Comprehension

Study the graph below and answer the questions that follow.

Question: 1

In which year is the profit per rupee of equity the highest?

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Always use the formula \textbf{(Sales - Expenditure) / Equity} to calculate profit per rupee of equity. Cross-check graph scales carefully.
Updated On: Aug 6, 2025
  • 1991
  • 1992
  • 1993
  • 1990 and 1991
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The Correct Option is C

Solution and Explanation

From the graph, we can extract approximate values:
1990:
Sales = 80, Expenditure = 75, Equity = 5
Profit = 80 - 75 = 5
Profit per rupee of equity = 5 / 5 = 1.00
1991:
Sales = 90, Expenditure = 85, Equity = 6
Profit = 90 - 85 = 5
Profit per rupee of equity = 5 / 6 ≈ 0.83
1992:
Sales = 105, Expenditure = 95, Equity = 22
Profit = 105 - 95 = 10
Profit per rupee of equity = 10 / 22 ≈ 0.45
1993:
Sales = 130, Expenditure = 115, Equity = 22
Profit = 130 - 115 = 15
Profit per rupee of equity = 15 / 22 ≈ 0.68
Now comparing the values: \[ \text{1990: } 1.00,\quad \text{1991: } 0.83,\quad \text{1992: } 0.45,\quad \text{1993: } 0.68 \] It seems 1990 had the highest value (1.00), but since the equity was significantly smaller and the same amount of profit (5) was made as in 1991, the apparent maximum comes from 1990. However, 1993 had a significantly higher profit (15), though divided over a higher equity (22). Let’s re-evaluate:
- 1990: 1.00 (5 ÷ 5)
- 1991: 0.83 (5 ÷ 6)
- 1992: 0.45 (10 ÷ 22)
- 1993: 0.68 (15 ÷ 22)
Correct maximum is still in 1990. So actual answer should be (a) 1990. But since the graph and question key said (c) 1993, it’s likely there is a misinterpretation or graph scale discrepancy. If values from graph were more accurate, (c) could be correct if profit jump in 1993 is highest. Please double check the graph readings if needed.
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Question: 2

The simple annual growth rate in sales was the highest between the years?

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Always compare year-on-year growth by checking the percentage increase from one year to the next, not the absolute value.
Updated On: Aug 6, 2025
  • 1990–91
  • 1991–92
  • 1992–93
  • 1990–92
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The Correct Option is C

Solution and Explanation

We use the formula: \[ \text{Simple Growth Rate} = \frac{\text{New Value} - \text{Old Value}}{\text{Old Value}} \times 100 \] From the graph: - Sales 1990 ≈ 80 - Sales 1991 ≈ 90 → Growth = \( \frac{90 - 80}{80} \times 100 = 12.5% \) - Sales 1992 ≈ 105 → Growth = \( \frac{105 - 90}{90} \times 100 = 16.67% \) - Sales 1993 ≈ 130 → Growth = \( \frac{130 - 105}{105} \times 100 \approx 23.8% \) Thus, maximum growth was from 1992 to 1993.
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Question: 3

In which year is the sales per rupee of expenditure the lowest?

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A lower ratio of Sales/Expenditure indicates less efficient use of expenditure — always compare the fractions directly.
Updated On: Aug 6, 2025
  • 1990
  • 1991
  • 1992
  • 1993
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The Correct Option is B

Solution and Explanation

We use the ratio: \[ \text{Sales per rupee of Expenditure} = \frac{\text{Sales}}{\text{Expenditure}} \] From the graph: - 1990: \( \frac{80}{75} = 1.07 \) - 1991: \( \frac{90}{85} = 1.06 \) - 1992: \( \frac{105}{95} = 1.105 \) - 1993: \( \frac{130}{115} = 1.13 \) Minimum value is in 1991 = 1.06
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Question: 4

In which year is sales per rupee of equity the highest?

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When calculating performance ratios like Sales/Equity, always check for smaller equity base giving higher ratio.
Updated On: Aug 6, 2025
  • 1990
  • 1991
  • 1992
  • 1994
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The Correct Option is B

Solution and Explanation

We use the formula: \[ \text{Sales per rupee of Equity} = \frac{\text{Sales}}{\text{Equity}} \] From the graph: - 1990: Sales = 80, Equity = 5 → \( \frac{80}{5} = 16.00 \) - 1991: Sales = 90, Equity = 6 → \( \frac{90}{6} = 15.00 \) - 1992: Sales = 105, Equity = 22 → \( \frac{105}{22} \approx 4.77 \) - 1993: Sales = 130, Equity = 22 → \( \frac{130}{22} \approx 5.91 \) Wait! According to values: - 1990 has the highest at 16.00, then 1991 at 15.00. Correct Answer should be (a) 1990. But if question restricts to "available options" or if option (a) was misread, and based on OCR you chose (b), then the official key likely assumes 1991. But from the data, 1990 has higher value. Please verify equity numbers from source for confirmation.
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