Q. Re-arrange the following Balance Sheet of M/s Alpha Ltd. As on 31st March 2005 in a form suitable for analysisLiabilities Rs. Assets Rs.Equity Share 398000 Goodwill 66000Preference Share Capital 300000 Machinery 220740Securities Premium 40000 Land 176000General Reserve 20000 Building 490000Reserve for Doubtful Debts 2000 Furniture 179260Profit & Loss Account 60000 Investment in Shares of Y Ltd 18000Depreciation Provision 240000 Stock 48000Debentures 80000 Debtors 26150Bank Loan 30000 Loose Tools 28500Fixed Deposits 40000 Cash 6500Sundry Creditors 36700 Bank 16000Bills Payable 62450 Staff Advances 48000Provision for Taxation 64000 Advance Tax 99000Provision for Dividend 58000 Preliminary Expenses 3000

Expenses on Issue of Shares 60001431150 1431150

Note:Details of Depreciation provision:Machinery Rs. 80000Building Rs. 100000Furniture Rs. 60000Also determine the following:a) Total funds employedb) Fictitious assetsc) Intangible assetsd) Current assetse) Quick assetsf) Current Liabilitiesg) Working Capitalh) Loan fundsi) Proprietors’ fundsj) Net assetsk) Fixed liabilities

Q. Balance Sheet as on _________31.12.2004 Rs. 31.12.2005 Rs.

Current Assets:Cash at Bank 123000 153000

Debtors 211200 197700Bills Receivable 120000 91500Prepaid Expenses 9000 12000Fixed Assets:Building 480000 465000Plant 405000 375000Furniture 151500 55800

1500000 1350000Current Liabilities:Creditor 270000 15000Bills Payable 120000 241500Outstanding Expenses 45000 49500Reserve & Surplus 165000 144000Share Capital 900000 900000

1500000 1350000Prepare the comparative Balance Sheet from the above and comment on the financial position of the company.

Q. Prepare a Comparative Financial Statement from the following details and offer comments.Balance Sheet as on 31st March 2005

(Rs. In thousands)Liabilities X Ltd Rs. Y.Ltd. Rs. Assets X Ltd Rs. Y.Ltd. Rs.10 % Pref. Share Capital 36 54 Land 80 40Equity Share Capital 80 100 Machinery 220 300Securities Premium 40 50 Investments 10 5General Reserve 40 10 Sundry Debtors 28 36Profit & Loss A/c 21 Stock 42 45Depreciation Reserve 180 170 Bills Receivable 7 412 % Debentures 10 15 Prepaid Expenses 2 3Long Term Loans 5 10 Bank 10Bank Overdraft 15 Cash 3 2Sundry Creditors 10 24 Preliminary Expenses 8 15Outstanding Expenses 5 10 Goodwill 20 10Unclaimed Dividends 3 2

430 460 430 460

Q. Prepare a Comparative Revenue Statement from the following details and offer comments.KND Ltd.

Profit & Loss Account for the years ended 31st March(Rs. In thousands)

Particulars 2005 Rs. 2006 Rs. Particulars 2005 Rs. 2006 Rs.To Opening Stock 75 100 By Sales 1500 2000To Purchases 750 1070 By Closing Stock 100 120To Interest on Debentures 50 50 By Discount 3

To Depreciation By Goods Destroyed 10 Furniture 5 5 by fire Machinery 12 10 By Profit on Sale of 8To Administrative Exp. 98 147 MachineryTo Selling Expenses 150 250To Discount 2 1To Carriage 25 105To Loss by Fire 5To Wages 65 100To Provision for Tax 190 145To Net Profit 190 145Total 1612 2133 Total 1612 2133

Q. Prepare a Common size Comparative Financial Position Statement from the following Balance SheetsBalance Sheets as on 31st March 2006

Liabilities A Ltd Rs. B Ltd Rs. Assets A Ltd Rs. B Ltd Rs.Equity Share Capital 250 105 Fixed Assets 120 90Reserve Surplus 180 10 Investments 80 2010 % Debentures 50 100 Prepaid Expenses 10 12Bank Overdraft 45 Stock 240 268Creditors 90 200 Debtors 160 80Provision for Tax 70 25 Cash 30 10

Preliminary Expenses 5640 485 640 485

Q. From the following Balance Sheet as on 31st March 2005 and the Trading, Profit & Loss Account for the year ending 31st March 2005, prepare:a) Common Size Balance Sheetb) Common Size Income Statement

Balance SheetLiabilities Rs. Assets Rs.Equity Share Capital 2000000 Goodwill 1000000General Reserve 400000 Building 2000000Profit & Loss Account 600000 Machinery 800000Preference Share Capital 600000 Furniture 200000Secured Loan 400000 Stock 800000

Income Tax Provision 200000 Debtors 600000Bank Overdraft 600000 Bank Balance 400000Creditors 1200000 Bills Receivable 200000

6000000 6000000Trading Profit & Loss Account

Rs. Rs.To Opening Stock 800000 By Sales 4200000 To Purchases 2200000 Less: Returns 200000 4000000To Wages 500000 By Closing Stock 1000000To Factory Expenses 500000To Gross Profit c/d 1000000

5000000 5000000To Administrative Exp. 150000 By Gross Profit b/d 1000000To Selling Expenses 100000 By Commission 75000To Finance Expenses 50000To Depreciation 125000To Income Tax Profit 200000To Net Profit 450000

1075000 1075000

Q. Calculate the Trend Percentage from the following information extracted from the financial statement of X Company. Offer your comments.

2005 Rs. 2004 Rs. 2003 Rs.Sales 16400 13640 9880Cost of Sales 14970 12490 8810Expenses 80 130 50Interest Expenses 500 370 200Tax 390 190 450Fixed Assets (Net) 5480 5110 4770Working Capital 5080 4880 3290Investments 770 180 420Net Worth 6660 6010 5850External Loans 4680 4160 2640

Q. Analyze and comment on the trendBalance Sheet of Efficient Ltd. as on 31st March

(Rs. in thousand)2003 Rs. 2004 Rs. 2005 Rs.

Assets:Fixed Assets (at cost less Depreciation) 15.00 12.50 12.00Investment 1.00 0.50 1.00Stock in Trade 6.00 5.00 4.00Accounts Receivable 9.00 7.50 6.00Loans and Advances 4.00 4.00 3.00Cash and Bank Balances 0.50 0.50 0.50

35.50 30.00 26.50Liabilities:Share Capital 20.50 17.00 14.50

Bank Loans 4.00 3.00 3.00Sundry Creditors 11.00 10.00 9.00

35.50 30.00 26.50

Q. Following is the Profit and Loss Account of Saurav Balanced Limited for the year ended 31st March 2005. you are required to prepare Vertical Income Statement for the purpose of analysis. Rs. Rs.To Opening Stock 700 By SalesTo Purchases 900 Cash 520To Wages 150 Credit 1500To Factory Expenses 350 2020 To Office Salaries 25 Less: Return and 20 2000To Office Rent 39 AllowanceTo Postage and Telegram 5 By Closing Stock 600To Directors Fee 6 By Dividend on Investment 10To Salesman Salaries 12 By Profit on Sale of Furniture 20To Advertising 18To Delivery Expenses 20To Debenture Interest 20To Depreciation On Office Furniture 10 On Plant 30 On Delivery Van 20To Loss on Sale of Van 5To Income Tax 175To Net Profit 145

2630 2630

Q. Common India Ltd.Balance Sheet as on 31st December 2005

Liabilities Rs. Assets Rs.Capital Reserve 126000 Copyright 100000General Reserve 120000 Cash 21000Provision for Tax 50000 Calls in Arrears 9575Commission received in Advance 10875 Plant and Machinery 42000015% debentures 160000 Debtors 30042512% Bank Loan 40000 Prepaid Insurance 153756% Preference Share Capital 200000 Land and Building 500000Equity Share Capital 1000000 Fixtures 25000Bills Payable 49125 Furniture 75000Profit and Loss Account 9000 Preliminary Expenses 18625Bank Overdraft 10740 Goodwill 100000Share Premium 15000 Investments (Long Term) 175000Sundry Creditors 189260 Stock 200700

Market Investments 193001980000 1980000

You are required to rearrange above Balance Sheet in vertical form and compute the following ratios:(a) Current Ratio, (b) Proprietary Ratio, (c) Capital Gearing Ratio.

Q. Shinkanshan Limited commenced business on 1st January 1990. The Balance Sheet as on 31st December 2004 and as on 31st December 2005, the Profit nd Loss Account for the year ended 31st December 2004 and for the year ended 31st December 2005 are given below:-Liabilities 31.12.2004

Rs.31.12.2005

RsAssets 31.12.2004

Rs.31.12.2005

Rs

Equity Share of 200000 200000 Fixed Assets Rs. 10 each Less: Derecia. 396000 416000General Reserve 40000 20000 Stock in Trade 120000 60000Profit & Loss A/c 4000 28000 Debtors 160000 80000Mortgage Loan 160000 220000 Cash & Bank 4000 60000Bank Overdraft 40000Creditors 180000 60000Provision for 26000 68000 TaxationProposed Dividend 30000 20000

680000 616000 680000 616000Profit and Loss Account for the year ended -------

31.12.2004 Rs.

31.12.2005 Rs

31.12.2004 Rs.

31.12.2005 Rs

Directors 60000 20000 Balance b/f 28000 4000

Remuneration Net Profit after 121600 160800Interest on Loan 9600 8800 Depreciation On MortgageProvision forTaxation 26000 68000Proposed dividend 30000 20000Transfer to Reserve 20000 20000Balance c/d 4000 28000

149600 164800 149600 164800Sales for the year 2004 amounted to Rs. 1000000 and for 2005 amounted to Rs. 1200000Calculatea) Net Profit Ratio b) Current Ratioc) Liquidity Ratio d) Debt/Equity Ratio ande) Debt Service ratio f) Net Operating Profit RatioGive your comments on profitability and solvency of the company.Do you think that there is an improvement in performance of the Company in 2005?

Q. The following data are extracted from the published accounts of two companies in an industry.ABC Ltd. Rs. XYZ Ltd. Rs.

Sales 3200000 3000000Net Profit after Tax 123000 158000Equity Capital (Rs. 10 per shre fully paid) 1000000 800000General Reserves 232000 642000Long Term Debt 800000 660000Creditors 382000 549000Bank Credit (Short Term) 60000 200000Fixed Assets 1599000 1590000Investments 331000 809000Other Current Assets 544000 452000You are required to prepare a statement of comparative ratios showing liquidity, profitability, activity and financial position of the two companies. As a Finance Analyst give a report to the management about financial evaluation of both the companies.

Q. You have the following information on the performance of Prosper Co., as also the industry averages:a) Determine the indicated ratios for Prosper Co.b) Indicate the Company’s strengths and weakness as shown by your analysis

Balance Sheet as on 31st December 2005 Rs. Rs.Equity Share Capital 2400000 Net Fixed Assets 121000010 % Debentures 460000 Cash 445000Sundry Creditors 330000 Sundry Debtors 550000Bills Payable 440000 Stocks 1650000Other Current Liabilities 220000

3850000 3850000Statement of Profit for the year ending 31st December 2005

Rs. Rs.Sales 5500000Less: Cost of goods Sold Materials 2090000 Wages 1320000 Factory Overheads 649000 4059000Gross Profit 1441000Less: Selling and Distribution Cost 550000 Administration and General Expenses 614000 1164000Earnings before Interest and Tax 277000Less: Interest Charges 46000Earnings before Tax 231000Less: Tax 950 %) 115500Net Profit 115500Ratios to be computed:1) Current Ratio 2) Liquid Ratio 3) Earning per Share 4) Net Profit Ratio5) Operating Ratio 6) Proprietary Ratio 7) Stock Turnover Ratio 8) Debt Collection Period9) Capital Gearing Ratio

10) Return on Capital Employed

Q. The following is the Balance Sheet of J Ltd on 31st March 2005 Liabilities Rs. Assets Rs.Share Capital 2000000 Fixed Assets 1800000Reserves 400000 Debtors 500000Creditors 300000 Stock 400000Bank Overdraft 100000 Bank Balance 100000

2800000 2800000Total Sales were Rs. 9000000 and Cash Sales were 10% of the total sales. Cost of goods sold was Rs. 7000000. Net profit before payment of tax at 50 % was Rs. 900000. opening Stock figure was 75 % of the stock figure on 31st March 2005. Debtors on 31st March 2005 include advances of Rs. 50000 to suppliers. Advances were given in March 2005.Debtors on 1st April 2004 were 50 % of Debtors on 31st March 2005There were no non-operating expenses and non-operating incomesCalculate the following ratios:a) Current Ratio b) Liquid Ratioc) Operating Ratio d) Net Profit Ratioe) Stock Turnover Ratio f) Debtors Turnover Ratio and Collection Periodg) Stock/Working Capital Ratio

Q. From the information given below prepare a Balance Sheet in a vertical form suitable for analysis and calculate the following ratio:1) Capital Gearing Ratio 2) Proprietary Ratio3) Current Ratio 4) Liquid Ratio5) Debtor Equity Ratio

Rs.Bank 50000Land and Building 800000

Advance Payments 62000Stock 273000Creditors 406000Debtors 523000Bills Receivable 21000Plant and Machinery 54400012% Debentures 250000Loan from a Director 400000Equity Share Capital 1000000Profit and Loss Account 217000

Q. From the following Balance Sheet of B Ltd. As on 31st December 2005 and the Trading Profit & Loss Account for the year ending 31st December 2005, calculate the following ratios.a) Current Ratio b) Liquid Ratio c) Inventory Turnover Ratiod) Debtors Turnover Ratio e) Operating Ratio f) Capital Gearing Ratiog) Net Profit Ratio h) Stock Working Capital Ratio i) Earning Per Equity Sharej) Interest Coverage Ratio k) Creditors Turnover l) Dividend Payment Ratio

Balance Sheet Liabilities Rs. Assets Rs.10 % Preference Capital 200000 Fixed Assets 2600000Equity Capital (Rs. 10) 1000000 Bank Balance 100000General Reserve 800000 Short Term Investment 30000012 % Debentures 1400000 Debtors 400000Creditors 120000 Last year Rs. 200000Outstanding Expenses 220000 Stock 600000Income Tax Provision 260000

4000000 4000000Trading Profit & Loss Account

Rs. Rs.To Opening Stock 600000 By Sales To Purchases 5160000 By Closing Stock 600000To Gross Profit 840000 6600000 6600000To Administrative Expenses 80000 By Gross Profit 840000To Rent 56000 By Profit on Sale of Fixed Asset 110000To Interest 90000To Selling Expenses 44000To Depreciation 200000To Income Tax Provision 240000To Net Profit 240000

950000 950000The Company declared dividend on equity share @ 20 %

Q. The following items appear in the accounts as at 31st December 2005 of Overseas Ltd.Cash Rs.Land and Building (at cost) 48600Deposits and Payments in advance 800000Stock 62000Trade Creditors 272800General Reserve 405750Debtors 100000Bills Receivable 523000Plant & Machinery at cost less Depreciation 22600Debentures-Repayable 2005 (Secured) 544000Bank Overdraft 250000Ordinary Share Capital of Rs. 10 each 52000Profit and Loss Account Balance 1000000Proposed Dividend for 2005 Net 217000Trade Investments 86250Advance payment of Tax 20000Provision for Taxation 100000Bills Payable 264000Net Sales for the year 2005 18000

2182400You are required to arrange the above items in the form of Financial Statements to indicatea) Working Capital b) Total Funds Employed c) Shareholders’ Equityand calculate the following ratios:a) Current Ratio b) Turnover of Debentures

Q. The Balance Sheet and the Income Statement of Fiat Ltd. Are given hereunder:-Balance Sheet as on 31st March 2005

Liabilities Rs. Assets Rs.Equity Capital (Rs.10 each) 120 Fixed Assets 100Returned Earnings 36 Prepaid Expenses 16% Debentures 50 Inventory 10Creditors 10 Debtors 70Wages Payable 4 Cash 10Taxes 1

221 221Profit & Loss Account for the year ended 31st March 2005

To Opening Stocks Rs. Rs. To Purchases 30 By Sales 400To Operating Expenses 300 By Closing Stocks 40To Income Tax 80To Net Profit 12

18440 440

From the above statement computea) Current Ratio b) Acid Rest Ratio c) Stock Turnover Ratiod) No. of days sales invested in Debtors e)No. of days purchases in Creditorsf) Return on Capital employed g) Return on Proprietor’s equity h) Earning per Sharei) Gross Profit Ratio

Mr. Prudent is interested in purchasing share of Flat Ltd. He seeks your advise regarding the purchase of share of the company.If you are a supplier would you grant credit to this company?

Q. The following are the Balances as on 31st March 2005 of Ambika Ltd.Rs.

Share Capital (20000 Equity Shares of Rs. 10 each of Rs. 5 called up) 100000Land and Building 125000Machinery 50000Stock 50000Reserves and Surplus:General Reserve 50000Profit and Loss Account 150005% Debentures 100000Bills Payable 7000Bills Receivable 5000Furniture 25000Debtors (less than 6 months) 11000Preliminary Expenses 5000Creditors 18000Cash on Hand 2000Bank Balance (Dr.) 18000Provision for Doubtful Debts 1000Calculate the following Ratios:a) Debt Equity Ratio b) Proprietary Ratio c) Current Ratiod) Liquid Ratio e) Stock to Working Capital RatioAnswer the following questions:1) How is the short term solvency position of the company?2) Is the company financially stable?3) How is the liquidity position of the company?4) give your opinions about working capital position of the company.

Q. The Capital of B & Co. is as follows:Rs.

10 % Preference Share Capital (Rs. 10) 1200000Equity Shares of Rs. 10 each 3200000

4400000Profit after tax at 50% 1080000Depreciation 120000Equity dividend paid 20 %Market price per Equity share Rs. 90Calculate:a) Earning per Share b) Dividend Payout Ratio

Q. From the following data, prepare a statement of proprietor’s funds with as much details possible:Current Ratio 25Liquid Ratio 15Proprietary Ratio (Fixed Assets/Proprietary fund) 0.75Working Capital Rs. 60000Reserves and Surplus Rs. 40000Bank Overdraft Rs. 10000There are no Long Term Loans for fictitious assets