-Analysis of Financial Statements

( Max Marks 30) TIME -1.30 Hrs.

PART B
OPTION 1
(Analysis of Financial Statements)

1. ‘Sale of marketable securities at par’ would result in inflow of cash. State whether the
statement is True or False. 1
2. The Quick ratio of a company is .08 : 1. State, giving reason, if Purchase of
Inventory of ₹ 60,000 on credit will increase, decrease or not affect the ratio. 1
3. Give the meaning of ‘Cash in Cash flow Statement . 1
4. State any one Limitation of ‘Analysis of Financial Statements’. 1
5. Under which type of activity will ‘Rent Paid’ be classified while preparing Cash Flow
Statement?
1
6. If the operating ratio of a company is 75%, operating profit ratio will be _________ .
1
7. Quick Assets do not include 1
(A) Cash in Hand
(B) Marketable Securities
(C) Prepaid Expenses
(D) Trade Receivables
8. Under which heads and sub-heads will the following items appear in the Balance
Sheet of a company as per Schedule III, Part I of the Companies Act, 2013 ? 3
(a) Capital Advances
(b) Interest accrued and due on borrowings
(c) Licenses and franchise
(d) Call in Advance
(e) Loose Tools
(f) Proposed Dividend
 Q.9 From the following information, calculate Gross Profit Ratio : 3
(Rs.)
Revenue from Operations :
Cash 2,00,000
Credit 8,00,000
Purchase :
Cash 40,000
Credit 3,60,000
Carriage Inwards 8,000
Salaries 42,000
Decrease in Inventory 1,22,000 Returns
Outwards 20,000 wages 20,000
10. Calculate Revenue from operations of BN Ltd. From the following information :
Current assets ₹ 8,00,000.
Quick ratio is 1.5 : 1 Current
ratio is 2 : 1.
Inventory turnover ratio is 6 times.
Goods were sold at a profit of 25% on cost.[3]

11 The Operating ratio of a company is 60%. State whether ‘Purchase of goods costing ₹
20,000’ will increase, decrease or not change the operating ratio.[1]

12. Calculate ‘Total Assets to Debt ratio’ from the following information :
₹
Equity Share Capital 4,00,000 Long Term Borrowings 1,80,000
Surplus i.e. Balance in statement of Profit and Loss 1,00,000
General Reserve 70,000 Current Liabilities 30,000
Long Term Provisions 1,20,000
[3]

13. The Debt Equity ratio of a company is 1 : 2. State whether ‘Issue of bonus shares’
will increase, decrease or not change the Debt Equity Ratio.[1]
14. From the following Balance Sheet of G Ltd. as at 31 st March, 2022 and additional
information, prepare Cash Flow Statement : 6
Balance Sheet of G Ltd. as at 31st March, 2022
Particulars Note No. 31.03.2022(Rs.) 31.03.2021 (Rs.)

I. Equity and Liabilities

1. Shareholder’s Funds:
(a) Share Capital 8,00,000
1 3,30,000 6,00,000
(b) Reserves and Surplus
2,20,000
2. Non-Current Liabilities :
2 1,60,000
Long-term Borrowings 1,00,000
3. Current Liabilities : 1,65,000
Trade Payables 1,95,000

Total 14,55,000 11,15,000

II. Assets : 3
1. Non-Current Assets:
(a) Fixed Assets 9,50,000
1,35,000 6,05,000
(b) Non-Current Investments
1,00,000
2. Current Assets:
80,000
(a) Current Investments 40,000
90,000
(b) Trade Receivables 2,00,000 2,00,000
(b) Cash and Cash Equivalents 1,70,000

Total 14,55,000 11,15,000

Notes to Accounts :
Note No. Particulars 31.03.2022 (Rs.) 31.03.2021 (Rs.)

1. Reserves and Surplus :

3,30,000 2,20,000
Surplus (i.e. Balance in
Statement of Profit and Loss) 3,30,000 2,20,000

2. Long-term Borrowings :
10% Debentures 1,60,000 1,00,000

1,60,000 1,00,000

3. Fixed Assets :
Machinery (cost) 10,70,000 7,00,000
(1,20,000) (95,000)
 (–) Accumulated Depreciation 9,50,000 6,05,000

Additional information :
10% Debentures ₹ 60,000 were issued on 1st August, 2021.[6]

Q.15 Calculate Cash Flow from Investing Activities from the following information:

Particulars 31st March 31stMarch

2022 2021
Investment in Shares of KGF Ltd. 26,00,000 16,00,000
11% Long-term Investments 3,00,000 10,00,000
Plant and Machinery 12,00,000 9,00,000
Goodwill 4,00,000 1,40,000

Additional Information:
(i) 10% dividend was received from KGF Ltd.
(ii) A machine costing ₹ 70,000 (Depreciation provided thereon ₹ 10,000) was
sold for ₹. 60,000. Depreciation charged during the year was ₹ 50,000[3]