1. Soft Toys Limited is a toy manufacturing company.

It manufactures purple teddy bears, which is the latest craze among kids and teenagers. The company is now at full production of the teddy bears. The final accounts for the year 2008 and 2009 have been given for your consideration: Profit and Loss Account for the year ending 31st December 2009 2008 ’000 ’000 Sales 30,000 20,000 Operationg profit 10,000 9,000 Interest 450 400 Profit before tax 9,550 8,600 Tax 2,000 1,200 Profit after tax 7,550 7,400 Dividends 2,500 2,500 Retained Profit 5,050 4,900 Balance Sheet as on 31st December 2009 2008 ’000 ’000 ’000 ’000 ’000 ’000 Fixed Assets 1,500 1,400 Current Assets Stock 7,350 3,000 Debtors 10,000 6,000 Cash 2,500 4,500 19,850 13,500 Current Liabilities Overdraft 2,000 Dividends Payable 2,500 2,500 Trade Creditors 4,200 2,500 (8,700) (5,000) Net Current Assets 11,150 8,500 8% Debentures (1,200) (3,500) Net Assets 11,450 6,400 Equity Shares (25p) Profit and Loss a/c 5,000 6,450 11,450 5,000 1,400 6,400

You are required to identify the main problems faced by Soft Toys Limited using ratio Analysis. [15 marks] 2. Your are required to complete the balance sheet of azar ltd as on 31 march 2012. [7m] Liabilities Share capital Reserves & surplus Loans C.liabilities Total Rs 10 ? 1 ? ? Assets Fixed assets Stock Debtors Cash Total Rs. 15 ? ? ? ?

Reserves and surplus to share capital ratio 1:1 Sales net worth ratio 1.5:1 Sales to debtors ratio 6 :1

Debtors turn over ratio = 3 months Stoch velocity = 8 times Gross profit = 25% Gross profit for the year is Rs. There are no long term loans or overdraft .000. debtors. Reserves & surplus = Rs.Gross profit ratio 20% on sales Net working capital 6 lakh Stoack turnover ratio 6 ti. Closing stock is 4000 more than the opening stock.000.60. .00. 4.000 and bills payable rs. 10. 56000 liquid assets = 2.5 :1 3. Find out – sales.5 :1 Acid test ratio 1. Bills receivable is rs.closing stock and cash balance.es Current ratio 2. 1.000.

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