2798 eee ey . AA mo —r ys Raho analysis DGG NS proses of cde been OG and fret on Kon shits in tearpone wna mument ces! sole ‘ 9 unde chard oe by Computing — robo’ jb ts coed ' joa cher anes Ty the inancial — posstion of the firm An ‘ os we wh ee fo foeos finenciet wysud suck yy pone fidebr lr HY amd gelvens{ 04 yen lig hot ts the naho @ din ms eaho so simply humben Bee ed ay quent paren mical om t then Vk feos yhe, ume : ~ \ ne compound Pcvicvnce metokonship MM ye voounble® whew aeaved = &Y aiding ONS st fs om eeupee S10 hi wis statisheal ween tene_ othe a a into ‘ee ce tatoos bly nto 5 cn mig hh! ann ‘ ly wg or derlor ong? é tuo variable « Pealios yet NG o 7 shot yn we. canctcchimnslebe, think) pekos O4 undemianding jemms of — Poropotions omel quolieg Fepese 4 wn enlseTyres ef eatin’ broadly Beged on (hens reskin , tre mre com : un ot be cluified inte four co mich the Ue? ( : Kos bellow. gatos ame their roo Sif five retos in Ne @ Lauidig retiv — pono fi abut zoho @ werwiry velio @ spyyencyp reo © vewoupe ratio Crorket stroctay rehio) n © — Powhivetar Teo. ~ => Viquidity eke a nen A . Laqurdihy yahO measure Vhe obili ty of @ compen’ a are. cea @ to yep} ie Shoat Aeovn debit ond — vacet re rhe . cosh reeds Then oo a \y ps ® a © carrenk ve ho can) a . a wai Liquidity vohO. C1 G) Quik | 4 j ) . si dite a © pusuivk bs quad 4 Ci.2) nw a gopen wit rerio a « unnent Ho (= o ° | . . eprent it ‘ e ane cewerent roto TS a8 cattle dof . Kivi apie 0 - awe working cepa rao. 04 storing. capital PS & a ake different hI eens Sore NRE cure ASSO fey Carnet Vics) Wed, * a a% AXA aay 4 7» > 4 . a9 7999979399790 27> 9% %»>>? ? wi fo Pu ‘: a COW Ane 1s yao = measures he abiity of SO peny \ C oe y ; ; . cyres ws carrvent obligestons wiry current assets « The ow vedi Ss coe - azotid is calculeted — bY divicling curved! sse by Current Wabititiel . cuyent asset current Raho = NS cuyrent Liabil C xo . a mis TARD Indicates the Comey fret atte Ceeey cssets hear curren) yeah HTS y eck codieutoke Liquid ty patios from Balews shee Se LiobiliiS ge | moun: T Share cop yp0.000 T — _| Pre ENCE coopitedl | 4, 00.000 Aiced asset? £,50,000 stock of Ras weleriy -445D,00 we 190,000 2 i ow Finished pepen tore 4001000 goss joo 000 debtors 100,000 Sunclry coedibons 100,000 gills poy Rank weslance $0,000 SP 000cavrent Asse Curreat Raho = me cuyreat Le wing Curent asset stock OF Rew mekral = 1.sd.600 finished goods = 1180, 000 dle bhors = 1, 00,000 Bank balance > SD,000 Total - 4 100,000 Current Lio iy sundry debts = 4,00 ,0 00 sins papbele = $2,000 pil = 4,530,000 _ snssek current Ratio = ccarrent ASSET cocrrent Hebititg _ A100 ;D0O 1,50, 000 = 2.6tih of = = > Quick F es wo. assed @ b= 1,50,000\ puick Reid = TB Lickititie. uick Assess = Current Pssets— shock = 400,000 — 2,50,000 = 180,000 eR = 1,90 006 ae 1,50 008 FIVIIIFIYI>FODD d 5 > » * >> D> D®> >> DDDAbwluit, lequed Pola = HF iigud #66 HN poy ble Ss sunday urediter sem) = honk pallenee ae ae Lys +iel Loe eee pone 50008 WG 000 — arodly POF 15% ,000 mete = 50,000 go 008 ae 150,000 drowThe folowing 1s an extract of a balance sheet of a company during the last year. Compute current ratio and ack rano Also interpret the ratios. Land and buildings Rs 50,000 Plant and machinery Rs 1.00,000 Furmture and fixtures Rs 25.000 Closing stock Rs 25.000 Sundry debtors Rs 12,800 Wages prepaid Rs 2.500 Sundry creditors Rs 8,000 Rent outstanding Rs 2,000 Satutvom From the above ratios, the current assets include: closing stock. sundry debtors and wages prepaid. The total of the curren! assets 1s Rs Closing stock 25,000 Sundry debtors 12.500 Wages prepaid 2.500 Total 40,000—— 14.20 Managenal Economics and Financial Anatysss ‘The current liabilities are Sundry creditors Rs 8.000 and Rent outstanding Rs 2000. The total of current habilines ts Rs 10,000. Current ratio = Current assets current liabilities }0,000/10,000 LL Thus means for every one rupee of current liability. there is a coverage of ‘four rupees’ of current asses ‘The standard for current ratio 1s 2:1. As against this, the liquidity of the company 1s satisfactory ‘The liquidity factor can further be verified based on the most liquid or quick assets and liabilities which 38 called quick rano. Quick ratio = Quick assets/Current liabilities Quick assets = Current assets ~ (Stock + Prepaid wages) 10,000 ~ (25.000 + 2.500) As against the standard of quick ratio of 1:1, the liquidity performance of the above company is satusfactory Exercise2 Inventory turnover Ratio The following data 1s extracted from the financial statements of a firm dealing in fertilisers. The fertiliser business, in general, has an inventory ratio of 6 times Determine and interpret the following ratios (a) Inventory turnover ratio () Average period of holding the stocks Sundry debtors Rs 45.000 Closing stock Rs 30,000 Sates Rs 4,00,000 Sales returns Rs 20,000 Stock as on 1 1.2013 Rs 40.000 Stock as on 31.12.2013 Rs 60.000 ‘Ue of the sates are credit sales : Solution Net sales = Salec — Gata b.pevevvuvwvuwe~ a oo & > s (2), => fos Liysin nese Awe bqued Belle Lipid BOR | pieg vaste, + lina aece dt annonte erodly poy 40 cot [bee j 5 Pray ble s0,b06 sacl] toedibon's 100,005 wi) . 1190000 hawt palleace = $0,000 hie ot gy Hoo 1,50,D00 oh Peo-fiebilit] ao¥ios 6 aes pol debality nalios — so? \ghe 8 Yow wield she Sires Ys ongonien i's oc WA mo Pao Hebe er NEE jhe. owHEMS enpee! op vsone We owe of neuen weiY ypvustenent The firm snout queen eno pao ke wok omy YP weet \ne pupeche tors of Ww owner's wk also ie Finance \he e wpe sion ackvind. the fotlowting ane lhe cighs eqor¥o8 ot) Cosma aed rw ever Protilebili tq mn Gy ponlid colo Ned pow fis lio coWio opershi™4Ceor) (om Rehow on investment G Reh On cogttel e mph cel Gi) Retna on ogee | | | (8) gacwimgs Feet shave CERS) G) —pwielend «yield w price} eacinings —-7echo C ple restio) iS) enowing Power = * . x . => Gross Profit paxtdD = [Frain : ee } pte Ys He ratio bn press prefick emoss — poekit rev expressect 19 res qo gal USING qe pecniod terms — of pecicen tery © Gras profit is the differnet and the cack of genes OH bln dhe ned sald x100 Gross profit ee ‘ oud Gost yet sales IS 5D,000 doy ow firm poviet © suppose of — goo Pay ea The 4788 prott rerko Ss calealated ot bellow. a yet sales = $0,000 goods Sold = 90,000 of jhe. geo’ Soh | Guess profile soled — Cast = Sb,000 - 20,000 — = 30006 soley PIPPI PrennwnanTs ~ > = 30,000 ine OpR= —~—— x100 $0,000 re = bo pecrcoak a heey ‘ 7 of mn we ollea wos. boy of ig sues is He TY ame rm. ~~ -S" Net profit Raho: net fant r . ped porobrt —-xextiO Fs the eho bln net Prehté ede ~ jens ond vet Saleh TE ineticateg what portion of— a gale TS tee to ownens hte operating vps a , e34 went - Won — peering incane such oF iwteensah inves sens " a ver pote ober eS poht ratio = x10 net Sales vl | | o tire nel COE T _Problew a —* suppose tke net “salts FS SD1D00 Pose a of qo old Ts eS aoje00 - The details of up en Sess OE 2 og gen below: 3 ata min chron eupenses es 2000 SeMing ond edtskribuher 2x7 *3 4000 Loss on Saleh of fue assed PS S000 autunet ow inverheent 28 200 “Tas 90%\ é ampurtection of Net powlits = sr ome ¢ ~ Ww Gn), Cos, soled 0/000 uy Less cork of goods solet 40,000 Om, 40,006 tony, Gawss profit ms Less adwinistaction — empensels 40/00 eo : 000 om senting amd PITT: exper Roos se nek Prohit 22,000 and 200 ~ Add THlETES on inves ment =~ own opecrecting incon) 2 000 ming C4006 Cu, Leys, Less on Seded of Asselt ._~ Sy, 2100 my goths an100 Cees ew ero HE Tes Anes « wea profit _Mer800 wo Qu Seo000 as © = aah fos . Ss * The ignest ake ne potolit velio “ me bin Ts HE potiteliliy oo" vice — ves at “ Wes goto card uses os weeny of “Ss overvcalh pero fitada 4] a shuld be US cl long ,T apodeme with operating aon toe YIP prea pave bane x 4 Palo oe = openehnd — 7 i echio YS ake acti by cost Df Joody apenood vee ra opeaeting — F*Pe wees crt the HEY awlep golds a is cup vessed cs O pooreenbege Jo oned er 5 ald aepeeing cnctio. “the puey Ps the, Whe Vighey the pot jelly hy aud vice VEOscy pear ting - openeting £™ ensed fea yale ——— alieee 10D wet sales ob goods sol + adminis re BVe enferss Opeorerh ng pest - ash | gelling, at olice ond cajstritesto and ymomnegemnesh & diminishes tt pupensess coves wpe cach cates office went, pnguvernce « dive i 1 he tee eget gypensedy gud 80. geting ont digi buted ti geupenset meted a asi sjo sales svat advertising 7 yyeae MN exposes cast ot soon p lh oud so 0) net sallS = sales ees | ster veers In andor pye ng apeateshng yoho Ake poss ily wt of vonicetioy te ad gen fees ox company *S comer} aue chon] © in powers should be consele ved Pol Jedi cn. Goo- opectesting xan TH) gored gpen eS © 3, 218) 000 re Preceded AG, 000 cpateent epee 425,000 pes sete mage, 000 aynasen = 95,0 11g,p00 no eS BOD ote ey AAS 00 ©| = Cress profit — office ond cetwins Profit eertiO = opererting Cuperus — selling ond divhibubiey prvi — Expense) Sales 61D sale Retuns 1,500 cst of sels ex eto office ond tdwin gape SRO 2,24 wad AISEILY expe, 20m in fon debeatey 73,400 Los by Jive PuswO Paroen invests SEAOD Saliny & Trane tres D pee 221SDO— 2,25D—3, 700 z eet erect — x10d 601000 = Hs] piet salad — Cash of Sal-ey eee eet 1,0 — 1sd0) =F, KO f €ées p é@ € ppp PPP PE PH bleed »>bb4 yp J) DDD P. Pp Se bbbwahich grevealS factory mcosune of pan babill hfe e @ ae ° = e, e Keka on inva ment Cror) 3 e e Feb on inveatwent Ts one ot phe VOrty important . pearneker a Hectng Lusineds plans The pane i bes ill Vee a Bee ty we tered 8 femmes. of veka 07 IY ' ROL « ney prokt ation Tete S, . feted mveldnent a GW) Redunn on copite! emproyed CROCE) | 2 fewer ene » ats Tso widely used cata. THis ts the rly > ae overall pearforr mon > » » » ' of o fn in yen S Roce = Ctajucled net pois] copitel employee) Gi) Reman on eal Cot) , rem a ijlable * aan ' ai eres THE protig ovnilabl ene: 4 Jrern The igen ; sho eholdent yo the amount inmates \ ° mwrcd yee eons! ; ne roe iy the mone Te ve postawiting ov ae Ro€ Cnet pret - dividends 40 preference Shorhel caach Shave Capt fa} * Com porn ats toting, 75 Competed Lait thet 0b othe ame canily chosw nol de Com eke & decision to Swick one Camporny 40 the othen by selling oun fae shosmeh Losed on His yoHio theHf fT SS ed Hd Q AG Mt Ute used ratid. TRS satislacery measune rich gevealg he NEN of a dine in 7M ch pep btabili*y Roce = Ctajusied vet peeks] copitel expisyes) (Gi) Rema on eaty CRoe) Sa oveilable 7 comity she net | Shun The wiqhey te aris yeledes poh erolders to *hE amount jas &Y fs the prettability ond Ap Prefemencé Shovthe . a vice varia she ROE 4s Abe mone Roe = Cnet en kit _ dividends gaurhy shave copie) oto Ts Compored with Shed ob othe Compania Tris Te comity shame hel det Com take a decisim fo Suich gen tow OFF Compo 40 the otten by selling the Shared bued om His yoHo. Rol ye = OF MEME = Break Evy re yu by AM sete ARE Ne CHATO we pred gt fs the Break cyte ine ts* 3 we ane adjust net peroite yeten 40 < : = any abncitmal or non reusing \ossel ot goons fa wr ce of He &> depreciation bused oY yeplaceme od us ossers > i i Iside the wusinels = income — hyo mm investment CS e i es WHS indeciest on leng- dea Webill ee ne ny ~~; {fe ise be cxdeled bela cansistencs J) e a ume tot [aveeds 4ake net prot} beh ~~) inom tox] ~~} wy a net Capit! puployed yefers to the detal of © eid UP Showe copitel 7 © pegenvect Cbeth copitel oma revenue wegen) “7 © pepentung HE OM: ~F ; eS 2 a ” bed guy | sell sites 4 200000 in stock f Envestment » n a you a * yous cae So Yor oa uted a Cory 1,0000 RY. fd bough gotd the car for 160000 profit wrt 60,000 2 - oe % wet { (hot ow . wed tke reluan on your! Inveabrnent 9 bj 66S, Roy 2 yoo = bot, 1, Dooay ' £x-@) yor invertect @ 000) PS, one youn later, 501d the stock fey, 09.000, You wer prodit 60,000 ee a fonmuta, you: see That > > \nveshuem + petopn on Havedtynew) wed Oo nen gol, > Thivty Peacent > Por - 60h x wo = apy > 2,06 Oo 1 p er'=® wy > ¢ A TH Yor bey a peuse fey P# 240000 y = Tan wn , 7 7 4 sett Vk te \qoooo , you NE ertt] y Less > 60,000. Rg i - bo gg (60009 xo = ~ B87. ? \§0.000 220009 , ,, f Ze 0 y s= canmings fer shame ¢ ers) i= qetetionbip bly net Pano file and the EE AAG, eps ts Whe amber of Shad outstanding ot the ena of he gies pemiod. NS can be compared — arth pneiows Years to pole a basis on aceessiny he, compar Pea formance Je Cuetpaehit doves] Nember of shomes ostsloirg a Gen te wumbesy of Shamed 10,000 and they profit Aaved fon ce gives accounting — pemiod ts 4.S1000 KS lle Eps be casleatlated oF foieuss: Given thet number ef Shaned= — 10,000/— profil Faned = 41SD00 EF were Gia dened S = os - " We Shave cutstenslings RRAFIAIAS PLES EY EG - 4150000 . 10,000 wo - 4 “7 a wy Tre hi : ghen Ma eps We Ake noses tS Hike to be He denied iad fon flee shane of 1 ad Ht Conapornry- owen, WH p Wo 4o be noted thal eps Ps one ch hen emf fxctons effecting de deme fury A FV hore. (LALA IL, pa Dividend yield te yield nefesm® to dhe amount oh doted edn Boe invasion 9 EEN for om given pecrion of Hime, foy Ae comound of iS anvertinent pividenst yee ore feos to the pearecoterg® ae rk vs calculoded of Bren pad for Shoes om te price ee tlous + puidend yield = my weal price of dhe shoe annum | : manveet price of & shame eS NII IIT IIIT Bem Ginen that curvent Apo, face value of the. shone *S P5300, pencembage of oye divider declared Fe aor then yield is aan vane — PUNE of a Shane FS 400 ~> “y face valve of the Shatte F830 &. 7 | x percentoye ot divebnt = 207 pivident yield = aay XY ~ GT perepor Avenel ~ Ta gomevel, Yield owel otis o-sie inveateny te geld se flecks then words, abe higheor Tv. that the invatwem — odte —aiiskiadh = oad The lowed) < lowie? the qt Sufea are Le invedmenls, | , ? ? 2 ? ? ? ? &ee Price} canning Ratio . agming Ta | Price earn} gato divided by en aoe { Hanked poice Pee shane | jpmice | eon Raho = ——— 5, .0e.. | - 1 es per shoot } et Given that meaiked PONCE of ashane PS PI BHO . ona eps fs IP calculate PIE atio ? wed panice PET Shane ae, weet Ple = canning peor She eps= St 10 = se =e = camming power neko moto at a measure of overred anh at hi quan IPR Yous) price 4B = power "HET EP PPPs ba PPPs sae. essing profitebilty of fam Com sell Smeal pace or teage quantal ct elavely a Uninet be making prohits Qo ca ete words fle casing powet of the > a | lowpom Ts aed on jwo fac toms = wer ned probit margin ond a te) Hea invetbment —Reinnec) a iF ~ a> ~ abwww VY Ye = se h[!hOUSYD ¥ * x . These factors doqetan effechveness Of He firm's of metew persent nm Come je pictune of e epesiations on investment Cee) The Pedcentoge the fms cpecesting ef fiency Rol mefiecd foc and ik 1S He poeduct of nes poet mang”) aud invedn ent unnaed) . gacning Powe) = Rehan on investineat eet profit margin Tavestaet seme eS) perprbit afk sony self oP = sale) ote Capita) p ever Profit oFen ond |e = Total capita) assets or pene the oll capital () equity shasie capita) The following Exanple of ecu niing power). vey mean fe tote justredieny, ake cenceptAcKy petiag t= hetivedy Reiag fo a | AeH ay clivity ratios E*pTESS hows ackve dee firm as tH al seams oF selling HS socks, collectings je receienbles rel = pening Hs couealitor - Thete ane three HS a Coe Reatio . ex! ~, @® debtors Tusreves cad « ral @ _—careditor's Humvover Resto. a) SS ey peti, ~| a tt is ney ees Ge stock qunnoveg Th. ow! pt Ps indicerkes _ op ximet The average ee ed gd desing gen accounting =| puniod. re fs eptablished dhe. ne lorio bly the = cost of 2 srl ausing = % qiven peniod ond the 2] : di cs caerenge camount of ynventovY ouetstan ing deen | tha peniod. The: high Ake inverse feomeeV | woko +he beth Fs the. peordow meme of dhe a | bal . | erties cual ws Stocks : calcestel c& given BETO. e costot ee | averonge. inverts: sel-averege inventory | qe inventor] 1S the —cwerrage oF opening gtk at He Leginnl be spinning of the year ama the closing stock ct the end of the gear, the #5 4 A higher inventor] juomoves vero. implied the chaety ob ee Him aa ee invenbYY gumovet aehD yndicatep thet ake ym Ty rok & positon jo Cleo’ Res shock. rom inventet} quo ver wetio , WE CO also holding penitd. Dt RS devamine he ynventory bellow. actenmned os giver aiding remiod = abs days | Tnvemeny TE Sayen0™4}of opening Steck aveveqe inventory jg the cueaege et Ae ginnin 4 beginning of athe yee cama the closing ae Oe ee On te yeoar , thet as were é Sloe k = z = A Wighey inventory — tucthowe® yetio implis the. et hdesy . 8 ok the Hm wheres Jos inventor] gaamover THD ut cov andicaks thet how Ts woh position a qs lok. from inventot} guano ver" sotio WE CO also ji i ectidd 4 tS } Ae 8 ee mnventery OTA P az acannes 9 given Lele WwW es £00,000 ond Salas. The inventory | wed RE 1b,00d ond a sold goods work profit qe 20 percent of qross ey be gin ee Ves deca or ond of He yoo war Wy 000 compute Tw _ fumnove vroho ond also the. inven tory helding, period=> cadicutation of Thven tory uarnover ratio TO ; b caticalited —Taventery — dusinovest Ta HO, we need Hw WS of goods Sold aud avenage Shek fost of goods Sold = Saleg — Gross Pr fit. Gross pofil= Qo, of Seleg vere SII IIS IIIFIE ive PS 1,00, d0d , cost of qecds Sold = 5 Sjo0,000 — 1,00,006 4 100,000 v LPS " = shventage inventory = C1b,000 + 41000 a ee yore roe) /9, = 13,000 oto = Wstot geods sokl averag © ny 4 100,000 Sua Daven tory dwsnnovet 15,000 = gb. bb st = aris meoms kat chasing Fhe year , he eremerge LAALAAALALAL AAS wdoule ts being joj 16. 66 -Fiwe?. ene i eniod. a =o Tavertory polding =P Tavemaney 3AY novest tin - 3 = 26. bb Qo = Wd 64 AayS SS SS = Mp days approntmetely, o =— cGo) SS Deltoy's Awe ven pedio [= Debtors, Lunnoveerr reid qeyels the number ef timed the atarage deblors ae cauected lucy give" ac cainteny period. Tn other words, it chows mors gusik lf he fim isin oe position te caltlect HS delis. refs neceesooty ro Freep closingy mont teoning of selisation of clebH be cae it divec Hy oe fhect lke woking capital pest Hon peptor's Tusthovesd Ratio iS calculated as given bellow Gedit sale pebters ebumnove -yato= Z i oe wheoe cared E les zefer goods sold on Credit avero4e celles is Me ovevege of cpening od lasing palancel of deblovS for te gen acceumting peciica ¥ A hight debtors quommove? gato explein Peat tHe firm 18 efficient callechng 16 debte wheres locey ayetio signifies its med ftcieney pebt callection end MM pebt — Callechion peoriod ve Pent fe the time taken j to catlechon the debt from dlebter'S qumnoven —-vertio. | ye con find 08 the debt cellec hon peatiod folds few calleclon pesiod = sbs[dep) ! Ane vessel the Hime , WOME dhe efficieney of tle ry gud vile vease, awe/ “\ feet wos PS 40.00/00 fe cluning the Year A fiyw's Salted at which Go pencentage — wene O° cmeatit esis The ble. tame ob na See ae fhe beginning om 4 ema of The te7 WEN 25,000 aud 15000 respectively + calculabre debton'S Bra our debe of the firm AIS JIIIIT IFAS: uanove Yeti Collec Hon period a Given Peck sevey desing Set 24m ond bor, Gay be gianingy dobiens = 25;000 — “. ending af -Awoust = 15,000 = ’ coreditsales= beh” of 421000 a = 2, 40)000 “ debtens = Coren Lalance of debhors ¢cebp) « J ae Avene el = Copy a yD a (95,000 + 15,000 ) Jo a a = 20,000 2 = ae Calculation of deblor's ustnove\ rrotio = pro C00) 20,000 a = Wabeet oS 8 Le firm fs collecting ils avene"fe oes ny je Himed dusting the gives accountng Pertiod clebE af callection peaiod nS 36ST ~ = depts teernovert ver cue = 3 no a4 sae ~? oly = aud + 30-41 ey ~~ colece 143 cebts. arvw ere re rererd ie eid Felli id CU L SE ve ai tons teaomnoveor wnber of Himes coredilens dusmover ratio. reversis. thee tt Mee average — corweditong acre peri cing oe ge cxccounting peaiod Tn othe) words. 1k Shows how poem jhe fy fv inc position te pay its Samer ae do Keee close monitoring of payment che led betauye jh dinectly abt bers dhe — worteng copitl position | In case , the firm ie nob in co position to PY its creditors. ie wil affect the qood will cy antes supplits moy ye cetolf. Tm be on safe side, mess of ean gnaintain the ged lick of dhe cored bons whien Porove des phe detail’ ot when to poof) Now wauch Lo pay onde how oe cowed ctaomoves yeh as caletlaled 0 qin Lellowe ee a a pio = cea puncheses | Avered® crude) : Iso je fecrmnine Ye cnedrtoms Feu weal From wis, we om also ¢ period bY using fle given formal=> capited sho clume Reco C Leverage, peas | solvency ) ww eee nea copilal — stauclude 0% leverage natio Is difined OF plies focussed Mhe ong = 4 IIIS ake — finemcial ako, Solvemee of ake fam, tre long — 2 solvency of tee go sli ek “ Berm Fs wey neflected in ays ofaltty Ao me — ” ot vs lone Jem Commi YaentS uch oS poy ene ~"] \ of paincieg, e injemes® peciodicallyy without jail) nepagnen® . en abe = wf ew = eco ; long 321 = Ay tke nancial jngh wohons ote ong 4 = | Finance OF yniesested qhese. — reehOS ~ oe are folowing ore HE vst Commonly ses cose) al grouctune — Mei0S- = : ’ cay debb- eaulty eotio > e@. redtio Ss == Cy Intemest ONETEN (ce) Redo of propaiekerS — fumds Av Aedeal “= i cy Ralin of fined —-AGEAS funds cunsent ASE Proprietors ed Ga Recto of VAL LPPwrwrend ted did id id id Tel LTS SIL (ey cebh eputey (coe) Sab) ce, Debt — eqyutty — seco the oho bin sqstsidestS, fonds CacbY) and — insider's funds Cequity) This % used 4 neeser the firm's obligesVions_ 4° coeditoms = iM acelesiod yo the, owner's funds, ork fs tke mensene of seventy ordain for this taio. ty Ta them woonds, for ove qupecd of debt » thence a qupec worth entecmed —- funds er xml = ere ee eee nerf cece cheoa catios eeensing Upon the industry , the: standard for Wwe debt - equity stato. diffens. fey instances in cose Of capita intensive industry uch OS Shipping Companies oy steel mewn teciesing eis etn ee can be Wgh 20H SE His FRO ey cee Pe tae cansaecing matin Of industy, cond Coup eri torts ple yveho caaculaled os follows pebt — equily ratiodebentures 5 bonds , — Debl ov outs deen’s Yong, — eon Yorwns, cond $0) ON shomehold en's und oF 24h pareter ence ond ey Cooth easnings = = funds include ume copie hee Includes MESenve Cot genere! ama speci He) ane tained son Cait amd such — others equity docs wok ony y ¢ On vel 0° “ Shane capital wily rece _imten_pactet a def — 7 we \ mets = funds + Geb? nene qnvcnte OT ong ~ “| ae —t gnanple PrObIEM = : eee ‘ Cal culated debt- eunih ako drom pe auto qe = fn grow © = dums fers = gre following §— OV he vk side's - pebentames — 2000 ) Leng Yea Yor gjooroce NN = out sidea's = debentures + long dea \owry Sey = j-00000 + 200/000 al . = equity ot Tas’ fonds b,00000 = wy a Pare teorenel Shore capital 1,00 000 mail Shore | ) ol copitel 1,000 , General Reseave 2801000, pow coed VO al pecous® 109 00D ea oI “= bony jenn peot = pset ese 4 OR PA) — a = 100,000 1 S01000 F sa agoyoon + 400,009 5 = yagooo = deb x = Se oevebl equity -ralio deb} equity b,00, 000 6,00, 000 ~ WwW hed for event fond ef Fel Debt ° equity ahd of 1) meas toc of debk , Were oo equity ot vt Tis TS whic which mals the Stand Sgaelck guile Salisfactenyy- be in >» Tn tenes? Coverage Rako 8= ee oF | calculated — 40 HABE ake | Tateney — covenage ratio Ts debt it bored pay the interest capacity Avo dhe firm's eaanin gs Firms of Ake extent qe gwes Bo idee net} Contract before if fs unable te rey interes pag ment put ok current eacwings - Tt ge very import} make for the financial jnctitation 0 jud ge the exbinity to seayice. he toms Worn othe Comat ch abe boven are ats, EHeQ 14 FS ih Yyeeors por hits The highta othe vod , a higheo gestio implied hat the company nos no Problem ™M poying interned | Ln tenes Cove ncq® veto PS calculated oS follows ou / net profit beter Wier gd) eee amar Sy anveost Coveney? —_ __idpebl Debt ecunity 1,00 of debh , which —-maks, quite — salista , Pb Intemest Tnlenrest Coven eee Giemis — copancttey Te gwus pA i wowp Contract pagment — out gato foy the of the borrower Years pono fits thes vse, hes no Tn kenes* follows’ raveoot equity yolio= = b,00 6,00 =" valid of V0 Here fs OM athe Slanduod clony - covenage Ratio ae ae ratio 8 4D dec before, ok current Rinancied ing dition of Abe pay the: in heenest extent the Fire's if is do seaice The a higher Powblem Covererg® Coverage highea gestio pesy ing Ralio = eammings .Tt 7 rato Ps debt equity 1000 1000 gens Meet tor every equity fund of rely qamastick of Whe sis tS 8= celeulaled 40 Iudge ake eannin es unabe to PY interes is Xo jud ge jhe loon from He curren jhe redo, «= bee) ve TS implies frock the. Company interest. calculated oS et parofit bet mies ge on debb iF oro! very impose she exbi lity | >) fined jodenest ergs ypof Himes of conerreagpe, Ae a om — The vane Ae wb O° wer betlea ig the Solvency posi on op the porrowey , En owe esonings be fow ipdenest od F078 cenit) of x Compony Ts RS 5560/0900 ri's fired Commi Fmen te nude q mmyront of OP ooo debentures of Rs oo each Tt a Rs subject 40 jor of 30k pam emma ‘ calculate wnlemres — Coveeneng € pad — . A toutes nek paofit before interest ores = 5, b0,000 = fized —inlennest changes 0 jhe debentosres _ 6 = (Apex 100) KIOy. - e = 0,000. cen! _ = Tatenest coerege siestiD = (5,60,000] 40,000) “ . S = BHimes = — Toke’ coweouge veh. of B HmG_—_ Means that the ws pet phe earning ote Hes fo the fined imtordte ducing — Ake Yee 7 chengs — Payble The mone the Wumleg of climes the Coverage dhe Safoor Py The mvedtinent« @iclencling — finances 40 a NeNe a! SS eo net — Profit — Coveating no Blimey of its Binea Changes 6 Ts a Safe SS ~ Such @ — compomny Je ting bet for ew the cm lencleo). < SS’ Se? aeS — Ral Ret ot por paic bom's unds to tech Dae —~ to tutor assetf ay € Vc 6 establishes eyevation ship OM paopaieter's the ole assets. wee» TE fore) assets funds cand Indu de Ake Jawgble S$yncd assek pus current ask. As quidelines oo eho of anwurnd 0 S¢t oy SUL is cnsidoned os the amin nu desivable. IM otheg caggels | Oe owned bY | words, halt of tHe Langible pwhers and wale BY the — ondinai shame holder's On contailacloas of other Ayres of Shee ond loan capity om : by canedi tom's. Ta tangible assets such aS qoodwit aoe nok considea PEEVE pecaste ih Mee be sold off feacibly , goodwill wer sig ghowy that the Pomdhie— business has +o nok be of ony woo —AD hove Solid siake 1 Ake ogqanisaton Jolal ASSek tod Assets = jo tote! ————————— polio of — Pnopnictons funds ee, otal ASSeAS MIO IE ea compute reli of paopaie a's funds to tote) apscete tem the dots give 18 example. Sol. the mato of ropaieton's funds Jy tote) Za Computed assets con be as follows,funds = 7,00,000 FS total Assck8= 15/02, 00 Pro parictoa's Pre ference Shere capital = 1400/00 equity chase Caplal= 'sbICeD JIJIZISZS caenencl yesenve = 2-.$0)000 emo loye® parovictent -fund = 700,000 rgb accounts 7,00, 000 =,00,000 to retin of Pampsietes ands fo data ASS = Fingaletens ted tots) asses Sy XI Say = -3,00,000 15,00, 000 X100 — = oe 4b, bb 7 “se = oy Ti ROEM en enn ok eee eee = gare — financed yp paopsieter's — fumds. Tn pihern Words Suny le bala nee C53 ap%) PS Financed — by cutsisley S funds . Justo) — Eapleimed in @ fine WY LPL LITT > ths ratio is ot fnect cesses omel - = fands sepanatlyy Song = oy consi deing- phe volume Cansient meeps ona poops tom'sa | ©) pe Rolo of fired fo Powpane tom Raney ee TRS vertigo — Faplewns whe theor the Pivea Assets thave. bee Wrought) Pye Ake paepnitters ands er nel, bY wr eetchiing ie tong Here ives tment wath the tong fern Finance, TH TS possible do defeammine whe tien We vorrawing Wet bees wade do tinence fived —-Assel rt is vat sofe FO long te Asset be yaped thee wen connote be retily use Sherk ley finance. Fo by boca when the — borrowing TS te be a problem og the fixed Assets into Cosh The long — term gounces of Finance Canven ted assets bub 0 Cagynent for buy ing soumees of finance Can be used be utilised be com Sh — tery ceive fined assets ey ace the pene Come ok propnietet isy in dustn eae lecrea Up in fixed assed Homme Avy in Mais Cam be nopnicdet esiablithe mens or of ° Sones, Ratio of fired —-tssele to Paroprielor’s funds Pived Assets ———— 100 Paro prtedor’s fendExi— Compute yatio of fixed asset? 40 Propsietom's Bands -trom the deta que In Exowmple. one setpyis funds Ie fived ASE1 ane = S:75;000 ond PaoparictOr 100,000 Paty of ived ASsete — pomprieres 7, SRARAAAARY seh Given heck ined ASE = 57 45,000 , papprictea's fumas= ao 4 fired ASCH e ietor'S funds = Rekio of fixed Asses fo FenopemMe ef a SAG 000 Se X00 00,000 & | = = ran | Gon sid exing Aket this is indusknied establighment ary Fs on very Wngh sid@. A large — pombion of prwpaietey funds FS Ubcked in fined ASSES. This mat a desinble. Redo of cuvrent -asserg to PROP HVelore funds t= | a ee ee ease | KO Wighesy soto of «= current asse8 te poopnietoxe funds fe Gengidered of -finomcital Strenght he the, besineas TE necetiory to old adequate — flundd im wearing Capital to genernte — prelite TMs Caliculated — S_ followS -— Rutio of current ages to pop 2 Ome assets propricted Funds X19 DADA RDNDLDMMD MDD DDH MHEK ommple. itor S compule atio of current assets 48 ero pater Bumds Prem he dakar given in exemple Cannent *58e8F A,2¢,000 PS Propoieh § funds = 100/000 | Carrent A550 - Ratio of Curren se fo PE 2 oes FT papier Fons > ° APT }00O oy 2 00,000 ° = 12, » ——— » - ~ ~ -? 7 \ wsPopes ruts ry Ps im) 425000 4 = —1— Keb Pe {00,000 J paren, = 2 I y= a Pre earg Pour of Hiems pant © oF ry — Pom OF EE a Pe Anne ane wo Hms pond & each noire etal asses ry worth — ag qiooon0 and overage ner — pn0FtS of apy He 4 > fs gvoon euch: -Hown P hes sales of RS 1oo)000 and Hom o [> ws sala of Ps 10,00/000 —o easing He powe?) “3 of both — firms. OF sl = som P 5 a net sale ,00,000 7 10,00 0007. -) bo | ce encht 20) 0007. 90,0007. 2? ec Total fssele 400 000. 400/ 0007, a leowgsd meg" (la) Q0/. - pie casket rumnanet Cole)| 0-257) u oo Bl per veto Cd'e? S as Hee 2 : sy, J al Jud TS advunte . : Above table i jantoge of higher Volume When soit — wnwsngin TS 7 s ob Sel en 4 fs so WW yw Pp Gud ini ot to Wut 7 : a saeye —similod ot firm despite lower 4 volume oF Sul pecese the paokit morgin is highspaofit oF ype ton E sation she performances of Say whole. TE Fs a f thot Com be, => Depeak hash 3 Se eae A connings Sy pew fewe been — bulk into the follower} nok bY nu~ Sy Du pont — Compe oy the time cna were FH calle) = pupent Chaat - . ~ Sk can be seen thet the excTning power 5 ~—> dependent on weeny Vostables — ANY change in tae = face's vill a RRect the casings poe xh te selliny ey price imemestes, ik will imonedte the powfit ond tte Cary verse. Th the cast of goods sad inunease. te prokt => margin deine) The Corning pow will improve Coty —> beth inemende ~y Pal if tuanover oy net ao an eoawing Poured ComPore evaluate oma A ued #0 aepontnents os viel of dhe Pin 8 a Valuable rool fur inten fives compeatison also. { Fe venta ales |nvermar| ome — ee al cates lnvedmer| __ J venting copit (fe " \ | won Gervent asic autre’ by Say? | Sw? al i if ome ea0ks meng Jags, [ease sF gooas MS - sold bniitations of Rakio — thellyStS = NS ee SRA cenedysis, elespite: We wide exppticections, * not free hmiderins, + CG) Accounting salias ome axelrospe nine = ' “ ~ b data of she rekos ome compuled based 00 tho Pas volt qe necessacilY , " ppevious performance The] 7m nok : . pojections b the fakaie and nay nok be helpful ™ making powjectio ; te fete , eat = ome vor & : » 22 Recouting yattbads , policies ee qrocedunes SE ou ~~ ted —-followi aipgerenh haste accounting — dete ge qenentotte 4 : deporeciedi , accountng mmepheds Csach 8 different wmethads oF 4°? ay yom metheds of valving lest] glock following fifo ov L\Fo) , the cxatd ane nok shnicly comporrble. The dibfeorence , gn the acceunting — methods 0% poticies A} yead te : distored Con clusions. 1G) Trfletiona4 Jendencied cannot ke vrighlighted = ; ta times OF jnflotion, the accounting — deter of severtey of such kite, Any omaly sis meaning fal ; year cannot be comported ' based On srechos conndk be om concepts ob EE ene wor the Same Besed 07 the needs of the fiym , the roti ane formu been different, Tntente, Lute upon - The Comparison conyot be weeilishie | 1n such & Case, 2 gualitehve _foclors cammoth ben omsisemed y= ho OS RE ee Patorg 9 i euch 08 Cheveebesy or monagesiial — etvili Bes or ve considered, hone . TL TS because Ralid conalysis Fs a cpus] re omy Hice ols Puset pucenbitedtive. i to. " itectiv aly Hicel 5@) Reel ; Ratio by isa nos mo UEWY t= Roctio: etioy to be — meaniyful have +o be swad along with Ele othe ec) Ice io 7. ecb, “Awe singl® oectio 1S mmenning le55 by Téseifp. & . Ratios tan be mesipeltes = goed Jusnovee) iods . TL Dueii : ing festive §— Sedo , there vill be of stocks - 7 when Companed do the: eaalioy pest cr inventory — tucinover outo fs congidenett doy decision waking — tLe megull8 get distoved , © Pacts weskening xwelio sees = a the ecnomy deer. identifying the vigh tyre indeapreretion oma so forth Yrecten the whl Sadden Cheang 08 Such at economic unis, lack ook uniform of ratio fox omaty sis omd one Some: of te actor's thet ot raho cone ly sb jo ve @ powerful Aeol fa ocho aonslysis con ues aameaipst omd compassion of {nancial sed ment? :> - Mands flow Analy SIS Gor —— Neewing ef Randy ‘e By the teow Funds. WE qeneoualy mec 4 { dhe pamt of vie of ccceoumlants amd finan, rene c copied “punas? mean woolking copia on rel working opr chabement hen Wer In the contd of fumis flO sale when pital ont use teeta: ae mmecans OTENNY cops r Current asset — cuvyent vied ied neo cue a curvent Assets oe a current tl DM cosh in hand Reon = Mei hed, | @ Bew © cosh ed bank rk In oven bref © Sunde © sails metrevele. Jry Cerwel bors oe Dans poy ble @ sundry debtors © pomcererble | Jexmporery | inv entoren AS @ pwidends — poystle 1 © €)— oulstanding — eepen seg hor) Heowa) rowed Peyoble (Advances Cs @ inventory of @® — provigon fe nail ¥ Vee hoy goods Work aw | © Prot » | no Pisin ; KM pegs | ay for Ai viciemag preaud Wee HON | © prepaid eps itoine closing Mneayned come paced cag, bel fer gensry furdfioe ctedemnes statement 2 statement of elenges in weyeing capital an Impanted of Pere” eS: Main xmpomiene ae 6 aqpes : BR DO Financial Comseaene © Firesncie’ palcies | divident Py © Aentin! vudgt © pants owt ak financial pesitent “1 © Kemkess | coders © sess of funds ST I Xs i jatew ent [= or S prepasetion oh Fura How sinter Py pmemnes He FES 3 tyes! Pe TY OD sktemest ter schedule) of chenges im OMEN «t+ “ry copite) “Te r ® funds Prom opectahon C Peb aye) “TY @ funds flow stetement 5 @& state of sounces ond aplication ot Punds = 2b ° se Panteulers a YEA) Geet Zs Zn pecans kel] SM] Capilel_ wean cont TENT _Copriel | current asself q Ur, { cath — 4 pebtors o | Xam XXX ae | oan {| 2x xxx ~~ | convent Labi ities | + _ * “= | A | sundry Cradles xy = j * >? | Sills pie | xe | | wornmg Copht | xxx XHR | LRRR | x | et inecend [DECME | x ¥e _ in eniemy capits! dene | x| 1] Dorr ilar’ ous cosh 3, S00 +, Spee ~, Bills Peciveable. 18,000 90000 é Shock a y0000. 1 2,000 _e Leng Junin investment I5;00D 10.000 ~~ Lama 2.0000 30/000 3 — 255,000 3/2400 => EPobilities _ <6 Bins poybl e- 0, 00d 1,00,000 _ e Capi tal 125-,000 1150, 000 | fa ? Retomned eng — Goo 35,000 — | 255000 3,25000 ® | | - | | ye gee schedule of Chemged im working copier] md ZF patnticulen's Wiley Nad encase econ | | cure Reels _ | com 35,01 FS, 000 40,000 — i+ | mints Recervable awe ee — BO00 =} Toit stock | SHO WeReP 23,000 — Sap total car eead swe) 2120000 28,5000. aap ee 7 cesteens Liabiliny, =P \ a Sag? | pie poy ble CE) F000 170000 _ 30000 | n'a | | Sey | packing capita (4g) 'Sd.000 8200 at | . ‘i 35,001 — - | Net Troaese ‘7 Hosking ° — | 35,000 | Ny” | copitel Taso 185000 | dan0g ae | ae ee e009 asp, Le | Sey | ae 1 _ ~y P | : 18 ~lb ys 4 Concluding Shave Pred) 2 $4 dal alla lalallala al TL ony « TL True of pre ference . ~? =| ae ~ L Tssue of debewlee xxxy sal ob fined ASEH Sale ob invdina xxK% Cieng —4 ein ) < Ted jets Statement — of step on = dajualment of opemobork CPG L) A clounk by . oy, | Pewtbicuteot [tect Poonticalers trench | To Rance cfd | 5000 hy bate PIA Loecd | | | By funds from ooo | cpena hens, ’ | Chateneing figtD | 4000 +5000 | Souvenes ome application of r ~ funds osices) Amount Applicaivn ov User | Aincunt Funda trom opencdin xxx purchase of Fiwedesie Axx Tasue of eauty Shoe purchase of inverting Ke Clong team) Redemption of Pf xxx shone | Redemptin ef debenky xxaux | Tuteaim dividend pula Ax Tees Paid pee Dividenel pestet MA, Tneoreate wh Woking | | capi) | ToteyFundtid stajement of Seuvces ovel replications : é t 1 sources of fumds amount Application of -hunds | Aeon | | sale of long Team aval s\000 porches of Lemd 10,005 | | Tssue of capital | | mpl 2svod Neb anonese . | | | . (5000 | | | working capi tell = Fumas from opesrections | 1S1000 | | | | | | | mo 14S} 000 |, | 4 51000 —————— | = - & Infiws of coh oukflow of tHe coah NOTeE'— Sources of funds meem ok fumes meenice | i | satppli cation 5 Net side. ( 35,000) —) fomas From operation side C15;000) enteaing the sunce? Value ' inumete — om WOREING Capital Aways trp licstons « noppPprpppraepPPesse ses15.14 Example 5 Managorial a Economies and Financial Analysis Given are the Balance Sheets of ABC Limited. You are required to prepare a Funds Flow Statement Fixed assets at cost L Depreciation Net fixed assets (A) Current asset Investments (temporary) Closing inventory Sundry debtors Total of current assets (B) Less: Current liabilities Bank overdraft Trade creditors and provision Proposed dividend Total current liabilities (C) Working capital (D) = (B) — (C) Net fixed assets + Net Working Capital (A) + (D) Represented by Ordinary share capital General Reserve Profit and Loss Account 8% Debentures As on 31° March, 2013 (Rs) 7.00.00 2,56,000 100,000 18,15,000, 11,60,000 9.98,000 1,60,0000 23,18,000 9.12,000 13,62,000 7,56,000 2,60,000 3.52,000 [As on 31" March, 2014 (Rs) | — ¥,70,000 3,60,000 5.10000 150,000 19,00,000, 13,87,000 —34.37,000_ 5,50,000 11,92.000 240,000 19.82.000 14,55,000 19.65,000 10,00,000 3.80,000 485,000 1,00,000 13.62,000 19,653,000 Solution Statement of changes in working capital 2013 2014 Increase in] Decrease in (Rs) (Rs) | working capital |working capital (Rs) (Rs) Current assets Investments (Temporary) 100,000 ,000 50,000 Closing inventory 18,15,000 | 19,00,000 85,000 Sundry debtors 13.15,000_ | _13,87,000 72,000 34.37.000 =_ Funds flow Analysis 18.15 | | | Bank overdraft 11,609,000 | $,50,000 6,10,000| ‘Trade creditors and provision 998.000 11.92,000 | 194,000 Proposed dividend 1.60,0000 | 2.40.00. | 80,000 23,18,000 | 19,82,000 | | Increase in working capital | | 5.43,000 | 8.17.00) 8,17,000 Funds from Operations Net profit in the current year (4,85,000 ~ 3,52,000) | ‘Add: General reserve (3.80,000 ~ 2,60,000) | 9,000 1,160,000, l 3,63,000 Depreciation during the year (3,60,000 ~ 2,50,000) | Funds from Operations Funds Flow Statement Sours | Sources ] (Rs) | Applications | (Rs) Funds from operations | Purchase of Fixed assets | 1.70.00 Issue of shares | 2,50,000 | Increase in working capital | $43,000 8% debentures issued | 1.00.00 |) STATEMENT FUNDS FLOW STATED 7 etgals How statement involves thice stages Peri ear Setedule) of changes in working capital 1 Statement (Ors > Funds fom operations: aiement oF statement of sources and application of funds: 3 Funds flow Current Assets and Current g Capital Impact of Changes ies on Worl ement of changes in working capital will be prepared with the help of current assets and curry habilities, Therefore, we have to identify current assets and current liabilities in the given balance sheu The impact of increase/decrease in current assets and current liabilities on working capital can be under. stood with the following examples. * The current assets during the ye same period are f 2012-13 are Rs 5,00,000 and the current liabilities during 3.00,000, The working capital during this period is Rs 2,00,000 (ic. CA, CL). Suppose in the year 2013-14, current assets increased to Rs 600,000, current liabilities remain. ing the same at Rs 3,00,000, The working capital in this case increases to Rs 3.00.00 When compared to 2012-13, there is an increase in working Rs 1.00,000. * Ifthe current assets in 2013-14 fall to Rs 4,50,000, the current liabilities remaining the same, the working capital will decrease to Rs 1,50,000 and there is a decrease of Rs 50.000 in the w capital. when compared to last year. * Let us assume the current assets remain at Rs 5.00,000 in the year 2013-14, but current Niabilities decrease from Rs 3,00,000 to Rs 225,000. The working capital in this case will increase to Rs 2.75,000 when compared o last year, there is an inerease in the working capital by Rs 75.000 Let us assume the current liability increases in the year 2013-14 to Rs 3,25,000, the current asset remaining the same at Rs 5,00,000, Here, the working capital decreases to Rs 1,75,000 and there isa decrease of Rs 25,000 in the working capital, apital during 2008-9 by orking We can, thus, deduce the following rules for the preparation of Statement of Changes in Working Capital: (a) Increase in current asset will result in increase in working capital. (b) Decrease in current asset will result in decrease (c) Decrease in current liablity will result in increas (4) Increase in current liability will result in decrea ‘Thus We find a direct telationship between current ship between current liabilities and working capital, in working capital. ¢ in working capital. ise in working capital. assets and working capital and an inverse relatio™ Preparation of Statement (or Schedule) of Changes in Working Capital The format of sta t . tement of changes j 2 Ci : . ent liabilites is shown as Table 15:3 es in working capital with selected items of current assets and cumsheet shedube => (2) Prelorel — from Tre folldoing Balew Sheba count , fend How Witomng spitel , -Adjusa eft. Lobel bed fan |e Assets j seit | 20\% - — T shame ceapitel be,000 | bs,bon | cod wil! arab |e eetorned — earmnys — | Bq,000 | 2601 pg teaneal |fe2sss| (Sean curves! Liabiiter 12009 | B000 | 1 16 ,d00} 14,808 Cavrent ser? | Wybopo | 141060 Adjust mertS (D dividend? ap be plams g machinery as yin00 “R ‘ pad duamg £G!— 12,000 fe ges O veponciation On | | asks Panbousleas Beth 2019 Inonese. ears curte Asef — Ib,voo 14,000 Bevo _ current Liehali Hy p,00d | 3,000 JOoO — working ceapital Ce) | 4000 16000 — \ 21000 ES NEE chimgesingg im wom king capital = 181000 =—Dy Adjusteel Porticalecy © Got will To peparicicr tions To dividend = To balance cf wy Dy Particles To opeming beilence. plemt & machinory To Lajence Ccagh punches) Plow ¢ machino™y te Proud svoo 20,000, 12,000 26,000 mound 6.000 10) 000 4D 000 porwlid ancl Pasbiculers - Bld 34 bon Ky balance Ry funds from opeartia 24,000 63,000 Pun ticles Amnceed by depri ciection 2b 000 by belence eld Sdr00 Age00 _typlication of fumds mount puree of flawt ¢, |e machinery | ee) dividewt | \21000 net InenesSing” weoking 42,000) copra Loss Aetouat Y Ante cr SAAD III AAAS SANA A IID, I » ’ { (, f, {, oy alalol (ld, y epCeth Pow Stabewreat Cosh foo | eaNS | ~ __ Means i NTs stulemend of meconding necninding Sif sbomedle aj infloos 9 Out fons of cogh. coh we Coghflow —cfecbmeat a —_— atk qed wey OAC s tyre cunnent cosh position s evaluated the Oo © To Know he -fabere © oss post shon © Yo elee Bran cial loons Gj Shem Hears financial Fasthen © euplain Me POON cosh posi-Hon Cash-flows eupiain joo YP oO pajused pare AIC | © cosh $10 shatewents> tnconese in Currest cosh How ntoa of cosh | es opening bulence Cath § bem cath Hit ~y Tscues of Shamed | scans 2 Tssus of clebentune? 4 xr 4 Real shy Long smn lot ee 08 ~) Sale of fined ASSEH yy xr ~) dividen+ Recewed yeu SJ cash Prom — opederting % *%% > peanesse in Cerrtnt | x * ey A gsi Cin Heyy Xo Licbulitey Couttie) » | statement : C from the Yeu on outtine of cath Re deption of POF Shame | xxux pepeymrent ot beberkines ase purnchese of fired PSSA Xeon Pepenpreelt Long umm Leg xa payment of The widest xn cosh foo it openahons xnmx cnemess ein curred AP OR (a in Curve Hail 2 QW peames ©Pablens ianiae ® Laat tied gore aed = a —_ | shane capits) 9 p00 280,000 Cosh 3,00, 000 4,000 cored org ey F,2000 4 F000 pebhas \2p000 1, 1,000 prot] 9,000 | 0 Lost ee 23,000 clock 8,000 10PP | Le > otal Boobs 28,000, Lemel — 10000 eee’ feces = Tote 2.30000 3,158,000 Adjusted P§b ac : a - ee = CY : Peart caleos tawtpy Posrhicul ems Hreagget: 1 To finonce cjg | 23,000 BY balance bla loceo , ; By cosh from openchoy !S0@ —_ Cal encin igen 23,000 ¢ +i) 23,000 ‘ = — L 1S. coh Fivs , gtalemen - ae ,& cay Cash Toflows hoot = ss shee : . - Leth out Pos T ; opening balance cosh | 30,000 h - t Amount: punchose of Land 16,000 ' | of shat i) | Essue of Shame Copite) SB000 — Syeopate ty stock 10,000 , | : © Deomees : | coh ~ Tsuce. of Short ein debhas | S000 oy tions | ‘ From openations| i000 lasing balance» copie meme 6h fs coming jnsead | pecnecse in cnediters — 25000 cash 43 000 | (118.000 |Joo 28060 7 Teonon KS00D“Cacec will | sgo0n [26000 plant % | Gov00 SPeD0 3000 Mochinerp @) shane cepted profit q bess le | carrent Liability] 12-000 5 | yoeo00, Aid, Cosh — —— Toon | 14282 10,6000 | 400° Ad * Aye T Adjusted Gy depreciation on pkent |g moshimory . 20000 sh © Frvidendl Peele [Ws < particule BY Lelanced b/d To waitlen off Good wild S000 a ae By cosh tony) To depoeciection . 24,00 Sicet uecta | 20,000 opecedtion oop [to dividena — wme00 CBatomeing 49) To Bal cH | 26,000 tL —— &3,009 a 3 8 i piemt and mochineny wt] pa by Depaicietin forces To bulewce b]d | 60,000 | | SDOOD To Cath Crancke) | 10,000 ;&4 balence Ga } - te | | | : | oop a | 7 Cosh — fenm optdiction 20 xchinory = 10/000 purches Phewt € Lrom — -ateve “kbfes) ELLIS ESSISS ISSAC ng + 6 SRR RAK) f oi 4 rd, hd,o e cunt Cath tlw Statement merce cosh TwH ous Aeon Cash outflows cAvnotenl opening balences coh 1, 0010 pusrchey plow! & mechinony 10,000 Ssqueol Shane Capt] — S09 Decmmecse in C Laibintigy 4,000 dividert pag ble 12000 Coth from operetions 24,000 closing balance. | 14000 eka SDB 000