RATIO ANALYSIS 1.

The following figures ( in rs) relate to the company for the year 2007 Sales 520000 selling & distribution expenses Purchases 322000 Administration expenses Opening stock 76000 provision for tax Closing stock 98500 sales returns Dividend 9000 profit on sale of shares Loss on sale of assets 4000 Calculate : a. Gross profit ratio b. Operating ratio c. Operating profit ratio d. Net profit ratio 22000 58000 40000 20000 3000

2. Given below is the summarized balance sheet and profit and loss of Raja Mills Ltd as on 31-12-1997. You are required to calculate: a) Current ratio b) quick ratio c) Fixed asset turnover ratio d) Debt equity ratio e) selling & distribution expenses ratio f) Stock turnover ratio g) Net profit ratio h) operating ratio i) Debtors collection period Balance sheet as on 31-12-1997 Liabilities Rs. Assets Equity capital: 40,000 shares of Rs.100 each 40,00,00 Land and building 0 Reserves 18,00,00 Plant and machinery 0 Creditors 26,00,00 Stock 0 Profit and Loss account 6,00,000 Debtors 6% debentures 6,00,000 Cash at bank 96,00,00 0 Profit and loss account Particulars Rs. Particulars To opening stock 19,90,000 By Sales To purchases 1,09,05,000 By closing stock To direct expenses 2,85,000 To gross profit 68,00,000 1,99,80,000 To Administrationexpenses 32,00,000 By Gross profit b/d To selling & distribution By Non- operating expenses 4,00,000 income To finance expenses 3,00,000 To other non- operating Rs. 30,00,000 16,00,000 29,60,000 14,20,000 6,20,000 96,00,000

Rs. 1,70,00,000 29,80,000 1,99,80,000 68,00,000 1,80,000

expenses To net profit

80,000 30,00,000 69,80,000

69,80,000

3.Following is the Balance Sheet of Birla cements ltd. Whose share is traded at Rs.150 per share in the stock exchange. During the year company has declared a dividend of 30% on equity shares Rs Rs Equity shares of Rs.10 each 1,00,000 Cash at bank 12,000 6% Preference capital 1,00,000 Bills Receivable 50,000 Debentures 60,000 Debtors 70,000 Reserves 1,50,000 Stock 40,000 Creditors 67,000 Furniture 1,30,000 Bank Over Draft 40,000 Buildings 2,20,000 Proposed Dividend 30,000 Goodwill 45,000 Profit & Loss a/c 20,000 -----------------------5,67,000 5,67,000 ------------------------ADDITIONAL INFORMATION: Sales for the year Rs.15,00,000 and Rate of Gross Profit 60% Administration and Selling Expenses 45% on sale. Rate of Tax 35% Calculate: 1.Short- term Solvency and Long- term Solvency Ratios 2. Earnings Per Share ( EPS) 3. Dividend Yield Ratio 4. Price Earning ( P/E) Ratio . 4.From the following financial statement of Western General ltd. Whose market price per share was Rs.75 , You are required to calculate the following ratios. a) Gross and net profit ratio, b) Earning per share , c) Price earning ratio, d) Stock turnover ratio, e) Fixed Assets ratio, f) Current ratio, g) Liquid ratio, h) Debt-Equity ratio, i) Fixed Assets ratio, j) Proprietary ratio.

TRADING AND PROFIT /LOSS ACCOUNT Rs. Opening Stock Purchases 43,500 1,83,000 by Sales by closing stock 2,25,000 56,500

Gross profit Sundry expenses Tax Net profit

55,000 -------24,000 10,000 21,000 --------

by Gross profit

---------55,000 -----------

BALANCE SHEET Liabilities (Rs.) Equity share capital Of Rs.10 each General Reserve Profit/loss a/c 7% Debenture Bills Payable Creditors Bank overdraft TOTAL 5. 2,10,000 25,000 21,000 1,00,000 10,500 45,000 10,000 4,21,500 Assets (Rs.) Fixed Assets 1,65,000 Stock 56,500 Sundry Debtors 1,24,000 Bank 66,000 Cash 10,000 TOTAL 4,21,500

The following figure(Rs.) relate to a company for the year ending 2005. Opening stock Purchases: cash Credit 76,000 22,500 3,00,000 Sales: cash sales Rs. credit sales Closing Stock Dividend profit on sale of shares 1,50,000 3,50,000 98,500 9,000 3,000

Salaries 15,300 Advertisement 6,700 Administration exp. 27,000 Loss on sale of assets 4,000 Depreciation 23,000 Net profit 1,36,000

BALANCE SHEET Liabilities (Rs.) Equity share capital Of Rs.10 each General Reserve Profit/loss a/c 7% Debenture 3,10,000 25,000 21,000 2,00,000 Assets (Rs.) Fixed Assets Stock Sundry Debtors Bank 2,10,000 98,500 1,24,000 66,000

Bills Payable Creditors Bank overdraft TOTAL

10,500 50,000 12,000 6,28,500

Cash 10,000 Short Term Investment 1,20,000 TOTAL 6,28,500

Compute the following ratios: a) Gross and net profit ratio, b) Earning per share , c)Operating &operating profit d) Stock turnover ratio, e) Debtors turnover f) creditors turnover g) Fixed Assets turnover h) Current ratio, i) Liquid ratio, j ) Debt-Equity .

CASH FLOW STATEMENT 1. SS ltd. supplies you the following balance sheet for the year ending 31.12.1998 and 31.12.99. Liabilities Rs. Rs. Assets 74,000 6,000 13,840 1,000 10,560 1,000 1,06,400 Bank balance Debtors Stock Land Good will Furniture Total Rs. 9,000 14,900 49,200 20,000 10,000 4,100 1,07,200 Rs. 7,800 17,700 42,700 30,000 5,000 3,200 1,06,400

Share capital 70,000 8%Debenture 12,000 Creditors 10,360 Reserves 700 P/L a/c 10,140 Bills payable 4,000 Total 1,07,200 Additional information:

Dividend paid during the year was Rs.3,500 Provision for Tax made and paid Rs.2,000 You are required to Prepare Cash Flow Statement 2.Following are the comparative balance sheet of shobana ltd. As at 31st march 07. Liabilities (Rs.) 2006 Share capital 150000 Tax provision 24000 Bills payable 600 2007 150000 27000 900 Assets(rs). Cash Debtors Stock 2006 9900 30000 45000 2007 22800 33300 35100

Loan Long term 1800 General reserve 26000 Profit/loss a/c Creditors 19000 12000 ---------233400

1200 27000 19500 8100 --------233700

Machinery Land Building Goodwill

15000 60000 55500 18000 ---------233400 -----------

16500 54000 54000 18000 ---------------233700 ----------------

-------- ---------A piece of land has been sold for Rs.6000 Prepare a cash flow statement as per AS03.

The following additional information for the year:

3. From the following Balance Sheets of India Ltd. and the additional information given, Prepare Cash Flow Statement as per AS 3: Liabilities 31st March 2007 Equity sh.Capital Mortgage loan General Reserve Profit and loss A/c Proposed Dividend Creditors Bills Payable Provision for Tax 3,00,000 1,50,000 40,000 30,000 42,000 55,000 20,000 40,000 6,77,000 Addition Information: i) ii) iii) Depreciation of Rs.10,000 and Rs.20,000 has been charged on Plant and Land and Buildings respectively in 2007-08 The interim dividend of Rs.20,000 has been paid in 2007-08 Income tax of Rs.35,000 was paid during the year 2007-08 31st March 2008 4,00,000 Goodwill 70,000 Plant 48,000 Debtors 50,000 Stock 83,000 Bills Receivable 16,000 50,000 8,17,000 Cash in Hand Cash at Bank Assets 31st March 2007 1,15,000 80,000 1,60,000 77,000 20,000 15,000 10,000 6,77,000 31st March 2008 90,000 1,70,000 2,00,000 2,00,000 1,09,000 30,000 10,000 8,000 8,17,000

1,00,000 Land &Building 2,00,000