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Q Re-arrange the following Balance Sheet of M/s Alpha Ltd.

As on 31st March 2005


. in a form suitable for analysis
Liabilities Rs. Assets Rs.
Equity Share 398000 Goodwill 6600
Preference Share Capital 300000 Machinery 220740
Securities Premium 40000 Land 176000
General Reserve 20000 Building 490000
Reserve for Doubtful 2000 Furniture 179260
Debts
Profit & Loss Account 60000 Investment in Shares of Y 18000
Ltd
Depreciation Provision 240000 Stock 48000
Debentures 80000 Debtors 26150
Bank Loan 30000 Loose Tools 28500
Fixed Deposits 40000 Cash 6500
Sundry Creditors 36700 Bank 16000
Bills Payable 62450 Staff Advances 48000
Provision for Taxation 64000 Advance Tax 99000
Provision for Dividend 58000 Preliminary Expenses 3000
Expenses on Issue of 6000
Shares
1431150 1431150
Note:
Details of Depreciation provision:
Machinery Rs. 80000
Building Rs. 100000
Furniture Rs. 60000
Also determine the following:
a) Total funds employed
b) Fictitious assets
c) Intangible assets
d) Current assets
e) Quick assets
f) Current Liabilities
g) Working Capital
h) Loan funds
i) Proprietors’ funds
j) Net assets
k) Fixed liabilities
Q Balance Sheet as on _________
.
31.12.2004 31.12.2005
Rs. Rs.
Current Assets:
Cash at Bank 123000 153000
Debtors 211200 197700
Bills Receivable 120000 91500
Prepaid Expenses 9000 12000
Fixed Assets:
Building 480000 465000
Plant 405000 375000
Furniture 151500 55800
1500000 1350000
Current Liabilities:
Creditor 270000 15000
Bills Payable 120000 241500
Outstanding Expenses 45000 49500
Reserve & Surplus 165000 144000
Share Capital 900000 900000
1500000 1350000
Prepare the comparative Balance Sheet from the above and comment on the
financial position of the company.

Q Prepare a Comparative Financial Statement from the following details and offer
. comments.
Balance Sheet as on 31st March 2005
(Rs. In thousands)
Liabilities X Ltd Y.Ltd. Assets X Ltd Y.Ltd.
Rs. Rs. Rs. Rs.
10 % Pref. Share 36 54 Land 80 40
Capital
Equity Share 80 100 Machinery 220 300
Capital
Securities Premium 40 50 Investments 10 5
General Reserve 40 10 Sundry Debtors 28 36
Profit & Loss A/c 21 Stock 42 45
Depreciation 180 170 Bills Receivable 7 4
Reserve
12 % Debentures 10 15 Prepaid Expenses 2 3
Long Term Loans 5 10 Bank 10
Bank Overdraft 15 Cash 3 2
Sundry Creditors 10 24 Preliminary 8 15
Expenses
Outstanding 5 10 Goodwill 20 10
Expenses
Unclaimed 3 2
Dividends
430 460 430 460

Q Prepare a Comparative Revenue Statement from the following details and offer
. comments.
KND Ltd.
Profit & Loss Account for the years ended 31st March
(Rs. In thousands)
Particulars 2005 2006 Particulars 2005 2006
Rs. Rs. Rs. Rs.
To Opening Stock 75 100 By Sales 1500 2000
To Purchases 750 1070 By Closing Stock 100 120
To Interest on 50 50 By Discount 3
Debentures 4
To Depreciation By Goods Destroyed 10
Furniture 5 5 by fire
Machinery 12 10 By Profit on Sale of 8
To Administrative 98 147 Machinery
Exp.
To Selling 150 250
Expenses
To Discount 2 1
To Carriage 25 105
To Loss by Fire 5
To Wages 65 100
To Provision for 190 145
Tax
To Net Profit 190 145
Total 1612 2133 Total 1612 2133

Q Prepare a Common size Comparative Financial Position Statement from the


. following Balance Sheets
Balance Sheets as on 31st March 2006
Liabilities A Ltd Rs. B Ltd Assets A Ltd B Ltd
Rs. Rs. Rs.
Equity Share 250 105 Fixed Assets 120 90
Capital
Reserve Surplus 180 10 Investments 80 20
10 % Debentures 50 100 Prepaid Expenses 10 12
Bank Overdraft 45 Stock 240 268
Creditors 90 200 Debtors 160 80
Provision for Tax 70 25 Cash 30 10
Preliminary 5
Expenses
640 485 640 485

Q From the following Balance Sheet as on 31st March 2005 and the Trading, Profit
. & Loss Account for the year ending 31st March 2005, prepare:
a) Common Size Balance Sheet
b) Common Size Income Statement
Balance Sheet
Liabilities Rs. Assets Rs.
Equity Share Capital 200000 Goodwill 10000
0 00
General Reserve 400000 Building 20000
00
Profit & Loss Account 600000 Machinery 80000
0
Preference Share Capital 600000 Furniture 20000
0
Secured Loan 400000 Stock 80000
0
Income Tax Provision 200000 Debtors 60000
0
Bank Overdraft 600000 Bank Balance 40000
0
Creditors 120000 Bills Receivable 20000
0 0
600000 60000
0 00
Trading Profit & Loss Account
Rs. Rs.
To Opening Stock 800000 By Sales
4200000
To Purchases 220000 Less: Returns 40000
0 200000 00
To Wages 500000 By Closing Stock 10000
00
To Factory Expenses 500000
To Gross Profit c/d 100000
0
500000 50000
0 00
To Administrative Exp. 150000 By Gross Profit b/d 10000
00
To Selling Expenses 100000 By Commission 75000
To Finance Expenses 50000
To Depreciation 125000
To Income Tax Profit 200000
To Net Profit 450000
107500 10750
0 00

Q Calculate the Trend Percentage from the following information extracted from
. the financial statement of X Company. Offer your comments.
2005 2004 Rs. 2003 Rs.
Rs.
Sales 16400 13640 9880
Cost of Sales 14970 12490 8810
Expenses 80 130 50
Interest Expenses 500 370 200
Tax 390 190 450
Fixed Assets (Net) 5480 5110 4770
Working Capital 5080 4880 3290
Investments 770 180 420
Net Worth 6660 6010 5850
External Loans 4680 4160 2640

Q Analyze and comment on the trend


.
Balance Sheet of Efficient Ltd. as on 31st March
(Rs. in thousand)
2003 2004 Rs. 2005
Rs. Rs.
Assets:
Fixed Assets (at cost less Depreciation) 15.00 12.50 12.00
Investment 1.00 0.50 1.00
Stock in Trade 6.00 5.00 4.00
Accounts Receivable 9.00 7.50 6.00
Loans and Advances 4.00 4.00 3.00
Cash and Bank Balances 0.50 0.50 0.50
35.50 30.00 26.50
Liabilities:
Share Capital 20.50 17.00 14.50
Bank Loans 4.00 3.00 3.00
Sundry Creditors 11.00 10.00 9.00
35.50 30.00 26.50

Q Following is the Profit and Loss Account of Saurav Balanced Limited for the year
. ended 31st March 2005. you are required to prepare Vertical Income Statement
for the purpose of analysis.
Rs. Rs.
To Opening Stock 700 By Sales
To Purchases 900 Cash 520
To Wages 150 Credit 1500
To Factory Expenses 350 2020
To Office Salaries 25 Less: Return and 20 2000
To Office Rent 39 Allowance
To Postage and Telegram 5 By Closing Stock 600
To Directors Fee 6 By Dividend on Investment 10
To Salesman Salaries 12 By Profit on Sale of Furniture 20
To Advertising 18
To Delivery Expenses 20
To Debenture Interest 20
To Depreciation
On Office Furniture 10
On Plant 30
On Delivery Van 20
To Loss on Sale of Van 5
To Income Tax 175
To Net Profit 145
2630 2630
Q Common India Ltd.
.
Balance Sheet as on 31st December 2005
Liabilities Rs. Assets Rs.
Capital Reserve 126000 Copyright 10000
0
General Reserve 120000 Cash 21000
Provision for Tax 50000 Calls in Arrears 9575
Commission received in 10875 Plant and Machinery 42000
Advance 0
15% debentures 160000 Debtors 30042
5
12% Bank Loan 40000 Prepaid Insurance 15375
6% Preference Share Capital 200000 Land and Building 50000
0
Equity Share Capital 100000 Fixtures 25000
0
Bills Payable 49125 Furniture 75000
Profit and Loss Account 9000 Preliminary Expenses 18625
Bank Overdraft 10740 Goodwill 10000
0
Share Premium 15000 Investments (Long Term) 17500
0
Sundry Creditors 189260 Stock 20070
0
Market Investments 19300
198000 19800
0 00
You are required to rearrange above Balance Sheet in vertical form and
compute the following ratios:
(a) Current Ratio, (b) Proprietary Ratio, (c) Capital Gearing Ratio.
Q Shinkanshan Limited commenced business on 1st January 1990. The Balance
. Sheet as on 31st December 2004 and as on 31st December 2005, the Profit nd
Loss Account for the year ended 31st December 2004 and for the year ended
31st December 2005 are given below:-
Liabilities 31.12.20 31.12.2 Assets 31.12.20 31.12.20
04 005 Rs 04 05
Rs. Rs. Rs

Equity Share of 200000 200000 Fixed Assets


Rs. 10 each Less: Derecia. 396000 416000
General Reserve 40000 20000 Stock in Trade 120000 60000
Profit & Loss A/c 4000 28000 Debtors 160000 80000
Mortgage Loan 160000 220000 Cash & Bank 4000 60000
Bank Overdraft 40000
Creditors 180000 60000
Provision for 26000 68000
Taxation
Proposed 30000 20000
Dividend
680000 616000 680000 616000
Profit and Loss Account for the year ended -------
31.12.20 31.12.2 31.12.20 31.12.20
04 005 Rs 04 05
Rs. Rs. Rs

Directors 60000 20000 Balance b/f 28000 4000


Remuneration Net Profit after 121600 160800
Interest on Loan 9600 8800 Depreciation
On Mortgage
Provision for
Taxation 26000 68000
Proposed 30000 20000
dividend
Transfer to 20000 20000
Reserve
Balance c/d 4000 28000
149600 164800 149600 164800
Sales for the year 2004 amounted to Rs. 1000000 and for 2005 amounted to Rs.
1200000
Calculate
a) Net Profit Ratio b) Current Ratio
c) Liquidity Ratio d) Debt/Equity Ratio and
e) Debt Service ratio f) Net Operating Profit Ratio
Give your comments on profitability and solvency of the company.
Do you think that there is an improvement in performance of the Company in
2005?

Q The following data are extracted from the published accounts of two companies
. in an industry.
ABC Ltd. XYZ Ltd.
Rs. Rs.
Sales 3200000 3000000
Net Profit after Tax 123000 158000
Equity Capital (Rs. 10 per shre fully paid) 1000000 800000
General Reserves 232000 642000
Long Term Debt 800000 660000
Creditors 382000 549000
Bank Credit (Short Term) 60000 200000
Fixed Assets 1599000 1590000
Investments 331000 809000
Other Current Assets 544000 452000
You are required to prepare a statement of comparative ratios showing liquidity,
profitability, activity and financial position of the two companies. As a Finance
Analyst give a report to the management about financial evaluation of both the
companies.

Q You have the following information on the performance of Prosper Co., as also
. the industry averages:
a) Determine the indicated ratios for Prosper Co.
b) Indicate the Company’s strengths and weakness as shown by your analysis
Balance Sheet as on 31st December 2005
Rs. Rs.
Equity Share Capital 24000 Net Fixed Assets 12100
00 00
10 % Debentures 46000 Cash 44500
0 0
Sundry Creditors 33000 Sundry Debtors 55000
0 0
Bills Payable 44000 Stocks 16500
0 00
Other Current Liabilities 22000
0
38500 38500
00 00
Statement of Profit for the year ending 31 December 2005
st

Rs. Rs.
Sales 55000
00
Less: Cost of goods Sold
Materials 209000
0
Wages 132000
0
Factory Overheads 649000 40590
00
Gross Profit 14410
00
Less: Selling and Distribution Cost 550000
Administration and General Expenses 614000 11640
00
Earnings before Interest and Tax 27700
0
Less: Interest Charges 46000
Earnings before Tax 23100
0
Less: Tax 950 %) 11550
0
Net Profit 11550
0
Ratios to be computed:
1) Current Ratio 2) Liquid Ratio 3) Earning per 4) Net Profit Ratio
Share
5) Operating 6) Proprietary 7) Stock Turnover 8) Debt Collection
Ratio Ratio Ratio Period
9) Capital 10) Return on Capital Employed
Gearing Ratio

Q The following is the Balance Sheet of J Ltd on 31st March 2005


.
Liabilities Rs. Assets Rs.
Share Capital 20000 Fixed Assets 18000
00 00
Reserves 40000 Debtors 50000
0 0
Creditors 30000 Stock 40000
0 0
Bank Overdraft 10000 Bank Balance 10000
0 0
28000 28000
00 00
Total Sales were Rs. 9000000 and Cash Sales were 10% of the total sales. Cost
of goods sold was Rs. 7000000. Net profit before payment of tax at 50 % was
Rs. 900000. opening Stock figure was 75 % of the stock figure on 31st March
2005. Debtors on 31st March 2005 include advances of Rs. 50000 to suppliers.
Advances were given in March 2005.
Debtors on 1st April 2004 were 50 % of Debtors on 31st March 2005
There were no non-operating expenses and non-operating incomes
Calculate the following ratios:
a) Current Ratio b) Liquid Ratio
c) Operating Ratio d) Net Profit Ratio
e) Stock Turnover Ratio f) Debtors Turnover Ratio and
Collection Period
g) Stock/Working Capital Ratio

Q From the information given below prepare a Balance Sheet in a vertical form
. suitable for analysis and calculate the following ratio:
1) Capital Gearing Ratio 2) Proprietary Ratio
3) Current Ratio 4) Liquid Ratio
5) Debtor Equity Ratio
Rs.
Bank 50000
Land and Building 800000
Advance Payments 62000
Stock 273000
Creditors 406000
Debtors 523000
Bills Receivable 21000
Plant and Machinery 544000
12% Debentures 250000
Loan from a Director 400000
Equity Share Capital 100000
0
Profit and Loss Account 217000
Q From the following Balance Sheet of B Ltd. As on 31st December 2005 and the
. Trading Profit & Loss Account for the year ending 31st December 2005, calculate
the following ratios.
a) Current Ratio b) Liquid Ratio c) Inventory Turnover Ratio
d) Debtors Turnover e) Operating Ratio f) Capital Gearing Ratio
Ratio
g) Net Profit Ratio h) Stock Working Capital i) Earning Per Equity Share
Ratio
j) Interest Coverage k) Creditors Turnover l) Dividend Payment Ratio
Ratio
Balance Sheet
Liabilities Rs. Assets Rs.
10 % Preference Capital 20000 Fixed Assets 26000
0 00
Equity Capital (Rs. 10) 10000 Bank Balance 10000
00 0
General Reserve 80000 Short Term Investment 30000
0 0
12 % Debentures 14000 Debtors 40000
00 0
Creditors 12000 Last year Rs. 200000
0
Outstanding Expenses 22000 Stock 60000
0 0
Income Tax Provision 26000
0
40000 40000
00 00
Trading Profit & Loss Account
Rs. Rs.
To Opening Stock 600000 By Sales
60000
00
To Purchases 516000 By Closing Stock 60000
0 0
To Gross Profit 840000
660000 66000
0 00
To Administrative Expenses 80000 By Gross Profit 84000
0
To Rent 56000 By Profit on Sale of Fixed 11000
Asset 0
To Interest 90000
To Selling Expenses 44000
To Depreciation 200000
To Income Tax Provision 240000
To Net Profit 240000
950000
95000
0
The Company declared dividend on equity share @ 20 %

Q The following items appear in the accounts as at 31st December 2005 of


. Overseas Ltd.
Cash Rs.
Land and Building (at cost) 48600
Deposits and Payments in advance 80000
0
Stock 62000
Trade Creditors 27280
0
General Reserve 40575
0
Debtors 10000
0
Bills Receivable 52300
0
Plant & Machinery at cost less Depreciation 22600
Debentures-Repayable 2005 (Secured) 54400
0
Bank Overdraft 25000
0
Ordinary Share Capital of Rs. 10 each 52000
Profit and Loss Account Balance 10000
00
Proposed Dividend for 2005 Net 21700
0
Trade Investments 86250
Advance payment of Tax 20000
Provision for Taxation 10000
0
Bills Payable 26400
0
Net Sales for the year 2005 18000
21824
00
You are required to arrange the above items in the form of Financial Statements
to indicate
a) Working Capital b) Total Funds Employed c) Shareholders’ Equity
and calculate the following ratios:
a) Current Ratio b) Turnover of Debentures

Q The Balance Sheet and the Income Statement of Fiat Ltd. Are given hereunder:-
.
Balance Sheet as on 31st March 2005
Liabilities Rs. Assets Rs.
Equity Capital (Rs.10 each) 120 Fixed Assets 100
Returned Earnings 36 Prepaid Expenses 1
6% Debentures 50 Inventory 10
Creditors 10 Debtors 70
Wages Payable 4 Cash 10
Taxes 1
221 221
Profit & Loss Account for the year ended 31 March 2005
st

To Opening Stocks Rs. Rs.


To Purchases 30 By Sales 400
To Operating Expenses 300 By Closing Stocks 40
To Income Tax 80
To Net Profit 12
18
440 440
From the above statement compute
a) Current Ratio b) Acid Rest Ratio c) Stock Turnover Ratio
d) No. of days sales invested in Debtors e)No. of days purchases in
Creditors
f) Return on Capital g) Return on Proprietor’s h) Earning per Share
employed equity
i) Gross Profit Ratio
Mr. Prudent is interested in purchasing share of Flat Ltd. He seeks your advise
regarding the purchase of share of the company.
If you are a supplier would you grant credit to this company?

Q The following are the Balances as on 31st March 2005 of Ambika Ltd.
.
Rs.
Share Capital (20000 Equity Shares of Rs. 10 each of Rs. 5 called up) 100000
Land and Building 125000
Machinery 50000
Stock 50000
Reserves and Surplus:
General Reserve 50000
Profit and Loss Account 15000
5% Debentures 100000
Bills Payable 7000
Bills Receivable 5000
Furniture 25000
Debtors (less than 6 months) 11000
Preliminary Expenses 5000
Creditors 18000
Cash on Hand 2000
Bank Balance (Dr.) 18000
Provision for Doubtful Debts 1000
Calculate the following Ratios:
a) Debt Equity Ratio b) Proprietary Ratio c) Current Ratio
d) Liquid Ratio e) Stock to Working
Capital Ratio
Answer the following questions:
1) How is the short term solvency position of the company?
2) Is the company financially stable?
3) How is the liquidity position of the company?
4) give your opinions about working capital position of the company.

Q The Capital of B & Co. is as follows:


.
Rs.
10 % Preference Share Capital (Rs. 10) 12000
00
Equity Shares of Rs. 10 each 32000
00
44000
00
Profit after tax at 50% 10800
00
Depreciation 12000
0
Equity dividend paid 20 %
Market price per Equity share Rs. 90
Calculate:
a) Earning per Share b) Dividend Payout Ratio
Q From the following data, prepare a statement of proprietor’s funds with as much
. details possible:
Current Ratio 25
Liquid Ratio 15
Proprietary Ratio (Fixed Assets/Proprietary fund) 0.75
Working Capital Rs.
60000
Reserves and Surplus Rs.
40000
Bank Overdraft Rs.
10000
There are no Long Term Loans for fictitious assets