Indian School of Business

Financial Accounting in Decision Making, DHM1: 2022-23

Tutorial # 5

Questions 1-15 pertain to the AstraZeneca (AZ) financial statements for the year ended
December 31, 2020, provided with this exam as a PDF.

1. What proportion of AZ’s total assets was funded by owners in FY 2020?

A. 23%
B. 33%
C. 100%
D. 341%
E. None of the above

2. What proportion of AZ’s current assets was funded by suppliers in FY 2020?

A. 21%
B. 23%
C. 33%
D. 81%
E. None of the above

3. What proportion of AZ’s liabilities at the end of FY 2020 need to be repaid within one
year?
A. 11%
B. 40%
C. 60%
D. 65%
E. None of the above

4. What line item will include wages paid to factory workers who are involved in the
pharmaceutical production ?
A. Sales
B. Distribution expenses
C. Cost of sales
D. Selling, general, and administration expenses
E. None of the above

5. What is the biggest contributor for the increase in operating profit margin in the year
2020?
A. Increase in Gross profit margin
B. Reduction in Selling, general, and administration expenses as a % of sales
C. Reduction in distribution costs as a % of sales
D. Reduction in taxes paid
E. None of the above

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6. What is the approximate EBITDA for the FY 2020, where EBITDA = Net income +
interest + tax + depreciation & amortization?
A. $4,799 million
B. $5,162 million
C. $7,065 million
D. $8,371 million
E. None of the above

7. Which investing activity consumes the most cash in FY 2020?

A. Purchase of intangibles
B. Purchase of PP&E
C. Business combinations
D. Purchase of financial investments
E. None of the above

8. What cash dividends were paid during FY 2020?

A. $3,539 million
B. $3,572 million
C. $3,592 million
D. $4,761 million
E. None of the above

9. Share of after-tax losses of associates and joint ventures is added back to net income
while calculating cash flow from operations. Associates and Joint Ventures are
entities partly owned by AZ and other pharma companies in order to develop specific
therapies and medicines. Which of the following could be the most plausible
explanation.
A. This loss does not belong to AZ but to other companies in the joint venture
B. This amount represents the actual cash received by AZ from the associates and
joint ventures
C. This amount did not involve any actual cash outflow from AZ
D. This treatment is a standard practice while preparing the direct method statement
of cash flows
E. All of the above

10. For this question, assume that Product sales and Collaboration revenue are all on
credit (that is, Trade receivables). Approximately how many days did AZ take to
collect its trade receivables in FY 2020?
A. 51 days
B. 88 days
C. 90 days
D. 96 days
E. None of the above

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11. For the FY 2020, what is the provision for doubtful debts as a percentage of gross
trade receivables?
A. 0.12%
B. 0.33%
C. 0.45%
D. 0.60%
E. None of the above

12. What is the amount of inventory write-offs during the year ended 31/12/2019?
A. $149 million
B. $231 million
C. $621 million
D. $3,130 million
E. None of the above

13. On average each dollar invested in Property, Plant & Equipment (PP&E) generates
how much total revenue in FY 2020?
A. 2.98
B. 3.13
C. 3.22
D. 3.34
E. None of the above

14. What is the value of Gross Property, Plant & Equipment as on 31/12/2020?
A. $7,816 million
B. $8,251 million
C. $16,067 million
D. $47,185 million
E. None of the above

15. What is the approx. average age of AZ’s Property, Plant & Equipment (considered as
a block) ?
A. Somewhere in the 1-20 range, but no further estimation is possible
B. 7 years
C. 11 years
D. 12 years
E. 23 years
F. None of the above