NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Financial Accounting and Analysis

Internal Assignment Applicable for December 2021

Examination

Table of Contents
Q.1..............................................................................................................................................

Answer.......................................................................................................................................

Introduction............................................................................................................................

Concept and Analysis.............................................................................................................

Conclusion..............................................................................................................................

Q.2..............................................................................................................................................

Answer.......................................................................................................................................

Introduction............................................................................................................................

Concept and Analysis.............................................................................................................

Conclusion............................................................................................................................

Q.3 a.........................................................................................................................................

Answer.....................................................................................................................................

Introduction..........................................................................................................................

Concept and Analysis...........................................................................................................

Conclusion............................................................................................................................

Q.3 b.........................................................................................................................................

Answer.....................................................................................................................................

Introduction..........................................................................................................................

Concept and Analysis...........................................................................................................

Conclusion............................................................................................................................

References................................................................................................................................
Q.1

Answer
Introduction

A financial statement that includes the company's current operations and alternative
investment ventures is what cash flow is. The policy also extends to all debts incurred as
a result of business capital invested during the specified time period. Market players
have seen how each activity contributes to the overall performance of firms using
budgetary accounting. The cash flow statement examines what a business receives from
activities, investments, and raising capital in order to make it as simple for investors.
The total of these three components is known as gross working capital. Traders can use
these three essential factors of an earnings report to determine the property's value or an
entire business.
Concept and Analysis

Particulars Details Amount

(A) Cash flow from Operating Activities    

     

Net income before taxes 269244  

Add: Non-Cash and Non Operation Expenses    

Depreciation 85000  

Amortization expenses 95780  

Loss on Sale of Assets 11000  

     

Less: Non Cash and Non-Operation Income    

Gain on sale of Assets (Investment) -45000  

Interest income -35000  

     

Cash flow before changes in Working Capital    

Changes in current assets -  

Changes in current liabilities -  

     

Cash generated from operation activities 490024  

(-) taxation paid -  

     

Cash generated from operation activities   490024

     

(A)   Cash flow from Investing Activities    

     

Dividend Income 26000  

Net Cash flow from investing activities   26000

     

(B)   Cash flow from financial activities    

     

Finance cost paid on debenture -12000  

     

Net Cash flow from financial activities   -12000

Net increase in cash and cash equivalents   504024

Conclusion

However, folks won't get anywhere without reading, comprehending, and evaluating this
important first step. It's possible to use liquidity ratios to estimate the profitability of
your company. Monitoring your cash flow all the time helps you determine whether or
not your daily expenses should be maintained and lets you know if your corporate has
the capital to fulfill all of its commitments, including hiring employees and paying
sellers while still expanding your operations. Assuming your financial situation has
worsened, you have three options: borrow short-term cash, plan fee strategies, or boost
their income. If your financial reporting shows that you also have money left over to
invest in new technology, you should. If not, save it for when things get slow. It's not
enough that a company has cash reserves to mean it's profitable. Instead, focus on your
profit margins. Without enough funds to cover its expenses, even a highly lucrative
business can run into financial difficulties. In spite of having a lot of debt, a business can
still be financially sound.
Q.2

Answer
Introduction

Horizontal analysis, also referred to as market analysis, enables you to discover patterns
and trends over a long period of time. Only net income and cash flows are considered in
a vertical analysis. Truly significant changes can only be realized throughout a three-
year long vertical analysis. You'll probably have to use a handheld device for lateral
evaluation and used an app when it tends to come to your first financial records because
the stress level is primarily determined by the pricing structure you're being used to
begin with.
Concept and Analysis

A sector of the economy that is important.

In order to create, produce and sell an industry's products and/or services you must look
at the to provide chain's activity flow. This rate is generally completed using one of
three economic research paradigms or techniques.

Determine the company's aims and mission.

Examine the challenges with the product lines and their functions, profits, user
confidence in the company, and control of costs after that to conclude your research.
The allocation process must also be integrated, geographical diversification and industry
diversification must be considered.

Company's point of view

Analyze the most important financial records from an accounting perspective. Keep in
mind this same challenge of brand awareness, pricing, and classification when trying to
evaluate the balances. The amount of cash a company has on hand is perhaps the most
telltale sign of its fiscal health. It's all about struggling to figure out how much revenue
the business is really making when analyzing profits remarks, right? Cumulative account
holders can be used to examine a company's total liquidity over time, with a focus on
technology and the inputs of that liquidity. These accounts look ahead to the company's
own activities, assets, and financing decisions as well.
A company's ability to survive and prosper over the long term Analyze and evaluate
risks on a regular basis.

The company`s appraisal and bank disclosures are now available to those with an
involvement in money. Finance data can be analyzed using a variety of ratios. Among
these are cash flow, budgeting and production as well as bank risk and market
revelations for debt and bank. It's important to note that efficiency in the workplace,
company's financial reporting methodologies for bonds, and shareholder performance all
play a role in determining profitability. The opposite measurable metric can also be
broken down into its component parts, which is an important thing to keep in mind.
There will be a comparison between the current period's results and those from previous
periods for all benchmark tests, linked organizations, and share prices.

Developing your own companies will necessitate the use of the own set of accounts.

Despite the length of time, economic advisers should be able to accurately predict the
future performance of the company.  Rather then, they should investigate the reasons for
the disruptions in cash flow and financing. When it comes to winning strategies, it's
usually the losers who use them.

After six months, you can still make use of the purchase you made.

This is the most basic way to treat investments with respect; nevertheless, there are more
complex approaches available. Making a profit or doing something unique, such as
using cash holdings or incurring expenses, are two way of getting rid of extra money.
The relative importance can be merged with the offerings of other auditors, in addition
to the amount of investment, to maximize the results. TATA MOTORS' March 2021
financial results were released to the public. The entire 2020-21 share value evaluation
is available here.

The TATA Diesel car is in its final stages of development.

• Annualized operating income fell by 0.4 percent (YoY).

• Profits for the company increased by 5% annually over the course of the fiscal year.
Thus, the factor was reduced by almost half in FY21, from 6.5% to 3.7%.
Depreciation costs have risen by 9.9% whilst also lending costs have risen by 11.84% in
the last year.

Year-over-year, both these incomes went up by 24.2%.

• Year-over-year, net profit increased by 18.6%. Profits dropped from 4.2% to 1.4% at
the start of FY20.

%
No. of Months Year 12 Mar- 12 Mar-
Chang
Ending 20* 21*
e

R
2,610,68 2,497,94
Net Sales s -4.3%
0 8
m

R
Other
s 32,704 40,604 24.2%
income
m

R
Total 2,643,38 2,538,55
s -4.0%
Revenues 4 2
m

R
Gross profit s 148,184 171,092 15.5%
m

R
Depreciatio
s 214,254 235,467 9.9%
n
m

R
Interest s 72,433 80,972 11.8%
m
 R
Profit
s -105,800 -104,743 -1.0%
before tax
m

R
543.1
Tax s 3,953 25,419
%
m

R
Profit after
s -109,752 -130,161 18.6%
tax
m

Gross profit
% 5.7 6.8
margin

Effective
% -3.7 -24.3
tax rate

Net profit -5.1

% -4.2
margin

During the FY21, TATA MOTORS produced a working capital of Rs 290

billion, a rise of 8.9% fortnight. TATA MOTORS's working capital analysis
The CFI decreased by Rs -261 trillion dollars in FY21.
The total amount of CFF capital investments from market actors increased by
192% in FY21, reaching Rs 99 million.
There were Rs 132 trillion yuan in net cash flows in FY21, up Rs 31 million in
the prior year.

TATA MOTORS' 2020-21 Cash Flow Statement

 No. of
month 12 12
s %
Particular
Chang
s
Year e
Mar- Mar-
Endin
20 21
g

Cash Flow
from 266,32 290,00
Rs m 8.9%
Operating 9 5
Activities

Cash Flow
- -
from
Rs m 341,70 261,26 -
Investing
2 3
Activities

Cash Flow
from 192.2
Rs m 33,896 99,042
Financing %
Activities

Net Cash - 132,32

Rs m -
Flow 30,920 2

 Following a trailing 12-month period, TATA MOTORS' take-home pay per

contribution (EPS) rate is Rs -34.0, that's the same as the previous year's EPS
rate of Rs 30.5.
 There would be a -7,5x profit benefit ratio at today's value of Inr. 293,0
compared to last year's projected profits.
  Bank's value (P/BV) would rise by 1.5 times at current prices, while the
remunerative ranking would rise by 0.3 times as well.
 The company's current P/CF ratio was just 9.2% of implementation profitability
at the end of the year.

Individual share-based values and data

12 Mar- 12 Mar-
No. of Mths Year Ending
20* 21*

Sales per share

Rs 725.7 652.4
(Unadj.)

TTM Earnings per

Rs -30.5 -34.0
share

Diluted earnings per

Rs -33.1 -39.2
share

Price to Cash Flow x 10.1 9.2

TTM P/E ratio x -8.1 -7.5

Price / Book Value

x 0.9 1.5
ratio

Rs
Market Cap 1,053,881 972,684
m

Dividends per share

Rs 0.0 0.0
(Unadj.)
Concerning Solvency II

 Tata is a company that makes automobiles. To put it another way, the firm's
FY21 ratio went from 0.9x in fiscal year 20 to 0.9x in fiscal year 21. The current
ratio displays short- and intermediate-term obligations.
 Interest rates were raised for the fiscal year from fiscal summer 20 (FY20) to
fiscal season 21 (FY21) (FY21). This ratio, recognized as the interest income to
principal ratio, measures how well a loan can recoup its principal. An
organization's capacity to meet its debt obligations improves as the debt to equity
ratio rises. The ideal situation would be for the ratio to be much higher.
 Ratios of profitability
 Between FY20 and FY21, the earning per share (ROE) for stocks dropped from
17% to 26%. The roi (ROI) of an asset is calculated using the ROI.
 In the 21st budgetary year, earnings increased from -2.3 percent to 1.6 percent. A
company's ROCE can be assessed by looking so at ROCE data, or revert back on
equity and debt investor.
 Compared to FY 20, the return on assets ratio (ROA) for the company was -5
percent in FY 21. The ROI (Rate of Return) digits are used to evaluate the
efficiency of generating revenue.

Key Ratio Analysis

12 Mar- 12 Mar-
No. of Mths Year Ending
20* 21*

Current ratio x 0.9 0.9

Debtors’ Days Days 2 2

Interest coverage x -0.5 -0.3

 Debt to equity ratio x 1.3 1.7

Return on assets % -1.2 -1.5

Return on equity % -17.6 -23.6

Return on capital
% -2.3 -1.6
employed

 VARIABLE INVESTMENT RETURN Cars are made by the Tata PVT LTD
product under license from the company TATA Motors Corporate entity in
Tamil Nadu, India.
 About 182,4% more money was spent, going from Rs. 103.8 to 293.0 in one
year.
 A share of it was heading to be traded for Rs 22.630.9 as of the time of writing
of this article (down 0.7 percent). During the course of one month, they went
from having 16,343.3 to 22,630.9 (up 38.5 percent).
 Per the measure, the Index has risen by 39.6 percent so far this year.

Conclusion

The use of summary statistics can help you grow your business by recognizing your
competitors’ strategies. The information is critical to both your long-term strategy and
your aggressive tactics. As a result, it merits attention. With quality management as the
litmus test, the standard will be raised for all companies to use. The audit function
benefits from performance metrics. You can learn from successful businesses in your
industry by looking at their strategies. It is possible to find comparable standards in
locations of your company where persons excel. It's possible to narrow down the genesis
to a particular time frame.
Q.3 a

Answer
Introduction

It gathers, preserves and examines that financial information so that it can give
stockholders, creditors or authorities truthful data. MacBook testing is sufficient for
these in terms of functions on this platform. An AIS seamlessly blends accounting
standards with contemporary IT tools (GAAP). There are a variety of features and
advantages to having either of these accounts over the others.

 Conventional account and ledger.

 Reliable information sources.
 Use of just one account.

In order to keep things organized, there is an individual record for each of these types of
entities. A debtor account can be exemplified by an individual credit card account. A
nominal account keeps track of all income and expenditure, losses but rather gains for
the large, limited partnership. Nominal accts earn interest. Relatively modest accounts
earn no interest.
Concept and Analysis

Started business with cash Rs150000

Business started with cash Rs 1,50,000

CASH ACCOUNT DR 1,50,000

TO CAPITAL ACCOUNT 1,50,000

(BEING CASH  INTRODUCE  IN BUSINESS)

Accounts Affected:

1.Cash Account

2.Capital Account.

Nature of Accounts:
Cash Account: Real Account;

Capital Account: Personal Account.

Rules of Debit and Credit:

For real accounts: Debit what comes in and credit what goes out.

For personal accounts: Debit the receiver and credit the giver

Applying the Rules:

Debit: Cash Account: Cash comes in business comes in and rules of real account debit what
comes in.

Credit: Capital Account Represent Proprietors account, and here the Proprietors is giver and
rules of personal account credit the giver.

 Purchased goods for cash Rs 25000

PURCHASE A/C DEBIT. 25000

TO CASH A/C..25000

(BEING GOODS PURCHASED THROUGH)

Accounts Affected:

1. Cash Account

2. Purchased Account.

Nature of Accounts:

Cash Account: Real Account;

Purchased Account: Nominal Account.

Rules of Debit and Credit:

For real accounts: Debit what comes in and credit what goes out.

For nominal accounts: Debit all expenses and losses & Credit all gain and income

Applying the Rules:

Debit: Cash Account: purchased o goods is a expenses therefore debit all expenses and losses

Credit: Cash Account: Cash comes in business comes in and rules of real account debit what
comes in.

Sold goods to C on credit Rs 20000

C A/c. Dr. 20000

To Sales A/c 20000

(BEING GOODS SOLD TO C ON CREDIT)

Accounts Affected:

1. Personal Account.

2. Sales Account

Nature of Accounts:

Debtor Account: Personal Account.

Sales Account: Nominal Account;

Rules of Debit and Credit:

For personal accounts: Debit the receiver and credit the giver

For nominal accounts: Debit all expenses and losses & Credit all gain and income

Applying the Rules:

Debit: Personal Account: Debit the receiver since purchased o goods on credit
Credit: Sales Account: Credit all gain and income since goods sold through sales a/c

 Paid salary for cash Rs15000

Salaries. A / c Dr.: 15000

To Cash : 15000

(BEING SALARIED PAID OUT OF CASH)

Accounts Affected:

1. Personal Account.

2. Cash Account

Nature of Accounts:

Salary Account: Personal Account.

Cash Account: Real Account;

Rules of Debit and Credit:

For personal accounts: Debit the receiver and credit the giver

For real accounts: Debit what comes in and credit what goes out.

Applying the Rules:

Debit: Personal Account: Debit the receiver for the receiving the salary

Credit: Real accounts: credit what goes out since payment of salary out of cash

 Deposited cash into the bank account Rs100000

Bank A/c Debit 100000

To Cash A/c 100000

(BEING CASH DEPOSITED TO BANK)

Accounts Affected:

1. Bank Account

2. Cash Account

Nature of Accounts:

Bank Account: Personal Account.

Cash Account: Real Account;

Rules of Debit and Credit:

For personal accounts: Debit the receiver and credit the giver

For real accounts: Debit what comes in and credit what goes out.

Applying the Rules:

Debit: Personal accounts: Debit the receiver and credit the giver since bank receiving the cash
and deposited the same

Credit: Real accounts: Credit what goes out since cash is go out and deposited into bank.

Conclusion

With the Solid gold Professional Accounting Rules, having to decide who should
oversee what account processes is simplified to the maximum extent possible. You can
determine the health of one’s company by looking at the financial statements. Financial
data such as income and inadequacies are all readily available to them. A bank card is
created when the appreciate of an asset rises. Study the possibility of purchasing
commercial real estate as an illustration. It lowers your initial investment while
increasing the long value of your assets. Leveraging your collateral by taking out a loan
diminishes its value considerably. To put it another way, even if the value of your
deferred revenue decreased over time, you would still be wealthy today.
Q.3 b

Answer
Introduction

Legally, businesses must provide accurate and up-to-date information to all relevant
parties. Accurate and current financial data is required to get a full view of a business.
Each aspect of such display must be carefully considered. Financial reporting processes
are needed because financial institutions' strength is increasingly being assessed. Per the
findings of this research, three gold financial measures can be used to ensure the smooth
payments and accurate finance. Starting the billing sheet entry is the first step.
Concept and Analysis

3 GOLDEN RULES OF ACCOUNTING...

PERSONAL  ACCOUNTS

Debit the receiver

Credit the giver

REAL  ACCOUNTS

Debit what comes in

Credit what goes out

NOMINAL  ACCOUNTS

Debit all expenses and losses

Credit all gain and income

Particulars Debit Credit
1. CASH ACCOUNT DR  1,50,000

TO CAPITAL A/C 1,50,000

( BEING CASH INTRODUCE IN BUSINESS )
 2. PURCHASE A/C DR. 25000

TO CASH A/C 25000

(BEING GOODS PURCHASED THROUGH)

3. C A/C. DR. 20000

TO SALES A/C 20000

(BEING GOODS SOLD TO C ON CREDIT)

4. SALARIES. A/C DR.

15000

TO CASH A/C
15000

(BEING SALARIED PAID OUT OF CASH)

5. BANK A/C DR.

TO CASH A/C
100000
(BEING CASH DEPOSITED TO BANK)

100000

Conclusion

Every contract in which a business participates needs to be tracked. A sales ledger must,
however, show any start-up environment. Written reports are a requirement of the
Yellow Accounting Methods. A source of income must first be chosen before any work
can begin. Golden Specialist Accounting Rules is the theory behind this. Like English
letters, these symbols each have a unique meaning. As they converse in English, kids
can pick up on the local accents of their own country. It's better to think at it this reason
than to say that user can't send try to maximize or analyze information if user don't know
basic accrual accounting.
References

Wild, J. (2019). Financial Accounting: Information for Decisions, 9e.

Hines, R. D. (1989). Financial accounting knowledge, conceptual framework projects and the
social construction of the accounting profession. Accounting, Auditing & Accountability
Journal, 2(2), 0-0.

Haller, A. (2002). Financial accounting developments in the European Union: past events and
future prospects. European Accounting Review, 11(1), 153-190.