Question 1: The Financial statement of XYZ Co is given below:

Balance Sheet of XYZ Co

as on March 31, 2022

LIABILITIES Rs
Shareholders Fund
Preference Share Capital(2,000, 5% Preference
2,00,000
shares,Rs,100 per share)
1,91,000
Equity Share Capital(19,100 shares of Rs.10 each)
4,28,000 19,54,000
Securities premium Account
11,35,000
Profit & Loss Appropriation A/c
10,23,000 10,23,000
Long term Liabilities
Debentures

Current Liabilities 3,82,000

Creditors 79,000
Bills Payable 60,000 6,20,000
Expenses outstanding 99,000
Provision for taxation
Total Liabilities 35.97.000
ASSETS Rs.
Fixed Assets
Gross Block 46,69,000
Less: Depreciation 22,95,000
23,74,000
Net Block

Current Assets: 3,63,000

Cash 5,03,000
Debtors 68,000 12,23,000
Marketable Securities 2,89,000
Inventories
Total Assets 35.97.000

INCOME STATEMENT
 for the year ending March 31, 2022

Rs. Rs.
Sales 30,74,000
Less: Cost of Goods Sold 20,88,000
Gross Profit 9,86,000
Less: Operating Expenses 1,00,000
Administrative expenses 25,000
General Expenses 1,94,000
Selling expenses 5,58,000
2,39,000
Depreciation
Operating Profit (EBIT) 4,28,000
Less: Interest Charges 98,000
Earnings Before Tax(EBT) 3,30,000
Less: Provision for Tax(30%) 99,000
Net Profit (EAT) 2,31,000
Less: Preference Share Dividend 10,000
Earning for Equity Shareholders 2,21,000
Less: Dividend paid to Equity Shareholders 98,000
Transfer to P&L App. A/c 1,23,000

Additional Information:

1. All sales are on Credit.

2. Principal amount of loan Rs.71,000 is repaid every year.
3. 75% of purchases are on credit basis
4. Market price of equity share on March 31,2022 is Rs. 80.
5. Assume 365 days in a year.
You are required to Calculate:

Liquidity Ratios:
 Current Ratio
 Liquidity Ratio / Quick Ratio /Acid Test Ratio
 Absolute liquidity Ratio / Cash Ratio

Efficiency Ratios:
 Inventory Turnover Ratio
 Average Age of Inventory / Inventory Velocity / Stock Velocity
 Debtors Turnover Ratio / Receivables Turnover Ratio
 Average age of debtors / Debtors Velocity / Receivables Velocity
 Creditors Turnover Ratio / Payables Turnover Ratio
 Average age of creditors / Creditors Velocity / Payables Velocity
 Working Capital Turnover
 Fixed Assets Turnover
 Total Assets turnover
 Capital Employed Turnover

Solvency Ratios:
 Debt to Equity Ratio
 TOL to Equity Ratio
 Interest Coverage Ratio
 Fixed Charge Coverage Ratio
 Financial Leverage Ratio

Profitability Ratio:
 Gross Profit Ratio
 Operating Profit Margin
 Net Profit margin
 Return on Total Assets Ratio
 Return on Capital Employed
 Return on Equity Shareholders Fund
 Earning Per share(EPS)
  Price Earnings Ratio
 Dividend Per Share

QUESTION 2:

From the following final accounts of Rohit Ltd. For the year ended 31 st March,2022, you are required to
calculate the following:

I. Acid test ratio

II. Stock Turnover ratio
III. Operating ratio
IV. Debt collection period;
V. Net profit to capital employed ratio.

Balance Sheet as on 31st March,2022

Liabilities Rs Assets Rs
Share capital(in share Land and Building 5,00,000
of Rs.10 each) 5,00,000
General Reserve 4,00,000 Plant and Machinery 2,00,000
Profit & Loss A/c 1,50,000 Stock 1,50,000
Sundry Creditors 2,00,000 Sundry Debtors 2,50,000
Cash and Bank Balance 1,50,000
12,50,000 12,50,000

Profit and Loss Account for the year ended 31 st March 2022

Opening stock 2,50,000 Sales 18,00,000

Purchases 10,50,000 Closing Stock 1,50,000
Gross Profit c/d 6,50,000
19,50,000 19,50,000
Administration 2,30,000 Gross Profit b/d 6,50,000
Expenses
Selling and 1,00,000 Other Incomes(Misc.) 50,000
Distribution Expenses
Expenses of Financing 20,000
Net Profit 3,50,000
7,00,000 7,00,000
 QUESTION 3:

From the information given below, calculate –

I. Working Capital
II. Capital Employed
III. Current Ratio
IV. Acid Test Ratio
V. Debt Equity Ratio

BALANCE SHEET OF ABC COMPANY LIMITED

Liabilities Rs Assets Rs
Shareholders Fund: Fixed Assets 1,80,000
Equity Share Capital 1,50,000
12%Pref. Share Capital 30,000
Reserves and Surplus 24,000
2,04,000
15% Debentures 48,000 Current Assets:
Stores 12,000
Stocks- in- Trade 32,000
Sundry Debtors 10,000
Cash in hand 2,000
Cash at Bank 4,000 60,000
Fictitious Assets: 48,000
Current Liabilities: Preliminary Expenses
Bank Overdraft 12,000 Discount on Issue of 4,000
Sundry Creditors 16,000 Debentures
Proposed Dividend 2,000
Provision for Taxation 10,000 40,000

2,92,000 2,92,000
 Question 4:

The Rao companys financial statements contain the following

information:

Particulars 31-03-2021 31-03-2022 Particulars 31-03-2021 31-03-2022

Current Liabilities 6,40,000 8,00,000 Cash 2,00,000 1,60,000
10% Debentures 16,00,000 16,00,000 Sundry 3,20,000 4,00,000
Debtors
Equity Share Capital 20,00,000 20,00,000 Temporary 2,00,000 3,20,000
Investment
Retained Earnings 4,68,000 8,12,000 Stock 18,40,000 21,60,000
Prepaid 28,000 12,000
Expenses
Total Current 25,88,000 30,52,000
Assets
Total Assets 56,00,000 64,00,000

STATEMENT OF PROFIT for the year ended 31st March, 2022

Sales 40, 00,000

Less: Cost of goods sold 28,00,000
Less: Interest 1,60,000 29,60,000
Net Profit before tax for 2021-22 10,40,000
Less: Taxes @ 50% 5,20,000

Net Profit after taxes 5,20,000

Dividend declared on equity shares Rs. 2,20,000.

From the above figures, appraise the financial position of the company from the
point of view of

1. Liquidity (Current Ratio, Acid Test Ratio)

 2. Solvency (Debt Equity Ratio, Interest Coverage Ratio)
3. Profitability (Net Profit Margin, Return on Capital Employed)
4. Activity (Stock Turnover Ratio, Total Assets Turnover Ratio)

Question 5:

Following are ratios and information relating to the activities of XYZ Ltd.:

1. Debtors Velocity 3 months

2. Gross Profit Ratio 20%
3. Gross Profit for the year ended 31st March, 2022 was Rs.5,00,000
4. Bills receivable were Rs. 60,000 at the end of the year.

You are required to find out:

A) Sales for the year 2021-22

B) Sundry Debtors as on 31-03-2022
 Question 6:

The following data is available from the records of X Ltd and Y Ltd both in
the same industry for the year ended 31st March ,2022:

Liabilities X Ltd. (Rs.) Assets X Ltd. (Rs.) Y Ltd. (Rs)

Y Ltd. (Rs)
Equity Share Capital 4,400 7,000 Plant and 6,780 9,600
Machinery
Retained Earnings 3,860 2,000 Stock 4,920 3,800
10% Debentures 2,000 4,000 Debtors 1,320 2,520
Sundry Creditors 3,600 4,200 Cash 840 1,280
13,860 17,200 13,860 17,200

X Ltd. Y Ltd.

Sales 22,400 32,800

Cost of goods sold 16,000 25,800

Other operating expenses 3,200 3,440

Interest Expenses 200 400

Income tax 1,500 1,580

Dividend 400 720

You are required to calculate following ratios:

1. Current Ratio and Acid test Ratio

2. Debt collection Period
3. Rate of Return on Shareholders fund
4. Debt Equity Ratio and Interest Coverage Ratio
5. Dividend payout Ratio and Retention Ratio