Indian School of Business

Financial Accounting in Decision Making (FADM)

Digital Headstart Module: 2022-23

Group Assignment # 1

Refer to the Annual report for Sun Pharma for the year ended March 31, 2021and answer the following
questions.

Notes:

• All questions refer to the CONSOLIDATED financial statements and not the stand-alone accounts.
• Unless otherwise stated, questions refer to March 31, 2021 amounts and balances.
• Make the following assumptions as you answer the questions:
o COGS = Cost of material consumed + Purchase of stock in trade + Change in inventories
o Sales = Revenue from operations
o Other expenses are related to operations
• Numbers here are expresses in ₹ Millions, consistent with the presentation by Sun Pharma.

NOTE: THIS DOCUMENT IS PROVIDED TO FACILITATE GROUP DISCUSSIONS.

PLEASE ANSWER THE “GROUP ASSIGNMENT – QUIZ” IN QUIZ FORMAT
INDIVIDUALLY.

1. Who is the company’s auditor? BSR & Co- KPMC

a. KPMG GROUP SRBC- EY
b. EY GROUP Phrazer and ross- Deloitte
c. DELOITTE GROUP PWC- Lovelock and lewese
d. PRICE WATERHOUSE GROUP

2. What are the total assets?

a. ₹ 676,667
b. ₹ 304,420
c. ₹ 494,798
d. ₹ 372,246

3. What proportion of the total assets are funded by shareholders?

a. 73%
b. 64%
c. 68%
d. 91%

4. What proportion of the total assets are funded by non-owners as of March 31, 2020?
a. 6%
b. 36%
c. 27%
d. 28%

5. What is the company’s largest asset?

a. Buildings
b. Property, plant and equipment
 c. Goodwill (Net)
d. Other intangible assets

6. What is the common size Trade receivables?

a. 16 %
b. 13 %
c. 11 %
d. 10 %

7. By what percentage have total assets changed during the year?

a. 9 %
b. 0.9 %
c. -0.9 %
d. 1%

8. What proportion of total assets is current?

a. 9 %
b. 13 %
c. 45 %
d. 55 %

9. What portion of the company’s liabilities was to be repaid or settled by March 31, 2021?
a. 88%
b. 82%
c. 24%
d. 23%

10. What is the operating profit margin?

a. 18.7%
b. 19.1% Operating profit/ revenue from operations
c. 21.0%
d. 47.4%

11. What is the net profit margin?

a. 4%
b. 7% profit/ revenue from operations
c. 10%
d. 18%
e. 28%

12. What is the average (i.e., effective) tax rate?

a. 1.5%
b. 34.2%
Total tax expense/ profits before tax
c. 22.5%
d. 18.4%
13. Does the company generate enough cash from its operations?
a. Yes
b. No Operating cash flow
c. Can’t be Determined If net cash flow from ops is positive
d. None of the above then generate enough cash from its
ops
14. What are the largest component of cash flow from investing activities?
a. Purchase of property, plant, and equipment
b. Proceeds from sale of investments
c. Dividend received
d. Interest received

15. What is the largest component of cash flow from financing activities?
a. Proceeds from borrowings
b. Dividend received
c. Repayment of borrowings
d. Dividend paid

16. During the year ended March 31, 2021, how many days did it take for the company to collect
from its customers? How many months of sales is stuck
a. 80 days
Revenue
b. 96 days
Rev/365… (1)
c. 98 days
d. 101 days Avg AR ..(2)
1/2
17. What is the ratio of the Allowance for bad debts to Gross Trade receivables?
a. 0.6%
b. 1.6% Go to notes of trade receivables
c. 2.6%
d. 3.6%

18. What is the largest component of inventory?

a. Raw materials and packing materials
b. Finished goods
c. Stores and spares
d. Stock-in-trade

19. What is the cost flow assumption for inventory valuation?

a. FIFO method
b. LIFO method All accounting policies in note 2
c. Specific identification method
d. Weighted average method

20. What is the inventory turnover ratio? Inventory turnover ratio

a. 0.97 = COGS/ Avg Inventory
b. 1.03
avg inventory=Cost of materials consumed +Purchases of stock-
in-trade +Changes in inventories of finished goods, stock-in-trade
and work-in-progress
 c. 377
d. 354

21. How many days does this company take to pay its suppliers?
a. 41
b. 60
c. 90
d. 158

22. Assume that the AP days, Inventory days and AR days are 120, 200 and 100 respectively,
what is the cash conversion cycle (in days)?
a. 420
b. 220
c. 180
d. 20

23. What was the Gross Property, Plant and Equipment (that is the cost or deemed cost of the
PPE)?
a. 185,797.4
b. 177,985.4
c. 116,289.0
d. 102,349.9

24. What was the carrying value of the PP&E sold during the year?
a. ₹ 1,356.3
b. ₹ 1,637.6
c. ₹ 1,401.9
d. ₹ 281.3

25. How much was the carrying value of PP&E purchased during the year ended March 31,
2020?
a. ₹ 9,635
b. ₹ 11,312
c. ₹ 11,701
d. Such information is not provided