1

Priya Incorporation



Balance Sheet at December 31

Amount in
Rs. '000
Assets 2014 2013
Cash 180 200
Accounts receivable, net 850 830
Inventory 620 560
Total current assets 1650 1590
Plant and equipment 7540 6650
Accumulated depreciation (1920) (1500)
Total assets 7270 6740

Equities 2014 2013
Accounts payable 220 190
Accrued expenses 450 440
Total current liabilities 670 630
Long term debt 1000 950
Total liabilities 1670 1580
Common stock, no par value 4000 4000
Retained earnings 1600 1160
Total equities 7270 6740





















2


Income Statement for 2014
Particulars
Amount in
Rs. '000
Sales 8650
Cost of goods sold 4825
Gross profit 3825
Operating expenses
Depreciation 420
Other 2135 2555
Income before interest and tax 1270
Interest expenses 70
Income before tax 1200
Income tax @ 30% 360
Net income 840

Cash Flow Statement for 2014
Particulars
Amount in
Rs. '000
Net Cash flow from operating activities:
Collection from customers 8630
Payments to suppliers (4855)
Payments for operating expenses (2163)
Interest paid (72)
Taxes paid (320)
Net Cash provided by operations 1220

Cash flow from investing activities: purchase of plant and equipment (890)


Cash flow from financing activities:
payment of dividend (400)
Proceeds from new long term debt Issue 50 (350)

Change in cash (decrease) (20)
Cash balance, beginning of the year 200
Cash balance, end of the year 180

Priya Inc. had 200,000 shares of common stock outstanding throughout the year.
The market price of the stock at the end was Rs.65 per share. All sales are on credit.



3
Required:

Compute the following ratio as of the end of 2014 or for the year ended December 31, 2014,
whichever is appropriate.

Liquidity Ratios
1 Current ratio
2 Quick ratio
3 Accounts receivable turnover
4 Days sales in accounts receivable
5 Inventory turnover
6 Days Sales in inventory



Profitability Ratios
1 Gross Profit ratio
2 Return on sales
3 Return on assets
4 Return on common equity
5 Earning per share
6 Dividend yield
7 Payout ratio
8 EVA, Assuming cost of capital is 12%

Solvency Ratios
1 Debt ratio
2 Times interest earned
3 Cash flow to total debt

Valuation Ratios
1 Price earning ratio
2 Price to book value
3 Market Capitalization / Sales