CHANGES

 IN  THE  PARTNERSHIP  

A  change  in  partnership  is  when  the  agreement  has  to  be  changed  between  the  partners  due  to  
 
-­‐ Admission  of  a  new  partner  
-­‐ Retirement  of  an  existing  partner  
-­‐ Or  simply  change  in  profit  sharing  ratio.  
 
Whenever  there  is  a  change  in  a  partnership,  partners  are  allowed  to  revalue  their  assets.    This  is  done  
to  make  the  situation  fair  for  all  parties.  Since  the  values  on  the  statement  of  financial  position  might  be  
different  from  the  market  so  any  gain  or  loss  is  first  adjusted  between  the  old  partners  For  this  purpose,  
they  make  a  revaluation  account.    
 
In  revaluation  account  we  simply  record  the  gains  or  losses  on  each  asset  due  to  revaluation.    This  
account  is  then  closed  by  transferring  the  balance  to  partners’  capital  account  in  the  old  profit  sharing  
ratio.  
 
 
Goodwill    
This  is  an  added  advantage  which  an  old  business  has  over  a  similar  new  business,  due  to  its  location,  
brand  value,  costumer  base  etc.  
 
Whenever  there  is  a  change  in  partnership  ,we  need  to  adjust  for  goodwill,  so  that  the  old  partners  
benefit  and  get  the  credit  of  the  efforts  they  have  done  to  make  good  reputation  of  the  business.  The  
adjustment  is  done  in  the  capital  accounts  ,  where  we  first  create  the  goodwill  in  the  old  profit  sharing  
ratio  (  thus  giving  credit  to  the  old  partners),  and  then  we  right  it  off  (  always  )  in  the  new  ratio  (  so  that  
the  partner  who  is  gaining  stake  in  the  business  actually  pays  for  it  ).  
 
ADVANTAGES  OF  PARTNERSHIP  OVER  SOLE  TRADER  
 
1. Additional  capital  from  other  partners,  and  also  easier  to  get  loans.  
2. Additional  expertise.  
3. Additional  management  time.  
4. Risk  (losses)  is  shared.  
 
 
DISADVANTAGES  OF  PARTNERSHIOP  OVER  A  SOLE  TRADER  
 
1. Profit  are  shared  
2. Possibility  of  disputes  
3. Loss  of  control  
  
 
What  is  a  current  account?  
 
Majority  of  partnership  keep  a  fixed  capital  account,  whenever  they  have  fixed  capital  accounts,  they  
will  have  to  maintain  a  current  account  for  each  partner.  By  fixed  capital  account,  we  mean  that  all  the  
appropriation  and  drawings  will  pass  through  a  temporary  capital  account  (current  account),  only  
additional  investment  by  a  partner  will  be  recorded  in  the  capital  account.  This  gives  information  
relating  to  long  term  and  short  term  aspects  separately.  This  also  helps  to  determine  the  investment  
made  by  partner  in  the  business.  
Some  partnerships  also  maintain  a  fluctuating  capital  account;  in  this  case  they  will  not  maintain  a  
current  account.  All  the  transactions  will  pass  through  the  capital  account.  
 
What  is  total  share  of  profit?  
 
This  is  different  than  just  the  remaining  share  of  profit  which  we  get  at  the  end  of  appropriation  
account.  Total  share  of  profit  means  out  of  this  year’s  net  profit,  how  much  profit  goes  to  a  particular  
partner.  As  we  know  interest  on  capital  and  salary  etc  are  deducted  from  net  profit  only  so  they  also  
constitute  as  part  of  profit.  Hence,  total  share  of  profit  is:  
 
  Interest  on  capital  +  Salary  +  Remaining  share  of  Profit  –  Interest  on  drawings  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIMITED  COMPANIES  
 
Limited  companies  are  business  organizations,  whose  owners’  liabilities  are  limited  to  their  capital  
contributed  or  guarantees  made.  
 
CHARACTERISTICS  OF  LIMITED  COMPANIES  
1. Separate  legal  entity:   A  company  is  regarded  as  a  separate  person  from  its  owners  and  
managers.  As  a  result,  it  can  sue  or  be  sued,  it  can  own  property.  
This  concept  is  often  referred  to  as  veil  of  incorporation.  
2. Limited  liability:   Shareholders’  liability  is  limited  to  what  they  have  paid  for  
shares.  
3. Perpetual  succession:   Unlike  partnership  and  sole  trader,  a  company  does  not  cease  to  
exist  on  the  death  or  retirement  of  any  of  the  owners.  Owners  
can  buy  and  sell  their  shares  without  affecting  the  running  of  the  
business.  
4. Number  of  members:   There  is  no  limit  as  to  the  number  of  members  
5. Capital:   Company’s  capital  is  raised  through  the  issuance  of  shares  
6. Profit  distribution:   Profits  are  distributed  to  members  through  dividends.  
7. Retained  profits:   The  retained  profits  are  capitalized  are  reserves.  
8. Legislation:   Companies  are  highly  regulated.  They  are  required  to  comply  
with  the  requirements  of  Company’s  ACT  as  well  as  Financial  
Reporting  Standards.  
 
ADVANTAGES  OF  OPERATING  AS  A  LIMITED  COMPANY:  
1. The  liability  of  the  shareholders  is  limited.  Therefore,  in  case  of  company  going  bankrupt,  the  
individual  assets  of  the  owners  will  not  be  used  to  meet  the  company’s  debts.  Only  shareholders  
who  have  only  partly  paid  for  their  shares  can  be  forced  to  pay  the  balance  owing  on  the  shares,  
but  nothing  else.  
2. There  is  a  formal  separation  between  the  ownership  and  management  of  the  business.  This  
helps  in  clearly  identifying  the  responsible  persons.  
3. Ownership  is  vastly  shared  by  many  people,  hence  diversifying  risk,  and  funds  become  available  
is  substantial  amounts.  
4. Shares  in  the  business  can  be  transferred  relatively  easily.  
 
DISADVANTAGES:  
1. Formation  costs  are  normally  very  high.  
2. Companies  are  highly  regulated.  
3. Running  costs  are  also  very  high  i.e.  preparation  and  submission  of  annual  returns,  audit  fees  
etc.  
4. Profit  distribution  is  also  subject  to  some  restrictions.  Not  all  surpluses  from  the  business  
transactions  can  be  distributed  back  to  the  shareholders.  
5. Company  accounts  must  be  available  for  inspection  to  the  public.  
There  are  two  types  of  limited  companies:  
1. Public  limited  companies:  
a-­‐ They  have  the  abbreviation  Plc  of  public  limited  company  at  the  end  of  their  names  
b-­‐ Their  minimum  allotted  share  is  required  to  be  £50  000.  
c-­‐ They  can  invite  the  general  public  to  subscribe  for  their  shares  
d-­‐ Their  shares  may  be  traded  in  the  stock  exchange  i.e.  they  can  be  quoted  with  the  stock  
exchange.  
2. Private  limited  companies:  
a-­‐ They  have  the  abbreviation  ‘Ltd’  for  limited  at  the  end  of  their  names.  
b-­‐ They  are  not  allowed  to  invite  general  public  for  the  subscription  of  their  share  capital.  
 
COMPANY  FINANCE  
 
As  is  a  case  with  sole  traders  and  partnerships,  companies  also  have  two  main  sources  of  finance,  
namely;  capital  and  liabilities.  The  difference  is  on  naming  and  classification  of  these  terms.  
 
When  the  company  is  formed,  it  normally  issues  shares  to  be  subscribed  by  the  potential  members.  
People  who  subscribe  and  buy  company’s  shares  are  known  as  shareholders,  and  they  become  the  legal  
owners  of  the  company  depending  in  the  proportion  and  type  of  shares  they  hold.  They  receive  
dividends  as  return  on  their  invested  capital.  Dividends  are,  therefore,  appropriations  of  the  profits.  
 
On  the  other  hand,  the  company  can  borrow  funds  from  other  people  who  are  not  owners.  The  main  
form  of  company  borrowings  is  by  issuing  debenture,  which  is  a  written  acknowledgement  of  a  loan  to  a  
company,  given  under  the  company’s  seal.  The  debenture  holders  are  not  owners  of  the  company  but  
they  are  liabilities.  Debenture  holders  receive  a  fixed  percentage  of  interest  on  the  loan  amount.  
Debenture  interest  is  a  business  expense,  which  must  be  paid  when  is  due.  Other  forms  of  borrowings  
include  trade  creditors  and  bank  overdrafts.  
 
The  difference  between  shareholders  and  debenture  holders  can  be  analyzed  in  terms  of:  
1. Ownership;  and  
2. Return  on  investment  (Debenture  holders  will  get  it  even  if  the  company  makes  losses)  
 
SHARE  CAPITAL  
Share  capital  is  normally  of  two  types:  
1. Ordinary  share  capital;  and  (  the  real  shareholders)  
2. Preference  share  capital  
 
 
 
 
 
What  are  the  different  Types  of  Preference  Shares?  
1. Non-­‐cumulative  Preference  shares:  In  case  company  doesn’t  pay  enough  profits,  these  
shareholders  will  get  no  dividends  in  the  year  and  that  amount  of  dividend  will  never  be  given.  
2. Cumulative  Preference  Shares:  In  case  company  doesn’t  have  enough  profits,  these  
shareholders  will  get  no  dividend  in  the  year  and  that  amount  of  dividend  will  be  carried  
forward  to  next  year,  when  the  company  makes  enough  profit,  the  entire  amount  will  be  
payable  as  dividend.  
3. Participating    Preference  Shares  : Preference  shares  which,  in  addition  to  paying  a  specified  
dividend,  entitle  preference  shareholders  to  participate  in  receiving  an  additional  dividend  if  
ordinary  shareholders  are  paid  a  dividend  above  a  stated  amount.  
4. Redeemable  Preference  Shares:    Preference  shares  which  can  be  bought  back  by  the  company  
at  a  given  date  (  They  are  treated  like  liability  and  not  equity  ).  The  dividends  given  to  them  are  
treated  like  interest  expense.  
Their  difference  is  summarized  in  the  table  below:  
Aspect   Ordinary  shares   Preference  shares  
Voting  power   Carry  a  vote   Limited  or  no  voting  power  
Dividends   1. Vary  between  one  year  to   1. Fixed  percentage  of  the  nominal  
another,  depending  on  the   value.  
profit  for  the  period.   2. Cumulative.  If  not  paid  in  the  
2. Rank  after  preference   year  of  low  or  no  profits,  it  is  
shareholders.   carried  forward  to  the  next  years.  
3. Not  cumulative.   3. They  may  be  non-­‐cumulative.  
Liquidation   Entitled  to  surplus  assets  on   1. Priority  of  payment  before  
(Company  closing   liquidation,  after  all  liabilities  and   ordinary  shareholders,  but  after  
down)   preference  shareholders  have  been   all  other  liabilities.  
paid.  Whatever  is  left,  go  to   2. Not  entitled  to  surplus  assets  on  
Ordinary  shareholders.   liquidation.  
SHARE  CAPITAL  STRUCTURE  
Authorized  share  capital:   the  maximum  share  capital  that  the  company  is  empowered  to  issue  per  
its  memorandum  of  association.  It  is  sometimes  called  as  registered  
capital.  
Issued  share  capital:   The  total  nominal  value  of  share  capital  that  has  actually  been  issued  to  
the  shareholders.  
Called-­‐up  capital:   This  is  a  part  of  issued  capital  that  the  company  has  already  asked  the  
shareholders  to  pay.  Normally  when  the  company  issues  shares,  it  does  
not  require  its  shareholders  to  pay  the  full  price  on  spot.  Rather  it  calls  
the  installments  from  time  to  time.  It  is  the  amount  that  is  included  in  
the  balance  sheet.  
Paid-­‐up  capital:   This  is  the  total  amount  of  the  money  already  collected  from  the  
shareholders  to  date.  Dividend  is  paid  on  this.  
 
Uncalled  capital:     This  is  the  part  of  issued  capital,  which  the  company  has  not  yet  
requested  its  shareholders  to  pay  for.  
  
 

The  distinctions  between  reserves,  provisions  and  liabilities  

The  distinctions  between  reserves,  provisions  and  liabilities  are  of  the  utmost  importance  and  must  be  
learned.  
 
Provisions  are:  
amounts  written  off  or  retained  by  way  of  providing  for  depreciation,  renewals  or  diminution  in  
the  value  of  assets.    
Or,   retained  by  way  of  providing  for  nay  known  liability  of  which  the  amount  cannot  be  determined  
with  substantial  accuracy.  
Increases  and  decreases  in  provisions  are  debited  or  credited  in  the  Profit  and  Loss  account  and  credited  
to  a  Provision  account.  
 
Reserves  are:  
any  other  amounts  set  aside  out  of  profits  by  debiting  Profit  and  Loss  Appropriation  account  and  
crediting  the  relevant  provision  accounts,  
and   amounts  placed  to  capital  reserve  in  accordance  with  the  Companies  Act  such  as  share  
premium,  unrealized  surpluses  on  the  revaluation  of  non  current  assets,  and  amounts  set  aside  
out  of  distributable  reserves  to  maintain  capital  when  shares  are  redeemed.  
Liabilities  are  :amounts  owing  which  can  be  determined  with  substantial  accuracy.  
ISSUE OF SHARES

Public Issue: This is normal issue of shares to general public. A company can issue shares to
public to raise more capital , this is done at the market price. Public issues have higher cost of
issue ( this means the company has to incur high expenses when issuing the shares I.e.
advertising and administration ). The main advantage of issuing shares is that no interest has to
be paid on it and the company only have to provide a return when they actually make profits.

Rights Issue : A rights issue represents the offer of shares to the existing shareholders in
proportion to their existing holding at a lower price compared to the market value.

Advantages of Rights Issue over Public issue

• Rights issue are cheaper to administer and less risky way of raising capital

• Shareholders will get some incentive as they will get shares at a lower price.

Disadvantages

• Market price will fall

• The company could have raised more funds through a public issue

Bonus Issue: Is the issue of shares to existing shareholders for free .When the company is
short of cash and can’t give dividends so they give out shares for free to the ordinary
shareholders. Other reasons for bonus issue include.

• To utilize the capital reserves

• To increase confidence in the company’s future prospects as it is normally taken as a

signal of strength by the general public.

When doing bonus issue company will always use capital reserves first and then the revenue
reserves i.e.

We use share premium first and then revaluation reserve but if we don’t have enough
balance in both of these reserves then we will move to

• General Reserve

• Profit and Loss. ( Retained Earnings)

DEBENTURES  
 
A  debenture  is  a  document  containing  details  of  a  loan  made  to  a  company.  The  loan  may  be  secured  on  
the  assets  of  the  company,  when  it  is  known  as  a  mortgage  debenture.  If  the  security  for  the  loan  is  on  
certain  specified  assets  of  the  company,  the  debenture  is  said  to  be  secured  by  a  fixed  charge  on  the  
assets.  If  the  assets  are  not  specified,  but  the  security  is  on  the  assets  as  they  may  exist  from  time  to  
time,  it  is  known  as  a  floating  charge  on  the  assets.  An  unsecured  debenture  is  known  as  a  simple  or  
naked  debenture.  
Debentures  carry  the  right  to  a  fixed  rate  of  interest  which  forms  part  of  the  subscription  of  the  
debentures..  The  interest  must  be  paid  whether  or  not  the  company  makes  a  profit.  This  is  one  of  the  
distinctions  between  debentures,  and  shares  on  which  dividends  may  only  be  paid  if  profits  are  
available.  Debenture  interest  is  debited  as  an  expense  in  the  Profit  and  Loss  account  to  arrive  at  the  
profit  before  tax.  
 

RESERVES  
The  net  assets  of  the  company  are  represented  with  capital  and  reserves.  While  capital  represents  the  
claim  that  owners  have  because  of  the  number  if  shares  they  own,  reserves  represent  the  claim  that  
owners  have  because  of  the  wealth  created  by  the  company  over  the  years  but  not  distributed  to  them.  
There  are  two  main  types  of  reserves:  
Revenue  Reserve  
The  reserves  which  arise  from  profit  (Trading  activities  of  the  company).  These  are  transferred  from  the  
Appropriation  account.  Examples  include  General  Reserve  and  Retained  Profit  (Profit  and  Loss).  
Dividends  can  only  be  paid  to  the  amount  of  revenue  reserve  on  the  balance  sheet.  i.e.  the  maximum  
dividend  possible  is  the  sum  of  both  revenue  reserves.  
Capital  Reserve  
These  are  reserves  which  the  company  is  required  to  set  up  by  law  and  cannot  be  distributed  as  
dividends.  They  normally  arise  out  of  capital  transactions.  These  include  Share  Premium  and  Revaluation  
Reserve.  
Share  Premium  
Share  premium  occurs  when  a  company  issues  shares  at  a  price  above  its  nominal  (par)  value.  This  
excess  of  share  price  over  nominal  value  is  what  is  known  as  share  premium.  
What  are  the  uses  of  Share  Premium?  
1. Issue  Bonus  Shares  
2. Write  off  Formation  (Preliminary  Expenses)  
3. Write  off  Goodwill.  
Revaluation  Reserve    
 When  value  of  Assets  go  up  ,  companies  are  allowed  to  revalue  them  upwards  but  gain  has  to  
be  recorded  in  a  reserve  rather  then  income  statement  .  This  reserve  can  only  be  used  to  issue  
bonus  shares  or  devalue  the  same  asset  which  was  revalued  upwards  before  
 RATIOS  
 
PROFITABILITY  
 
GROSS  PROFIT  MARGIN       (   Gross  Profit   x      100   )  
                 Net  Sales  
While  the  gross  profit  is  a  dollar  amount,  the  gross  profit  margin  is  expressed  as  a  percentage  of  net  
sales.  The  Gross  Profit  Margin  illustrates  the  profit  a  company  makes  after  paying  off  its  Cost  of  Goods  
sold.  The  Gross  Profit  Margin  shows  how  efficient  the  management  is  in  using  its  labour  and  raw  
materials  in  the  process  of  production  (In  case  of  a  trader,  how  efficient  the  management  is  in  
purchasing  the  good).  There  are  two  key  ways  for  you  to  improve  your  gross  profit  margin.  First,  you  can  
increase  your  process.  Second,  you  can  decrease  the  costs  of  the  goods.  Once  you  calculate  the  gross  
profit  margin  of  a  firm,  compare  it  with  industry  standards  or  with  the  ratio  of  last  year.  For  example,  it  
does  not  make  sense  to  compare  the  profit  margin  of  a  software  company  (typically  90%)  with  that  of  an  
airline  company  (5%).  
 
Reasons  for  this  ratio  to  go  UP  (opposite  for  down)  
1. Increase  in  selling  price  per  unit  
2. Decrease  in  purchase  price  per  unit  due  to  lower  quality  of  goods  or  a  different  supplier.  
3. Decrease  in  purchase  price  per  unit  due  to  bulk  (trade)  discounts.  
4. Extensive  advertising  raising  sales  volume  (units)  along  with  selling  price.  
5. Understatement  of  opening  stock.  
6. Overstatement  of  closing  stock.  
7. Decrease  in  carriage  inwards/Duties  (trading  expenses)  
8. Change  in  Sales  Mix  (maybe  we  are  selling  some  new  products  which  give  a  higher  margin).  
 
NET  PROFIT  MARGIN       (   Operating  Profit   x      100   )  
               Net  Sales  
Net  profit  margin  tells  you  exactly  how  the  management  and  operations  of  a  business  are  performing.  
Net  Profit  Margin  compares  the  net  profit  of  a  firm  with  total  sales  achieved.  The  main  difference  
between  GP  Margin  and  NP  Margin  are  the  overhead  expenses  (Expenses  and  loss).  In  some  businesses  
Gross  Margin  is  very  high  but  Net  Margin  is  low  due  to  high  expenses,  e.g.  Software  Company  will  have  
high  Research  expenses.  
 
Reasons  for  this  ratio  to  go  UP  (opposite  for  down)  
All  the  reasons  for  GP  margin  apply  here.  Additionally  
1. Increase  in  cash  discounts  from  suppliers  
2. A  decrease  in  overhead  expenses  
3. Increase  in  other  incomes  like  gain  on  disposal,  Rent  Received  etc.  
Return  on  Capital  Employed  (ROCE)    
This  is  the  key  profitability  ratio  since  it  calculates  return  on  amount  invested  in  the  business.  If  this  ratio  
is  high,  this  means  more  profitability  (In  exam  if  ROCE  is  higher  for  any  firm  it  is  better  than  the  other  
firm  irrespective  of  GP  and  NP  Margin).  This  return  is  important  as  it  can  be  compared  to  other  
businesses  and  potential  investment  or  even  the  Interest  rate  offered  by  the  bank.  If  ROCE  is  lower  than  
the  bank  interest  then  the  owner  should  shoot  himself.  This  ratio  can  go  up  if  profits  increase  and  capital  
employed  remains  the  same.  Also  if  Capital  employed  decreases,  this  ratio  might  go  up.  
 
     Operating  Profit_     x   100  
   Capital  Employed  
                           Net  Profit  before  Interest  and  Tax  
 
 
Return  on  Total  Assets  
 
This  shows  how  much  profit  is  generated  on  total  assets  (Fixed  and  Current).  The  ratio  is  considered  and  
indicator  of  how  effectively  a  company  is  using  its  assets  to  generate  profits.  
 
   Operating  Profit_     x   100  
               Total  Assets  
 
Return  on  Shareholders’  Funds/Return  on  Net  Assets/Return  on  Owners  capital  
 
Since  all  the  capital  employed  is  not  provided  by  the  shareholders,  this  specifically  calculates  the  return  
to  the  shareholders  (It’s  almost  the  same  thing  as  ROCE)  
 
  Net  Profit  after  Tax   x   100  
  Shareholders  Funds  
 
            O.S.C  +  P.S.C  +  RESERVES  
NOTE:  
  Capital  Employed     =  Non  Current  Assets  +  Current  Assets  –  Current  
Liabilities  
 
  OR  
=    Total  Equity  +  Non  Current  Liabilities    
 
LIQUIDITY  AND  FINANCIAL  
 
As  we  know  a  firm  has  to  have  different  liquidity.  In  other  words  they  have  to  be  able  to  meet  their  day  
to  day  payments.  It  is  no  good  having  your  money  tied  up  or  invested  so  that  you  haven’t  enough  money  
to  meet  your  bills!  Current  assets  and  liabilities  are  an  important  part  of  this  liquidity  and  so  to  measure  
the  firms  liquidity  situation  we  can  work  out  a  ratio.  The  current  ratio  is  worked  out  by  dividing  the  
current  assets  by  the  current  liabilities.  
 
CURRENT  RATIO   =        Current  assets  _  
        Current  liabilities  
 
The  figure  should  always  be  above  1  or  the  form  does  not  have  enough  assets  to  meet  its  liabilities  and  
is  therefore  technically  insolvent.  However,  a  figure  close  to  1  would  be  a  little  close  for  a  firm  as  they  
would  only  just  be  able  to  meet  their  liabilities  and  so  a  figure  of  between  1.5  and  2  is  generally  
considered  being  desirable.  A  figure  of  2  means  that  they  can  meet  their  liabilities  twice  over  and  so  is  
safe  for  them.  If  the  figure  is  any  bigger  than  this  then  the  firm  may  be  tying  too  much  of  their  money  in  
a  form  that  is  not  earning  them  anything.  If  the  current  ratio  is  bigger  than  2  they  should  therefore  
perhaps  consider  investing  some  for  a  longer  period  to  earn  them  more.  
 
However,  the  current  assets  also  include  the  firm’s  stock.  If  the  firm  has  a  high  level  of  stock,  it  may  
mean  one  of  the  two  things,  
1. Sales  are  booming  and  they’re  producing  a  lot  to  keep  up  with  demand.  
2. They  can’t  sell  all  they’re  producing  and  it’s  piling  up  in  the  warehouse!  
 
If  the  second  of  these  is  true  then  stock  may  not  be  a  very  useful  current  asset,  and  even  if  they  could  
sell  it  isn’t  as  liquid  as  cash  in  the  bank,  and  so  a  better  measure  of  liquidity  is  the  ACID  TEST  (or  
QUICK)  RATIO.  This  excludes  stock  from  the  current  assets,  but  is  otherwise  the  same  as  the  current  
ratio.  
 
ACID  TEST  RATIO   =   Current  assets  –  stock  
               Current  liabilities  
 
Ideally  this  figure  should  also  be  above  1.5  for  the  firm  to  be  comfortable.  That  would  mean  that  they  
can  meet  all  their  liabilities  without  having  to  pay  any  of  their  stock  and  still  have  some  buffer.  This  
would  make  potential  investors  feel  more  comfortable  about  their  liquidity.  If  the  figure  is  below  1,  they  
may  begin  to  get  worried  about  their  firm’s  ability  to  meet  its  debts.  
 
 
 
Note  :  Working  Capital  =  Current  Assets  –  Current  Liabilities