values, and final answer with proper units or ratio notation. CBSE marking schemes award one mark for correct formula and one for accurate computation. Below are four representative 2-mark questions with step-wise solutions. Notice the emphasis on showing working clearly — examiners deduct half a mark for direct answers without method. Always write the formula first, then substitute figures, then compute. This disciplined approach also helps you catch errors mid-calculation. If you are stuck on a formula or concept, CBSETUTOR.ai allows you to snap a photo of your Balance Sheet or question and receive an instant walkthrough, available round-the-clock at a flat ₹999 monthly fee across all classes 6 through 12.
  • Q11. From the following, calculate Current Ratio: Current Assets ₹5,00,000; Current Liabilities ₹2,00,000. (2 marks) — Answer: Current Ratio = Current Assets ÷ Current Liabilities = 5,00,000 ÷ 2,00,000 = 2.5:1 or 2.5.
  • Q12. If Gross Profit is ₹1,20,000 and Revenue from Operations (Net Sales) is ₹6,00,000, calculate Gross Profit Ratio. (2 marks) — Answer: Gross Profit Ratio = (Gross Profit ÷ Revenue from Operations) × 100 = (1,20,000 ÷ 6,00,000) × 100 = 20%.
  • Q13. State any two objectives of ratio analysis. (2 marks) — Answer: (i) To assess liquidity position and short-term solvency of the business. (ii) To evaluate profitability and operational efficiency over time.
  • Q14. Calculate Debt-Equity Ratio: Long-term Debts ₹3,00,000; Shareholders' Funds ₹6,00,000. (2 marks) — Answer: Debt-Equity Ratio = Long-term Debts ÷ Shareholders' Funds = 3,00,000 ÷ 6,00,000 = 0.5:1 or 1:2.

3-Mark Questions: Numerical Problems

Three-mark questions demand calculation of one or two ratios with moderate complexity, often requiring you to derive missing figures first. For instance, you may be given Revenue from Operations and Gross Profit Ratio and asked to find Cost of Revenue from Operations before computing Inventory Turnover. CBSE marking schemes allocate marks as: 0.5 for correct formula, 1.5 for substitution and intermediate steps, 1 for final answer. Below are four carefully selected 3-mark questions mirroring Board paper style. Practice writing neat working, labeling intermediate results (e.g. 'Average Inventory = …'), and boxing final answers. Common pitfalls include using closing inventory instead of average inventory, forgetting to exclude indirect expenses when computing cost of revenue from operations, and mixing up revenue from operations with total revenue. At CBSETUTOR.ai, you can upload your handwritten solution by photo and get instant feedback on method and accuracy — all for ₹999/month covering every class from 6 to 12, with a 3-day free trial to explore.
  • Q15. Calculate Inventory Turnover Ratio and express it in days. Revenue from Operations ₹12,00,000; Gross Profit 25% on cost; Opening Inventory ₹1,50,000; Closing Inventory ₹2,50,000. (3 marks) — Working: Gross Profit = 25% on cost means GP = (25/125) × Revenue from Operations = (25/125) × 12,00,000 = ₹2,40,000. Cost of Revenue from Operations = 12,00,000 − 2,40,000 = ₹9,60,000. Average Inventory = (1,50,000 + 2,50,000) ÷ 2 = ₹2,00,000. Inventory Turnover Ratio = 9,60,000 ÷ 2,00,000 = 4.8 times. Inventory Turnover in days = 365 ÷ 4.8 ≈ 76 days.
  • Q16. From the following, calculate Quick Ratio: Current Assets ₹6,00,000 (including Inventory ₹2,00,000, Prepaid Insurance ₹20,000, Marketable Securities ₹50,000); Current Liabilities ₹3,00,000 (including provision for tax ₹30,000). (3 marks) — Working: Liquid Assets = Current Assets − Inventory − Prepaid Expenses = 6,00,000 − 2,00,000 − 20,000 = ₹3,80,000 (Marketable Securities are liquid). Quick Liabilities = Current Liabilities = 3,00,000 (provision for tax is part of current liabilities). Quick Ratio = 3,80,000 ÷ 3,00,000 ≈ 1.27:1.
  • Q17. Calculate Operating Ratio: Revenue from Operations ₹10,00,000; Cost of Revenue from Operations ₹6,00,000; Operating Expenses ₹2,50,000. (3 marks) — Working: Operating Cost = Cost of Revenue from Operations + Operating Expenses = 6,00,000 + 2,50,000 = ₹8,50,000. Operating Ratio = (Operating Cost ÷ Revenue from Operations) × 100 = (8,50,000 ÷ 10,00,000) × 100 = 85%.
  • Q18. Calculate Return on Investment (ROI) given: Net Profit before Interest and Tax ₹2,00,000; 10% Debentures ₹5,00,000; Equity Share Capital ₹10,00,000; 8% Preference Share Capital ₹3,00,000; Reserves and Surplus ₹2,00,000. (3 marks) — Working: Capital Employed = Equity Share Capital + Preference Share Capital + Reserves and Surplus + Long-term Debts = 10,00,000 + 3,00,000 + 2,00,000 + 5,00,000 = ₹20,00,000. ROI = (Net Profit before Interest and Tax ÷ Capital Employed) × 100 = (2,00,000 ÷ 20,00,000) × 100 = 10%.

5-Mark Questions and Case-Based Problems

Five-mark questions are the centrepiece of Chapter 10 assessments, integrating multiple ratios and real-world scenarios. A typical case presents extracts from a company's Balance Sheet and Statement of Profit and Loss, then asks you to compute four to six ratios and comment on liquidity, profitability, or solvency. CBSE marking schemes award 3.5-4 marks for correct calculations (distributed across sub-parts) and 1-1.5 marks for interpretation or conclusion. Below are two full-length 5-mark questions with detailed solutions. When attempting these, allocate time wisely: read the case carefully, underline given figures, jot down formulae, compute in sequence, and reserve two minutes for a concluding remark. Interpretation can be simple: 'Current Ratio of 2:1 indicates good short-term liquidity' or 'Debt-Equity Ratio of 1.5:1 suggests moderate reliance on borrowed funds; company should aim to reduce it for better solvency.' CBSETUTOR.ai specializes in case-based learning, offering guided walkthroughs of 50+ case studies from past CBSE papers at ₹999/month for all classes, with unlimited photo uploads and instant feedback — try the 3-day free trial before your next pre-Board.

How CBSE Frames Questions from Accounting Ratios

Understanding examiner psychology helps you anticipate question styles and allocate revision time effectively. CBSE follows a predictable pattern for Chapter 10. Liquidity ratios (current and quick) appear almost every year, usually in a case study. Profitability ratios, especially gross profit ratio, operating ratio, and return on investment, are tested through numerical sub-parts. Activity ratios like inventory turnover and trade receivables turnover are woven into comprehensive cases or appear as standalone 3-mark questions. Solvency ratios (debt-equity, proprietary, interest coverage) feature in alternate years, often paired with interpretation. Examiners love to test your ability to distinguish cost of revenue from operations (exclude indirect expenses) versus total expenses, to compute average inventory or average trade receivables (opening plus closing divided by two), and to exclude non-operating incomes when calculating operating profit. The 2024 sample paper introduced a comparative case where students calculated the same four ratios for two companies and recommended which is financially healthier — a trend likely to continue. CBSETUTOR.ai analyzes five years of Board papers and curates question banks by difficulty and frequency, giving you a strategic edge at just ₹999/month for all classes.
  • Liquidity ratios tested in 95% of papers; quick ratio often paired with current ratio to check exclusion of inventory and prepaid expenses
  • Profitability ratios span gross profit ratio (simple), operating ratio (moderate), and ROI (complex with capital employed calculation)
  • Activity ratios require formula precision: inventory turnover uses cost of revenue from operations, not revenue from operations
  • Solvency ratios test understanding of long-term debts, shareholders' funds, and treatment of preference share capital
  • Case-based questions now include a 'comment' or 'suggest measures' sub-part worth 1-1.5 marks, rewarding analytical thinking
  • Common data manipulation: giving gross profit as percentage on cost or on sales; providing opening and closing figures without stating 'average'; mixing operating and non-operating items

Common Mistakes and How to Avoid Them

Even well-prepared students lose 3-4 marks in ratio questions due to recurring errors. First, using closing inventory instead of average inventory in turnover ratios: NCERT clearly states 'Average Inventory = (Opening + Closing) ÷ 2'. Second, including inventory and prepaid expenses in liquid assets for quick ratio: liquid assets exclude both. Third, confusing cost of revenue from operations with total expenses or including non-operating expenses (loss on sale of asset, interest) in operating cost. Fourth, wrong treatment of provisions and contingent liabilities: provisions for doubtful debts and tax are part of current liabilities; contingent liabilities are not. Fifth, in ROI, using net profit after tax and interest instead of net profit before interest and tax. Sixth, in EPS, dividing by total share capital instead of number of equity shares (exclude preference shares). Seventh, not expressing ratios correctly: current ratio as 2:1, not 2; gross profit ratio as 25%, not 0.25. Eighth, rounding off prematurely, leading to compounded errors. Practice is the only antidote. CBSETUTOR.ai flags these mistakes in real time when you upload your solution photo, offering corrective hints without giving away the answer — at ₹999/month for every class from 6 to 12, it is like having a patient tutor on call 24×7.
  • Mistake 1: Using Closing Inventory for turnover ratios instead of Average Inventory — always write (Opening + Closing) ÷ 2
  • Mistake 2: Including Inventory in Liquid Assets for Quick Ratio — liquid assets = current assets − inventory − prepaid expenses
  • Mistake 3: Using Revenue from Operations in numerator of Inventory Turnover instead of Cost of Revenue from Operations
  • Mistake 4: Treating Bank Overdraft as long-term debt — it is a current liability
  • Mistake 5: Forgetting to add back interest when computing Net Profit before Interest and Tax for ROI or Interest Coverage Ratio
  • Mistake 6: Dividing by value of equity share capital instead of number of shares for EPS; remember to divide ₹10,00,000 (share capital) by ₹10 (face value) to get 1,00,000 shares
  • Mistake 7: Expressing Operating Ratio as a pure number (0.85) instead of percentage (85%); CBSE expects % for all profitability and operating ratios
  • Mistake 8: Not showing working; even if final answer is correct, lack of steps costs marks in 3-mark and 5-mark questions

Additional Practice Questions (3-Mark and 5-Mark)

To build mastery, attempt the following four additional questions under timed conditions. Allocate 4 minutes per 3-mark question and 8 minutes per 5-mark question. Cross-check your answers against the model solutions provided. If you find yourself stuck, photograph the question and upload it to CBSETUTOR.ai — the AI tutor will guide you step-by-step through formula selection, substitution, and interpretation. This active learning loop, available at ₹999/month for every CBSE class with a 3-day free trial, accelerates conceptual clarity and exam confidence. Remember, ratio analysis rewards precision and systematic presentation; practice not just the calculation but also the layout of your answer — formula first, substitution next, computation last, and a one-line interpretation where asked.
  • Q20 (3 marks). Calculate Trade Receivables Turnover Ratio and Average Collection Period: Total Revenue from Operations ₹15,00,000 (including cash sales ₹3,00,000); Opening Trade Receivables ₹1,50,000; Closing Trade Receivables ₹2,50,000. — Answer: Credit Revenue from Operations = 15,00,000 − 3,00,000 = ₹12,00,000. Average Trade Receivables = (1,50,000 + 2,50,000) ÷ 2 = ₹2,00,000. Trade Receivables Turnover = 12,00,000 ÷ 2,00,000 = 6 times. Average Collection Period = 365 ÷ 6 ≈ 61 days.
  • Q21 (3 marks). Calculate Proprietary Ratio and Debt to Total Assets Ratio: Shareholders' Funds ₹8,00,000; Long-term Debts ₹4,00,000; Current Liabilities ₹2,00,000; Total Assets ₹14,00,000. — Answer: Proprietary Ratio = Shareholders' Funds ÷ Total Assets = 8,00,000 ÷ 14,00,000 = 0.57:1 or 4:7. Debt to Total Assets Ratio = Long-term Debts ÷ Total Assets = 4,00,000 ÷ 14,00,000 ≈ 0.29:1.
  • Q22 (5 marks). Beta Ltd. reports: Revenue from Operations ₹30,00,000; Cost of Revenue from Operations ₹18,00,000; Operating Expenses ₹6,00,000; Non-operating Income ₹1,00,000; Interest on Debentures ₹50,000; Tax 30%; Equity Share Capital (₹10 each) ₹12,00,000; 10% Preference Share Capital ₹4,00,000; Reserves ₹4,00,000; 12% Debentures ₹5,00,000. Calculate: (a) Gross Profit Ratio, (b) Net Profit Ratio, (c) Return on Investment, (d) Earnings Per Share. Comment on profitability. — Solution: Gross Profit = 30,00,000 − 18,00,000 = ₹12,00,000. (a) Gross Profit Ratio = (12,00,000 ÷ 30,00,000) × 100 = 40%. Operating Profit = 12,00,000 − 6,00,000 = ₹6,00,000. Net Profit before Interest and Tax = 6,00,000 + 1,00,000 = ₹7,00,000. Net Profit before Tax = 7,00,000 − 50,000 = ₹6,50,000. Tax = 30% of 6,50,000 = 1,95,000. Net Profit after Tax = 6,50,000 − 1,95,000 = ₹4,55,000. (b) Net Profit Ratio = (4,55,000 ÷ 30,00,000) × 100 ≈ 15.17%. (c) Capital Employed = 12,00,000 + 4,00,000 + 4,00,000 + 5,00,000 = ₹25,00,000. ROI = (7,00,000 ÷ 25,00,000) × 100 = 28%. (d) Preference Dividend = 10% of 4,00,000 = 40,000. Profit for equity shareholders = 4,55,000 − 40,000 = ₹4,15,000. Number of equity shares = 12,00,000 ÷ 10 = 1,20,000. EPS = 4,15,000 ÷ 1,20,000 ≈ ₹3.46. Comment: Gross Profit Ratio of 40% and ROI of 28% indicate strong profitability; management is effectively utilizing capital.
  • Q23 (5 marks). Gamma Ltd. shows Current Assets ₹10,00,000 (Inventory ₹4,00,000, Trade Receivables ₹3,50,000, Cash ₹2,00,000, Prepaid Expenses ₹50,000); Current Liabilities ₹5,00,000; Revenue from Operations ₹24,00,000 (all credit); Cost of Revenue from Operations ₹16,00,000; Opening Inventory ₹3,00,000; Opening Trade Receivables ₹2,50,000. Calculate: (a) Current Ratio, (b) Quick Ratio, (c) Inventory Turnover Ratio, (d) Trade Receivables Turnover Ratio, (e) Working Capital Turnover Ratio. Comment on liquidity and efficiency. — Solution: (a) Current Ratio = 10,00,000 ÷ 5,00,000 = 2:1. (b) Liquid Assets = 10,00,000 − 4,00,000 − 50,000 = ₹5,50,000. Quick Ratio = 5,50,000 ÷ 5,00,000 = 1.1:1. (c) Average Inventory = (3,00,000 + 4,00,000) ÷ 2 = ₹3,50,000. Inventory Turnover = 16,00,000 ÷ 3,50,000 ≈ 4.57 times. (d) Average Trade Receivables = (2,50,000 + 3,50,000) ÷ 2 = ₹3,00,000. Trade Receivables Turnover = 24,00,000 ÷ 3,00,000 = 8 times. (e) Working Capital = 10,00,000 − 5,00,000 = ₹5,00,000. Working Capital Turnover = 24,00,000 ÷ 5,00,000 = 4.8 times. Comment: Current Ratio 2:1 and Quick Ratio 1.1:1 indicate healthy liquidity. Inventory turns over 4.57 times and receivables 8 times, showing efficient asset utilization.

Revision Tips and Exam Strategy for Accounting Ratios

With limited time before Boards, focus on high-yield areas. First, memorize all formulae on a single sheet and revise daily — liquidity (2 ratios), solvency (4 ratios), activity (4 ratios), profitability (6 ratios) total sixteen core formulae. Second, practice at least ten 5-mark cases to build speed; aim to complete a five-ratio case in seven minutes. Third, create a checklist for common exclusions: inventory out of liquid assets, indirect expenses out of operating cost, provisions in current liabilities, contingent liabilities out of balance sheet totals. Fourth, underline keywords in questions — 'average', 'credit sales', 'equity shareholders', 'before interest and tax' — these dictate which figure to use. Fifth, in the exam, attempt MCQs confidently but double-check calculation-based MCQs; one arithmetic slip changes the option. Sixth, for 3-mark and 5-mark questions, always write the formula first even if you know it by heart; examiners award step-marks. Seventh, if interpretation is asked, write two lines citing the ratio value and its implication: 'Quick Ratio 1.2:1 means for every rupee of current liability, firm has ₹1.20 liquid assets, indicating satisfactory liquidity.' Eighth, manage time: reserve 25 minutes for the Chapter 10 case and two shorter questions. CBSETUTOR.ai offers a dedicated 'Exam Mode' where you solve past papers under timed conditions and receive instant marks and feedback, sharpening both accuracy and speed — all at ₹999/month for every class, with a 3-day free trial.
  • Prepare a one-page formula sheet with all sixteen ratios, their formulae, and one example each; revise it every morning
  • Solve ten 5-mark case studies from past five years' Board papers; note recurring patterns and data presentation styles
  • Practice writing clean, step-by-step solutions; examiners appreciate labeled working (e.g. 'Step 1: Calculate Average Inventory')
  • In MCQs, eliminate obviously wrong options first, then compute if needed; manage time to avoid spending 3 minutes on a 1-mark question
  • For interpretation sub-parts, link the numerical result to financial health: e.g. 'Current Ratio 2:1 implies good short-term solvency'
  • Attempt the Chapter 10 case first if you are confident; secure 5 marks early to build momentum
  • Double-check units: ratios expressed as x:1, percentages as %, turnover in 'times', collection period in 'days'
  • If stuck, move on and return later; never leave a 5-mark question unattempted — partial attempt fetches 2-3 marks

How CBSETUTOR.ai Accelerates Mastery of Accounting Ratios

Ratio analysis combines formula recall, arithmetic accuracy, and interpretation — a blend that improves fastest through guided practice and instant feedback. CBSETUTOR.ai offers a comprehensive Accounting Ratios module within its CBSE Class 12 Accountancy course. Upload a photo of any ratio problem — whether from your textbook, school worksheet, or past Board paper — and the AI tutor identifies the ratios involved, displays the relevant formulae, walks you through substitution step-by-step, highlights common pitfalls specific to that problem, and provides a model answer with interpretation. The platform tracks your error patterns (e.g. repeated mistakes in average inventory calculation or confusion between operating and non-operating items) and suggests targeted drills. You also get access to 50+ video solutions of Board paper cases, 200+ MCQs with instant explanations, and a formula flashcard deck for quick revision. All of this is available at a flat ₹999 per month for every class from 6 to 12 — no hidden charges, no per-subject fees. A 3-day free trial lets you explore the full feature set, solve five problems, and decide if it fits your learning style. Thousands of Class 12 students have improved their Accountancy scores by 10-15% in just four weeks using CBSETUTOR.ai's personalized, on-demand support. Visit the website, sign up, and give your Board preparation the AI advantage.
  • Photo-upload solving: snap your ratio question, get step-by-step solution in under 60 seconds
  • Error pattern analysis: AI flags recurring mistakes (e.g. wrong average calculation) and offers corrective mini-lessons
  • 50+ Board paper case studies solved with video walkthroughs and downloadable PDFs
  • 200+ MCQ bank with instant right/wrong feedback and conceptual hints
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Frequently asked questions

How many marks does Chapter 10 Accounting Ratios carry in CBSE Class 12 Board exam?+
Chapter 10 typically carries 8-10 marks in CBSE Class 12 Accountancy Board papers. The distribution is usually 2-3 one-mark MCQs, one 3-mark numerical question, and one 5-mark case-based question integrating multiple ratios with interpretation.
Which ratios are most frequently asked in CBSE Board exams?+
Current Ratio, Quick Ratio, Gross Profit Ratio, Operating Ratio, Return on Investment, Inventory Turnover Ratio, and Earnings Per Share appear in over 80% of papers. Debt-Equity Ratio and Trade Receivables Turnover also feature regularly in case studies.
What is the difference between Current Ratio and Quick Ratio?+
Current Ratio = Current Assets ÷ Current Liabilities. Quick Ratio (Acid-test Ratio) = Liquid Assets ÷ Current Liabilities, where Liquid Assets = Current Assets − Inventory − Prepaid Expenses. Quick Ratio excludes less liquid items to measure immediate solvency.
Should I use Opening, Closing, or Average Inventory for Inventory Turnover Ratio?+
Always use Average Inventory. NCERT formula is Inventory Turnover Ratio = Cost of Revenue from Operations ÷ Average Inventory, where Average Inventory = (Opening Inventory + Closing Inventory) ÷ 2. Using closing inventory alone costs marks.
How do I calculate Return on Investment (ROI)?+
ROI = (Net Profit before Interest and Tax ÷ Capital Employed) × 100. Capital Employed = Shareholders' Funds (Equity + Preference + Reserves) + Long-term Debts. Remember to use profit before interest and tax, not profit after tax.
What is Operating Ratio and how is it different from Operating Profit Ratio?+
Operating Ratio = (Cost of Revenue from Operations + Operating Expenses) ÷ Revenue from Operations × 100. Operating Profit Ratio = Operating Profit ÷ Revenue from Operations × 100, where Operating Profit = Gross Profit − Operating Expenses. Operating Profit Ratio = 100 − Operating Ratio.
Do provisions for doubtful debts come under Current Liabilities for Quick Ratio?+
Yes. Provision for doubtful debts and provision for tax are part of Current Liabilities. However, contingent liabilities (e.g. pending lawsuits) are not included in the Balance Sheet and hence not in Current Liabilities for ratio calculations.
How is Earnings Per Share (EPS) calculated and what does it exclude?+
EPS = (Net Profit after Tax − Preference Dividend) ÷ Number of Equity Shares. It measures profit available to equity shareholders per share. Exclude preference share capital and preference dividend; divide by number of shares, not rupee value of share capital.
Can I score full marks if my final answer is correct but I do not show working?+
No. CBSE marking schemes award step-marks: typically 0.5-1 mark for correct formula, 1-1.5 marks for substitution and intermediate steps, and 1 mark for final answer. Without working, you may lose 40-60% of the marks even if the answer is right.
How can CBSETUTOR.ai help me prepare for Accounting Ratios questions?+
CBSETUTOR.ai offers 24×7 AI tutoring at ₹999/month for all classes. Upload any ratio problem by photo and receive instant step-by-step solutions, formula explanations, and error alerts. Access 200+ MCQs, 50+ case-study videos, timed mock tests, and personalized revision plans, all with a 3-day free trial.

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