UNIT-I

EXERCISE 1A(i)

CALCULATION OF LEVERAGES AND BEP

CALCULATION OF LEVERAGES

AIM:

To calculate DOL,DFL,DCL and use goal seek

ALGORITHM:

STEP 1: Open spreadsheet through start program MS office MS excel

STEP 2: Enter the given sales, variable cost, fixed cost, interest as input

STEP 3: Calculate contribution by deducting variable cost from sales and calculate EBIT by
deducting fixed cost from contribution

STEP 4: now calculate EBT by deducting interest from EBIT

STEP 5: Calculate DOL by using the formula contribution/EBIT

STEP 6: Calculate DFL by using the formula EBIT/EBT

STEP 7: calculate DCL by using the formula DOL*DFL

STEP 8: To use GOAL SEEK go to Data what if analysis goal seek set cell
(choose EBIT value cell) value(goal) by changing cell click ok. Value will change

STEP 9: Now save and terminate the program

INPUT:

SALES 2000000

VARIABLE COST 1400000

FIXED COST 400000

INTEREST 100000

IF EBIT IS 300000 HOW MUCH WILL BE SALES

1
OUTPUT:

CALCULATION OF DOL,DFL,DCL

GOAL SEEK VALUES:

2
GOAL SEEK:

3
 EXERCISE 1A(ii)

CALCULATION OF LEVERAGES

AIM:

To calculate DOL,DFL,DCL and use goal seek

ALGORITHM:

STEP 1: Open spreadsheet through start program MS office MS excel

STEP 2: Enter the given sales, variable cost, fixed cost, interest as input

STEP 3: Calculate contribution by deducting variable cost from sales and calculate EBIT by
deducting fixed cost from contribution

STEP 4: now calculate EBT by deducting interest from EBIT

STEP 5: Calculate DOL by using the formula contribution/EBIT

STEP 6: Calculate DFL by using the formula EBIT/EBT

STEP 7: calculate DCL by using the formula DOL*DFL

STEP 8: To use GOAL SEEK go to Data what if analysis goal seek set cell
(choose EBIT value cell) value(goal) by changing cell click ok. Value will change

STEP 9: Now save and terminate the program

INPUT:

SALES 9000000

VARIABLE COST 3000000

FIXED COST 3500000

INTEREST 250000

IF EBIT IS 4000000 WHAT WILL BE THE SALES

4
OUTPUT:

CALCULATE DOL, DFL,DCL

GOAL SEEK VALUE :

5
GOAL SEEK:

6
 EXERCISE 1A(iii)

CALCULATION OF LEVERAGES

AIM:

To calculate DOL,DFL,DCL and use goal seek

ALGORITHM:

STEP 1: Open spreadsheet through start program MS office MS excel

STEP 2: Enter the given sales, variable cost, fixed cost, interest as input

STEP 3: Calculate contribution by deducting variable cost from sales and calculate EBIT by
deducting fixed cost from contribution

STEP 4: now calculate EBT by deducting interest from EBIT

STEP 5: Calculate DOL by using the formula contribution/EBIT

STEP 6: Calculate DFL by using the formula EBIT/EBT

STEP 7: calculate DCL by using the formula DOL*DFL

STEP 8: To use GOAL SEEK go to Data what if analysis goal seek set cell
(choose EBIT value cell) value(goal) by changing cell click ok. Value will change

STEP 9: Now save and terminate the program

INPUT:

SALES 18150000

VARIABLE COST 5625000

FIXED COST 7000000

INTEREST 400000

IF EBIT IS 8000000 WHAT WILL BE THE SALES

7
OUTPUT:

CALCULATE DOL,DFL,DCL

GOAL SEEK:

8
GOAL SEEK:

9
 UNIT-I
EXERCISE 1B(i)

CALCULATION OF BREAK EVEN POINT

AIM:

To calculate break even point

ALGORITHM:

STEP 1: Open spreadsheet through start program ms office ms excel

STEP 2: Enter the given sales per unit, variable cost per unit, fixed cost and no of items sold as
input

STEP 3: Calculate revenue by using the formula selling price per unit*no of items sold and click
the cell and drag

STEP 4: calculate variable cost by using the formula variable cost per unit*no of items sold and
click the cell and drag

STEP 5:Enter the value of fixed cost (given in question)

STEP 6: Calculate total cost by using the formula variable cost+ fixed cost and click the cell and
drag

STEP 7: Calculate BEP IN UNITS by using the formula fixed cost/(selling price per unit-
variable cost per unit)

STEP 8:To insert chart select the data from revenue to total cost. Go to insert line chart

STEP 9: Click on chart go to design select data. A select data source dialog box
appears. Click edit on the horizontal axis label. Axis label dialog box appears. Select all the data
of no of items sold as axis label range and click ok

STEP 10:Select series 1 in the legend entries and click edit. Edit series dialog box appears. Click
on the revenue cell for series name and click ok. In the same way edit series 2, 3, 4 by selecting
variable cost, fixed cost and total cost as series names and click ok.

STEP 11: Click on the chart go to design chart layout select the layout with title, X-
Axis, Y-Axis

STEP 12: Edit the chart title as chart showing BEP, X-Axis as no of units sold,Y-Axis as
amount in rs

STEP 13: Now save and terminate the program

10
INPUT:

SELLING PRICE PER UNIT 20

VARIABLE COST PER UNIT 15

FIXED COST 100000

UNIT COST 10000-25000

OUTPUT:

BREAK EVEN POINT

11
DATA SOURCE WITH DIALOG BOX:

CHART WITH LAYOUT:

12
CHART SHOWING BEP:

13
 EXERCISE 1B(ii)

CALCULATION OF BREAK EVEN POINT

AIM:

To calculate break even point

ALGORITHM:

STEP 1: Open spreadsheet through start program ms office ms excel

STEP 2: Enter the given sales per unit, variable cost per unit, fixed cost and no of items sold as
input

STEP 3: Calculate revenue by using the formula selling price per unit*no of items sold and click
the cell and drag

STEP 4: calculate variable cost by using the formula variable cost per unit*no of items sold and
click the cell and drag

STEP 5:Enter the value of fixed cost (given in question)

STEP 6: Calculate total cost by using the formula variable cost+ fixed cost and click the cell and
drag

STEP 7: Calculate BEP IN UNITS by using the formula fixed cost/(selling price per unit-
variable cost per unit)

STEP 8:To insert chart select the data from revenue to total cost. Go to insert line chart

STEP 9: Click on chart go to design select data. A select data source dialog box
appears. Click edit on the horizontal axis label. Axis label dialog box appears. Select all the data
of no of items sold as axis label range and click ok

STEP 10:Select series 1 in the legend entries and click edit. Edit series dialog box appears. Click
on the revenue cell for series name and click ok. In the same way edit series 2, 3, 4 by selecting
variable cost, fixed cost and total cost as series names and click ok.

STEP 11: Click on the chart go to design chart layout select the layout with title, X-
Axis, Y-Axis

STEP 12: Edit the chart title as chart showing BEP, X-Axis as no of units sold,Y-Axis as
amount in rs

STEP 13: Now save and terminate the program

14
INPUT:

SELLING PRICE PER UNIT 22

VARIABLE COST PER UNIT 15

FIXED COST 90000

UNIT COST 10000-25000

OUTPUT:

BREAK EVEN POINT

15
DATA SOURCE WITH DIALOG BOX:

CHART WITH LAYOUT :

16
CHART SHOWING BEP:

17
 EXERCISE 1B(iii)

CALCULATION OF BREAK EVEN POINT

AIM:

To calculate break even point

ALGORITHM:

STEP 1: Open spreadsheet through start program ms office ms excel

STEP 2: Enter the given sales per unit, variable cost per unit, fixed cost and no of items sold as
input

STEP 3: Calculate revenue by using the formula selling price per unit*no of items sold and click
the cell and drag

STEP 4: calculate variable cost by using the formula variable cost per unit*no of items sold and
click the cell and drag

STEP 5:Enter the value of fixed cost (given in question)

STEP 6: Calculate total cost by using the formula variable cost+ fixed cost and click the cell and
drag

STEP 7: Calculate BEP IN UNITS by using the formula fixed cost/(selling price per unit-
variable cost per unit)

STEP 8:To insert chart select the data from revenue to total cost. Go to insert line chart

STEP 9: Click on chart go to design select data. A select data source dialog box
appears. Click edit on the horizontal axis label. Axis label dialog box appears. Select all the data
of no of items sold as axis label range and click ok

STEP 10:Select series 1 in the legend entries and click edit. Edit series dialog box appears. Click
on the revenue cell for series name and click ok. In the same way edit series 2, 3, 4 by selecting
variable cost, fixed cost and total cost as series names and click ok.

STEP 11: Click on the chart go to design chart layout select the layout with title, X-
Axis, Y-Axis

STEP 12: Edit the chart title as chart showing BEP, X-Axis as no of units sold,Y-Axis as
amount in rs

STEP 13: Now save and terminate the program

18
INPUT:

SELLING PRICE PER UNIT 15

VARIABLE COST PER UNIT 9

FIXED COST 90000

UNIT COST 10000-25000

OUTPUT:

BREAK EVEN POINT:

19
DATA SOURCE WITH DIALOG BOX:

CHART WITH LAYOUT :

20
CHART SHOWING BEP:

21
 UNIT-II
EXERCISE 2A(i)

DESIGNING CAPITAL STRUCTURE USING GOAL SEEK TECHNIQUE

AIM:
To compute the capital Structure using goal seek technique.

ALGORITHM:
STEP 1: Go to START MS Office MS Excel to open a new spreadsheet.
STEP 2: Enter the year and earnings before interest and tax.
STEP 3: Calculate the earnings before tax using formula EBT =EBIT – Interest.
STEP 4: Calculate Tax by using formula EBT*Tax%
STEP 5: Calculate earnings after tax by using formula EAT = EBT – Tax.
STEP 6: Enter number of equity shares (given in question) for all the years
STEP 7: Earning per share = Earnings after interest and tax divided by Total no of shares.
(EPS = EAT / NO OF SHARES)
STEP 8: Growth rate = AVERAGE ((Current year EPS – Previous year EPS) / Previous year
EPS)
STEP 9: Go to Data What if analysis Goal Seek. A dialog box appears. In ‘Set cell’
Option select the ‘growth rate’ of the last year. In ‘To value’ enter the ‘desired
Value’. In ‘changing cell’ select ‘EBIT’ cell where the changes is to be done.
STEP 10: Give OK.
STEP 11: To Draw a Chart select growth rate and go to insert chart line chart. Click the first line
chart. Right click on the chart choose select data and edit the horizontal axis by selecting the
years given.
STEP 12: Now save and terminate the program.

22
INPUT:

YEAR EBIT INTEREST

13-MAR 30000 5000
14-MAR 35000 5000
15-MAR 33000 5000
16-MAR 45000 5000
17-MAR 48000 5000

OUTPUT:

CALCULATION OF EPS &GROWTH RATE :

23
GOAL SEEK:

LINE CHART:

24
 EXERCISE 2A(ii)

DESIGNING CAPITAL STRUCTURE USING GOAL SEEK TECHNIQUE

AIM:
To compute the capital Structure using goal seek technique.

ALGORITHM:
STEP 1: Go to START MS Office MS Excel to open a new spreadsheet.
STEP 2: Enter the year and earnings before interest and tax.
STEP 3: Calculate the earnings before tax using formula EBT =EBIT – Interest.
STEP 4: Calculate Tax by using formula EBT*Tax%
STEP 5: Calculate earnings after tax by using formula EAT = EBT – Tax.
STEP 6: Enter number of equity shares (given in question) for all the years
STEP 7: Earning per share = Earnings after interest and tax divided by Total no of shares.
(EPS = EAT / NO OF SHARES)
STEP 8: Growth rate = AVERAGE ((Current year EPS – Previous year EPS) / Previous year
EPS)
STEP 9: Go to Data What if analysis Goal Seek. A dialog box appears. In ‘Set cell’
Option select the ‘growth rate’ of the last year. In ‘To value’ enter the ‘desired
Value’. In ‘changing cell’ select ‘EBIT’ cell where the changes is to be done.
STEP 10: Give OK.
STEP 11: To Draw a Chart select growth rate and go to insert chart line chart. Click the first line
chart. Right click on the chart choose select data and edit the horizontal axis by selecting the
years given.
STEP 12: Now save and terminate the program.

25
INPUT:

YEAR EBIT INTEREST

13-MAR 100000 3500
14-MAR 150000 3500
15-MAR 110000 3500
16-MAR 178000 3500
17-MAR 90000 3500

OUTPUT:

CALCULATION OF EPS &GROWTH RATE :

26
GOAL SEEK:

LINE CHART:

27
 EXERCISE 2A(iii)

DESIGNING CAPITAL STRUCTURE USING GOAL SEEK TECHNIQUE

AIM:
To compute the capital Structure using goal seek technique.

ALGORITHM:
STEP 1: Go to START MS Office MS Excel to open a new spreadsheet.
STEP 2: Enter the year and earnings before interest and tax.
STEP 3: Calculate the earnings before tax using formula EBT =EBIT – Interest.
STEP 4: Calculate Tax by using formula EBT*Tax%
STEP 5: Calculate earnings after tax by using formula EAT = EBT – Tax.
STEP 6: Enter number of equity shares (given in question) for all the years
STEP 7: Earning per share = Earnings after interest and tax divided by Total no of shares.
(EPS = EAT / NO OF SHARES)
STEP 8: Growth rate = AVERAGE ((Current year EPS – Previous year EPS) / Previous year
EPS)
STEP 9: Go to Data What if analysis Goal Seek. A dialog box appears. In ‘Set cell’
Option select the ‘growth rate’ of the last year. In ‘To value’ enter the ‘desired
Value’. In ‘changing cell’ select ‘EBIT’ cell where the changes is to be done.
STEP 10: Give OK.
STEP 11: To Draw a Chart select growth rate and go to insert chart line chart. Click the first line
chart. Right click on the chart choose select data and edit the horizontal axis by selecting the
years given.
STEP 12: Now save and terminate the program.

28
INPUT:

YEAR EBIT INTEREST

01-MAR 30000 5000
02-MAR 35000 5000
03-MAR 33000 5000
04-MAR 45000 5000
05-MAR 48000 5000
06-MAR 42000 5000
07-MAR 40000 5000
08-MAR 33000 5000
09-MAR 45000 5000
10-MAR 39000 5000

OUTPUT:

CALCULATION OF EPS &GROWTH RATE :

29
GOAL SEEK:

LINE CHART :

30
 UNIT-II
EXERCISE 2B (i)

CALCULATION OF WEIGHTED AVERAGE COST OF CAPITAL

AIM:

To compute weighted Average Cost of Capital.

ALGORITHM:

STEP 1: Enter the inputs of Total Debt, Total Equity, Interest Expenses, Tax rate, Risk-free
return, Beta, Market return as given.
STEP 2: Calculate Total Capital using the formula Total Debt + Total Equity.
STEP 3: Calculate Weightage of Debt using the formula Total Debt/Total Capital.
STEP 4: Calculate Cost of Debt using the formula Interest Expenses / Total Debt.
STEP 5: Calculate Weightage of Equity using the formula Total Equity / Total Capital.
STEP 6: Calculate Cost of Equity using the formula Risk free Return+Beta*(Market Return -
Risk free Return).
STEP 7: Calculate Weighted Average Cost of capital Weightage of Equity*Cost of Equity +
Weightage of Debt *Cost of Debt*(1-Tax rate).
STEP 8: Now save and terminate the program.

INPUT:

TOTAL DEBT 50000000.00

TOTAL EQUITY 70000000.00

INTEREST EXPENSES 2000000.00

TAX RATE 32%

RISK FREE RETURN 1.50%

BETA 1.2

MARKET RETURN 4%

31
OUTPUT:

WEIGHTED AVERAGE COST OF CAPITAL:

32
 EXERCISE 2B (ii)

CALCULATION OF WEIGHTED AVERAGE COST OF CAPITAL

AIM:

To compute weighted Average Cost of Capital.

ALGORITHM:

STEP 1: Enter the inputs of Total Debt, Total Equity, Interest Expenses, Tax rate, Risk-free
return, Beta, Market return as given.
STEP 2: Calculate Total Capital using the formula Total Debt + Total Equity.
STEP 3: Calculate Weightage of Debt using the formula Total Debt/Total Capital.
STEP 4: Calculate Cost of Debt using the formula Interest Expenses / Total Debt.
STEP 5: Calculate Weightage of Equity using the formula Total Equity / Total Capital.
STEP 6: Calculate Cost of Equity using the formula Risk free Return+Beta*(Market Return -
Risk free Return).
STEP 7: Calculate Weighted Average Cost of capital Weightage of Equity*Cost of Equity +
Weightage of Debt *Cost of Debt*(1-Tax rate).
STEP 8: Now save and terminate the program.

INPUT:

TOTAL DEBT 70000000.00

TOTAL EQUITY 120000000.00

INTEREST EXPENSES 2000000.00

TAX RATE 30%

RISK FREE RETURN 1.50%

BETA 1.2

MARKET RETURN 4%

OUTPUT:
33
WEIGHTED AVERAGE COST OF CAPITAL

34
 EXERCISE 2B (iii)

CALCULATION OF WEIGHTED AVERAGE COST OF CAPITAL

AIM:
To compute weighted Average Cost of Capital.

ALGORITHM:
STEP 1: Enter the inputs of Total Debt, Total Equity, Interest Expenses, Tax rate, Risk-free
return, Beta, Market return as given.
STEP 2: Calculate Total Capital using the formula Total Debt + Total Equity.
STEP 3: Calculate Weightage of Debt using the formula Total Debt/Total Capital.
STEP 4: Calculate Cost of Debt using the formula Interest Expenses / Total Debt.
STEP 5: Calculate Weightage of Equity using the formula Total Equity / Total Capital.
STEP 6: Calculate Cost of Equity using the formula Risk free Return+Beta*(Market Return -
Risk free Return).
STEP 7: Calculate Weighted Average Cost of capital Weightage of Equity*Cost of Equity +
Weightage of Debt *Cost of Debt*(1-Tax rate).
STEP 8: Now save and terminate the program.

INPUT :

TOTAL DEBT 60000000.00

TOTAL EQUITY 140000000.00

INTEREST EXPENSES 4000000.00

TAX RATE 35%

RISK FREE RETURN 1.50%

BETA 1.2
MARKET RETURN 4%

OUTPUT:
35
WEIGHTED AVERAGE COST OF CAPITAL

36
 UNIT-III

EXERCISE 3(i)
CALCULATION OF EOQ

AIM:

To calculate Economic Order Quantity (EOQ) and to draw graph

ALGORITHM:

STEP 1: Open spreadsheet through start program MS office MS excel

STEP 2: Enter the given annual consumption per unit, cost of placing order, cost of carrying one
unit, price per unit and order quantities as input

STEP 3: Calculate cost of carrying one unit value in price per unit(selling price per unit* cost of
carrying cost percentage)

STEP 4: calculate the total number of orders by using the formula annual consumption/order
quantity and click and drag the cell

STEP 5: Calculate average ordering quantity by using the formula order quantity/ 2. Now click
and drag the cell

STEP 6: Calculate total carrying cost by using the formula average ordering quantity * cost of
carrying one unit. To calculate total carrying cost for the other values make the cost of carrying
one unit cell as stable by using $ symbol front and back of the cell (eg: $c$8)click and drag it.

STEP 7: To calculate total ordering cost use the formula total number of orders * cost of placing
order. To calculate total ordering cost for the other values make the cost of placing order cell as
stable by using $ symbol front and back of the cell. Click and drag the cell.

STEP 8: Calculate the total cost by using the formula total carrying cost + total ordering cost

STEP 9:Calculate EOQ by using the formula =SQRT((2*AO)/C) where A is annual

consumption in units, O is ordering cost per unit and C is carrying cost per unit.

STEP 10: To insert chart select all the values of total carrying cost, total ordering cost and total
cost. Now go to insert line chart select the first line chart.

STEP 11: Right click on the chart click on select data. A select data source dialog box appears.
Click on the horizontal axis label. The axis lable dialog box appears. In the axis label range
select all the order quantities and click ok.

37
STEP 12: In the legent entries select series1 edit. The edit series dialog box appears. In the
series name click on the total carrying cost and click ok. Repeat the same for series 2 and 3 by
selecting the series name as total ordering cost and total cost.

STEP 13: Click on the chart design quick layout. Then click on the layout design with
both X-Axis and Y-Axis. Edit chart title as EOQ and X-Axis as ordering quantity and Y-Axis
as amount in Rs.

STEP 14:To calculate new EOQ using scenario manager,Go to what if analysis scenario
manager , the scenario dialogue box opens add under scenarios type the new values for
cost of placing order , cost of carrying cost , price per unit under changing cell select the
value cells of cost of placing order , cost of carrying cost and price per unit.Then click on
summary , scenario summary result cell choose the EOQ value cell Click ok

STEP 15:Now save and terminate the program.

INPUT:

COST OF 600
CONSUMPTION

COST OF $12
PLACING ONE
ORDER

COST OF 20%
CARRYING
ONE UNIT

SELLING $20
PRICE PER
UNIT

ORDERING 10 20 30 40 50 60 70 80 90 100 110 120

QUANITY

38
OUTPUT:

EOQ

DATA SOURCE DIALOG BOX:

39
CHART SHOWING EOQ:

SCENARIO MANAGER:

40
 EXERCISE 3(ii)
CALCULATION OF EOQ

AIM:

To calculate Economic Order Quantity (EOQ) and to draw graph

ALGORITHM:

STEP 1: Open spreadsheet through start program MS office MS excel

STEP 2: Enter the given annual consumption per unit, cost of placing order, cost of carrying one
unit, price per unit and order quantities as input

STEP 3: Calculate cost of carrying one unit value in price per unit(selling price per unit* cost of
carrying cost percentage)

STEP 4: calculate the total number of orders by using the formula annual consumption/order
quantity and click and drag the cell

STEP 5: Calculate average ordering quantity by using the formula order quantity/ 2. Now click
and drag the cell

STEP 6: Calculate total carrying cost by using the formula average ordering quantity * cost of
carrying one unit. To calculate total carrying cost for the other values make the cost of carrying
one unit cell as stable by using $ symbol front and back of the cell (eg: $c$8)click and drag it.

STEP 7: To calculate total ordering cost use the formula total number of orders * cost of placing
order. To calculate total ordering cost for the other values make the cost of placing order cell as
stable by using $ symbol front and back of the cell. Click and drag the cell.

STEP 8: Calculate the total cost by using the formula total carrying cost + total ordering cost

STEP 9:Calculate EOQ by using the formula =SQRT((2*AO)/C) where A is annual

consumption in units, O is ordering cost per unit and C is carrying cost per unit.

STEP 10: To insert chart select all the values of total carrying cost, total ordering cost and total
cost. Now go to insert line chart select the first line chart.

STEP 11: Right click on the chart click on select data. A select data source dialog box appears.
Click on the horizontal axis label. The axis lable dialog box appears. In the axis label range
select all the order quantities and click ok.

STEP 12: In the legent entries select series1 edit. The edit series dialog box appears. In the
series name click on the total carrying cost and click ok. Repeat the same for series 2 and 3 by
selecting the series name as total ordering cost and total cost.

41
STEP 13: Click on the chart design quick layout. Then click on the layout design with
both X-Axis and Y-Axis. Edit chart title as EOQ and X-Axis as ordering quantity and Y-Axis
as amount in Rs.

STEP 14:To calculate new EOQ using scenario manager,Go to what if analysis scenario
manager , the scenario dialogue box opens add under scenarios type the new values for
cost of placing order , cost of carrying cost , price per unit under changing cell select the
value cells of cost of placing order , cost of carrying cost and price per unit.Then click on
summary , scenario summary result cell choose the EOQ value cell Click ok

STEP 15:Now save and terminate the program.

INPUT:

COST OF 600
CONSUMPTION

COST OF $12
PLACING ONE
ORDER

COST OF 20%
CARRYING
ONE UNIT

SELLING $20
PRICE PER
UNIT

ORDERING 20 40 60 80 100 120 140

QUANITY

42
OUTPUT:

EOQ:

DATA SOURCE DIALOG BOX:

43
CHART SHOWING EOQ:

SCENARIO MANAGER:

44
 EXERCISE 3(iii)
CALCULATION OF EOQ

AIM:

To calculate Economic Order Quantity (EOQ) and to draw graph

ALGORITHM:

STEP 1: Open spreadsheet through start program MS office MS excel

STEP 2: Enter the given annual consumption per unit, cost of placing order, cost of carrying one
unit, price per unit and order quantities as input

STEP 3: Calculate cost of carrying one unit value in price per unit(selling price per unit* cost of
carrying cost percentage)

STEP 4: calculate the total number of orders by using the formula annual consumption/order
quantity and click and drag the cell

STEP 5: Calculate average ordering quantity by using the formula order quantity/ 2. Now click
and drag the cell

STEP 6: Calculate total carrying cost by using the formula average ordering quantity * cost of
carrying one unit. To calculate total carrying cost for the other values make the cost of carrying
one unit cell as stable by using $ symbol front and back of the cell (eg: $c$8)click and drag it.

STEP 7: To calculate total ordering cost use the formula total number of orders * cost of placing
order. To calculate total ordering cost for the other values make the cost of placing order cell as
stable by using $ symbol front and back of the cell. Click and drag the cell.

STEP 8: Calculate the total cost by using the formula total carrying cost + total ordering cost

STEP 9:Calculate EOQ by using the formula =SQRT((2*AO)/C) where A is annual

consumption in units, O is ordering cost per unit and C is carrying cost per unit.

STEP 10: To insert chart select all the values of total carrying cost, total ordering cost and total
cost. Now go to insert line chart select the first line chart.

STEP 11: Right click on the chart click on select data. A select data source dialog box appears.
Click on the horizontal axis label. The axis lable dialog box appears. In the axis label range
select all the order quantities and click ok.

STEP 12: In the legent entries select series1 edit. The edit series dialog box appears. In the
series name click on the total carrying cost and click ok. Repeat the same for series 2 and 3 by
selecting the series name as total ordering cost and total cost.

45
STEP 13: Click on the chart design quick layout. Then click on the layout design with
both X-Axis and Y-Axis. Edit chart title as EOQ and X-Axis as ordering quantity and Y-Axis
as amount in Rs.

STEP 14:To calculate new EOQ using scenario manager,Go to what if analysis scenario
manager , the scenario dialogue box opens add under scenarios type the new values for
cost of placing order , cost of carrying cost , price per unit under changing cell select the
value cells of cost of placing order , cost of carrying cost and price per unit.Then click on
summary , scenario summary result cell choose the EOQ value cell Click ok

STEP 15:Now save and terminate the program.

INPUT:

COST OF 7500
CONSUMPTION

COST OF $1200.00
PLACING ONE
ORDER

COST OF 20%
CARRYING
ONE UNIT

SELLING $250.00
PRICE PER
UNIT

ORDERING 2000 4000 6000 8000 1000

QUANITY 0

46
OUTPUT:

EOQ

DATA SOURCE DIALOG BOX:

47
CHART SHOWING EOQ:

SCENARIO MANAGER:

48
 U
NIT-4
EXERCISE 4(i)

CALCULATION OF AGING SCHEDULE

AIM:

To calculate the aging schedule

ALGORITHM:

STEP-1: Open spreadsheet through start programs ms office ms excel

STEP-2: Enter the inputs such as Pending Bill statement date, Bill date (in order), party name
and bill amount

STEP-3: To calculate credit period go to fx function select ‘day360’. Click ok

STEP-4: Set the start date as the bill date and the ending date as pending bill statement date.
Click ok. . To calculate the credit period for the other dates make the ending date cell as constant
by using $ symbol in front and at the back of the cell (eg: $c$8) click and drag it.

STEP-5: To calculate Period wise outstanding bill amount use the formula ‘@SUM’ by
selecting the range of bill amount whose credit period falls into the number of days specified in
the ageing schedule.

STEP-6: Create the ageing schedule table with columns Ageing Schedule, Outstanding Amount
and Percentage. Enter the ageing schedule days under Ageing schedule column

49
STEP-7: Enter the respective outstanding bill total from the period wise outstanding amount
column

STEP-8: Calculate the percentage of the outstanding amount by using the formula, (each period
outstanding amount/total of outstanding amount). To calculate the percentage of outstanding
amount for the other schedule make the total outstanding amount cell constant by using $ symbol
in front and at the back of the cell (eg: $c$8) click and drag it.

STEP-9: Calculate the total outstanding amount by adding total penal interest amount from the
total of all outstanding amount

STEP-10: Save and terminate the program.

50
INPUT:

CALCULATION OF
AGEING SCHEDULE
PENDING BILL 31-MAR-2020
STATEMENT
CREDIT PERIOD DAYS 40

PENAL INTEREST RATE 18% 0.18

BILL DATE PARTY NAME BILL AMOUNT

01-JAN A 10000
02-JAN V 15000
04-JAN L 15000
05-JAN O 25000
07-FEB P 22000
08-FEB G 10000
15-FEB K 18000
18-FEB R 28000
21-FEB Y 10000
23-FEB D 32000
28-FEB N 33000
03-MAR E 35000
06-MAR F 32000
12-MAR I 36000
22-MAR H 38000
28-MAR S 40000

OUTPUT:
51
CALCULATION OF AGEING SCHEDULE:

EXERCISE 4(ii)

52
 CALCULATION OF AGING SCHEDULE

AIM:

To calculate the aging schedule

ALGORITHM:

STEP-1: Open spreadsheet through start programs ms office ms excel

STEP-2: Enter the inputs such as Pending Bill statement date, Bill date (in order), party name
and bill amount

STEP-3: To calculate credit period go to fx function select ‘day360’. Click ok

STEP-4: Set the start date as the bill date and the ending date as pending bill statement date.
Click ok. . To calculate the credit period for the other dates make the ending date cell as constant
by using $ symbol in front and at the back of the cell (eg: $c$8) click and drag it.

STEP-5: To calculate Period wise outstanding bill amount use the formula ‘@SUM’ by
selecting the range of bill amount whose credit period falls into the number of days specified in
the ageing schedule.

STEP-6: Create the ageing schedule table with columns Ageing Schedule, Outstanding Amount
and Percentage. Enter the ageing schedule days under Ageing schedule column

STEP-7: Enter the respective outstanding bill total from the period wise outstanding amount
column

STEP-8: Calculate the percentage of the outstanding amount by using the formula, (each period
outstanding amount/total of outstanding amount). To calculate the percentage of outstanding
amount for the other schedule make the total outstanding amount cell constant by using $ symbol
in front and at the back of the cell (eg: $c$8) click and drag it.

STEP-9: Calculate the total outstanding amount by adding total penal interest amount from the
total of all outstanding amount

STEP-10: Save and terminate the program.

53
INPUT:

CALCULATION OF
AGEING SCHEDULE
PENDING BILL 31-MAR-2020
STATEMENT
CREDIT PERIOD DAYS 40

PENAL INTEREST RATE 18% 0.18

BILL DATE PARTY NAME BILL AMOUNT

01-JAN M 10000
01-JAN N 15000
02-JAN B 15000
05-JAN V 30000
10-JAN C 22000
16-JAN X 16000
20-JAN Z 25000
22-JAN A 60000
02-FEB Q 55000
06-FEB Y 45000
11-FEB E 46000
15-FEB D 23000
23-FEB F 64000
25-FEB R 35000
25-FEB T 18000
26-FEB G 36000
26-FEB H 38000
03-MAR Y 29000
05-MAR U 47000

54
OUTPUT:

CALCULATION OF AGEING SCHEDULE

55
 EXERCISE 4(iii)

CALCULATION OF AGING SCHEDULE

AIM:

To calculate the aging schedule

ALGORITHM:

STEP-1: Open spreadsheet through start programs ms office ms excel

STEP-2: Enter the inputs such as Pending Bill statement date, Bill date (in order), party name
and bill amount

STEP-3: To calculate credit period go to fx function select ‘day360’. Click ok

STEP-4: Set the start date as the bill date and the ending date as pending bill statement date.
Click ok. . To calculate the credit period for the other dates make the ending date cell as constant
by using $ symbol in front and at the back of the cell (eg: $c$8) click and drag it.

STEP-5: To calculate Period wise outstanding bill amount use the formula ‘@SUM’ by
selecting the range of bill amount whose credit period falls into the number of days specified in
the ageing schedule.

STEP-6: Create the ageing schedule table with columns Ageing Schedule, Outstanding Amount
and Percentage. Enter the ageing schedule days under Ageing schedule column

STEP-7: Enter the respective outstanding bill total from the period wise outstanding amount
column

STEP-8: Calculate the percentage of the outstanding amount by using the formula, (each period
outstanding amount/total of outstanding amount). To calculate the percentage of outstanding
amount for the other schedule make the total outstanding amount cell constant by using $ symbol
in front and at the back of the cell (eg: $c$8) click and drag it.

STEP-9: Calculate the total outstanding amount by adding total penal interest amount from the
total of all outstanding amount

STEP-10: Save and terminate the program.

56
INPUT:

CALCULATION OF
AGEING SCHEDULE
PENDING BILL 31-MAR-2020
STATEMENT
CREDIT PERIOD DAYS 40

PENAL INTEREST RATE 18% 0.18

BILL DATE PARTY NAME BILL AMOUNT

01-JAN M 10000
01-JAN N 15000
02-JAN B 15000
05-JAN V 30000
10-JAN E 22000
16-JAN X 16000
20-JAN Z 25000
22-JAN A 60000
02-FEB Q 55000
06-FEB Y 45000
11-FEB E 46000
15-FEB D 23000
23-FEB F 64000
25-FEB R 35000
25-FEB G 36000
26-FEB H 38000

OUTPUT:

57
CALCULATION OF AGEING SCHEDULE:

58
 UNIT-5
EXERCISE 5(i)

CALCULATION OF DEPRECIATION

AIM:

To calculate the depreciation using straight line method and written down value
method(Diminishing Balance Method).

ALGORITHM:

STEP-1: Open spreadsheet through start programs MS office MS excel

STEP-2: Enter the inputs such as Cost, Salvage value and life of the asset.

STEP-3: To calculate the depreciation value under straight line method go to fx function
SLN(Cost, Salvage, Life). Click ok and drag it.

STEP-4:To calculate the depreciation value under diminishing balance method go to fx function
DB(Cost, Salvage, Life, Period). Click ok and drag it.

STEP-5:To calculate the asset value under straight line method use the formula previous year
cost of asset- current year depreciation value under straight line method. Click ok and drag it.

STEP-6:To calculate the asset value under diminishing balance method use the formula previous
year cost of asset- current year depreciation value under diminishing balance method. Click ok
and drag it.

STEP-7:To draw a Chart, select asset value under straight line method and diminishing balance
method and go to insert chart line chart. Click the first line chart.
STEP-8: Save and terminate the program.

INPUT:

COST 10000

SALVAGE 1000

LIFE IN YEAR 10

OUTPUT:

59
CALCULATE OF DEPRECIATION &ASSET VALUE

DEPRECIATION CHART:

EXERCISE 5(ii)

60
 CALCULATION OF DEPRECIATION

AIM:

To calculate the depreciation using straight line method and written down value
method(Diminishing Balance Method).

ALGORITHM:

STEP-1: Open spreadsheet through start programs MS office MS excel

STEP-2: Enter the inputs such as Cost, Salvage value and life of the asset.

STEP-3: To calculate the depreciation value under straight line method go to fx function
SLN(Cost, Salvage, Life). Click ok and drag it.

STEP-4:To calculate the depreciation value under diminishing balance method go to fx function
DB(Cost, Salvage, Life, Period). Click ok and drag it.

STEP-5:To calculate the asset value under straight line method use the formula previous year
cost of asset- current year depreciation value under straight line method. Click ok and drag it.

STEP-6:To calculate the asset value under diminishing balance method use the formula previous
year cost of asset- current year depreciation value under diminishing balance method. Click ok
and drag it.

STEP-7:To draw a Chart, select asset value under straight line method and diminishing balance
method and go to insert chart line chart. Click the first line chart.
STEP-8: Save and terminate the program.

INPUT:

COST 5000

SALVAGE 500

LIFE IN YEAR 10

OUTPUT:
61
CALCULATION OF DEPRECIATION

DEPREICATION CHART:

62
 EXERCISE 5(iii)

CALCULATION OF DEPRECIATION

AIM:

To calculate the depreciation using straight line method and written down value
method(Diminishing Balance Method).

ALGORITHM:

STEP-1: Open spreadsheet through start programs MS office MS excel

STEP-2: Enter the inputs such as Cost, Salvage value and life of the asset.

STEP-3: To calculate the depreciation value under straight line method go to fx function
SLN(Cost, Salvage, Life). Click ok and drag it.

STEP-4:To calculate the depreciation value under diminishing balance method go to fx function
DB(Cost, Salvage, Life, Period). Click ok and drag it.

STEP-5:To calculate the asset value under straight line method use the formula previous year
cost of asset- current year depreciation value under straight line method. Click ok and drag it.

STEP-6:To calculate the asset value under diminishing balance method use the formula previous
year cost of asset- current year depreciation value under diminishing balance method. Click ok
and drag it.

STEP-7:To draw a Chart, select asset value under straight line method and diminishing balance
method and go to insert chart line chart. Click the first line chart.
STEP-8: Save and terminate the program.

INPUT:

COST 5000

SALVAGE 500

LIFE IN YEAR 10

63
OUTPUT:

CALCULATION OF DEPRCIATION & ASSET VALUE

DEPRICIATION:

64