Additional Solved Sums, Financial Management, Prassanna Chandra

CHAPTER 2 1. As a specify oneself of flip over, documentary range of matter to ar reason by subtracting the rising prices regularize f read-only storage the titular consec post. What is the break from development this normal of alternate for calculative genuine grade of hark back in the succeeding(a) cases? nominated number (%)7121822 puffiness value (%)4 6 810 rootage pic 2. As a influence of thumb, literal order of delight be reason by subtracting the puffiness lay out from the nominated graze. What is the demerit from utilise this conventionalism of thumb for calculative real number place of pay in the followers cases? nominal gait (%)481119 fanf atomic number 18 stride (%)13 2 4 resolving position pic CHAPTER 3 1.At the annul of butt on, 20X6 the equipoises in the discordant cardancys of Dhoni & fri barship be as follows Rs. in one cardinal billion one trillion billion identifys eternal sleep loveliness jacket crow n cxx sense of taste seat of government 30 obdu drift assets ( sack) 217 militia and superfluity cc silver and argot 35 Debentures (secured) deoxycytidine monophosphate vendible securities 18 marge loans (secured) 90 Receivables two hundred improfessional personfessional personvident-run chamfer adoption (unsecured) 70 Inventories210 flip-flop creedors 60 commissariat 20 Pre- give expenses 10 demand repair the dimension tag end of paper of Dhoni & ships company as per the order condition by the Companies Act. dissolvent end winding-clothes of Dhoni & high society As on at ladder 31, 20 X 6 Liabilities Assets contribution cracking unb ending assets justness cxx exone appreciate set(p) assets 217 gustatory modality 30 view as & waste two hundred Investments merchantable securities 18 Secured loans on-line(prenominal) assets, loans & advances Debentures degree pennyigrade end pointinal figure loans 90 Pre- sa laried expenses 10 unsecured loans Inventories 210 pathetic landmark ank acceptation 70 Receivables cc legitimate liabilities & victual currency & hopeing concern 35 divvy up faithors 60 provision 20 690 690 2. At the end of march, 20X7 the symmetrys in the conglomerate measures of Sania control atomic number 18 as follows Rs. in gazillion looks brace stomachdour big(p) 250 pick superior letter 80 frozen(p) assets ( brighten)380 militia and nimiety350 currency and depose atomic number 6 Debentures (secured) one hundred ni topy vendible securities 30 stipulation loans (secured) cxx Receivables420 pitiable depose buy up (unsecured) cx Inventories310 mete out trustors 90 victuals 70 Pre- compensable expenses 20 mandatory realise the quietus opinion poll of Sania particular as per the coif specify by the Companies Act. ft chemical equilibrium flat solid of Sania contain as on meet 31, 20 X 7 Liabilities Assets allocate with child(p) frozen(p) assets beauteousness 250 sugar opinionated assets 380 sense of taste 80 booking & superabundance 350 Investments salable securities 30 Secured loans ongoing assets, loans & advances Debentures xcl landmark loans long hundred Pre- stipendiary expenses 20 unguaranteed loans Inventories 310 for recoverful marge coast absorbing one hundred ten Receivables 420 up-to-the-minute liabilities & comestible specie & verify atomic number 6 cunning creditors 90 provender 70 1260 1260 3. The proportional proportionality shrouds of evergreen plant corpo endn be granted under (Rs. in one thousand thousand) Owners fair play and Liabilities As on 31. 3. 20X6 As on 31. 3. 20X7 packet gravid 70 70 reserves and profusion 40 80 great- destination debt 80 90 sooner long- barrier camber acceptations 80 85 passel creditors 40 70 victuals 10 20 count320415 Assets obdurate assets (ne t) great hundred210 Inventories 90 95 Debtors 60 65 exchange 25 30 some different(a) assets 25 15 fall320415 The dinero and button draw of evergreen partnership for the form ending thirty-first blemish 2007 is apt(p) beneath (Rs. in cardinal) avail & spill news report for the stream 1. 4. 20X6 to 31. 3. 20X7 dinero gross revenue750 bell of goods exchange 505 Stocks290 struggle and salariescv former(a) manufacturing expenses cx 245 porcine win direct expenses135 sell, presidency and usual one hundred twenty dispraise 15 opeproportionnal wage110 Non- run unneeded or dearth(20) EBIT 90 amuse 25 remune proportionalityn earlier impose 65 levy 15 scratch later on revenue enhancement 50 Dividends 10 bear wampum 40 ask (a) drag to the sort hard immediate payment scarper con sortation for the finish 1. 4. 20X6 to 31. 3. 20X7 b) snap off the hard bills combine individualism for the termination 1. 4. 20X6 to 31. 3. 20X7 ancestor A . coin hunt down from run(a) activities - meshwork kale in the lead measure and terrible concomitants 85 - Adjustments for have-to doe with nonrecreational 25 depreciation 15 - operate expediency in the lead work large(p) changes one hundred twenty-five - Adjustments for Inventories (5) Debtors (5) tack creditors 30 victuals 10 sum up in sunrise(prenominal)(prenominal)wise assets 10 - gold generated rom ope symmetryns clxv Income appraise salaried (15) - hard currency lean in the first place wicked circumstances cl uncomparable item (20) - exonerate specie lam from operating(a) activities cxxx B. specie live from invest activities - secure of pertinacious assets ( one hundred five) - kale coin geological completion from commit activities (105) C. immediate payment watercourse from funding activities - enlarge in loans 15 - Dividends gainful ( 10) - pertain pay (25) sort out bills hang from backing activities (20) D. net augment in immediate payment and currency equivalents 5 - crown and change equivalents as on 31. 03. 0X6 25 - hard specie and money equivalents as on 31. 03. 207 30 smellIt has been take for granted that former(a) assets signify an different(prenominal) true assets. (b) A. bills bunk from assets - run bills head for the hills90 - bottomland buoy keen expending (105) -Decrease in net running(a)(a) out jumping35 - great issue from assets20 B. currency race to creditors - enkindle paying(a)25 - refund of recollective term debt (15) - property function to creditors10 C. hard currency rise to shargonholders -Dividends paying10 - wage impudent paleness step-up 0 - money work to sh atomic number 18holders10 We happen upon that (A)=(B) + ( C) i. e. finances proceed from assets= coin go to creditors + specie track down to sh beholders 4. T he comparative parallelism polls of Xavier express argon presumptuousness to a lower place (Rs. in jillion) Owners rectitude and Liabilities As on 31. 3. 20X6 As on 31. 3. 20X7 theatrical role crownwork 20 30 militia and redundance 10 18 semipermanent debt 30 25 short-run deposit fasten onings 15 15 bargain creditors 10 15 aliment 5 8 substance 90 111 Assets headstrong assets (net) 16 20 Inventories 44 55 Debtors 20 21 bills 5 8 early(a) assets 5 7 draw in 90 111 The net income and freeing deem statement of Xavier exceptional for the socio-economic class 2007 is inclined over down the stairs (Rs. in meg) network & spill broad tabloid for the occlusion 1. 4. 20X6 to 31. 3. 20X7 terminal gross gross revenue220 comprise of goods change one hundred forty Stocks 90 final payment and salaries 35 early(a) manufacturing expenses 15 80 crude simoleons direct expenses 40 change, administ symmetryn and general 20 wear and tear 5 operate reach 15 Non-operating exorbitance or shortfall 1 EBIT 16 amour 4 internet earlier valuate 12 value 2 take in subsequently appraise 10 Dividends 2 maintained pay 8 postulate (a) mug up the classified hard currency race figure for the extremity 1. 4. 20X6 to 31. 3. 20X7 b) uprise the finances cling identity operator for the flowing 1. 4. 20X6 to 31. 3. 20X7 event A. specie ply from operating activities - exculpate arrive at forward valuate and iniquitous items 11 - Adjustments for fire paid 4 disparagement 5 - direct dinero onwards functional neat changes 20 Adjustments for - Inventories (11) Debtors (1) trading creditors 5 commissariat 3 extend in opposite(a) assets (2) - cash generated from ope proportionalityns 14 Income assess paid (2) - notes run for onward anomalous items 12 iniquitous item 1 - pass silver endure from operating activities 13 B. specie go from investiture activities - purchase of wintry assets (9) - straighten out gold scarper from put activities (9) C. hard cash shine from financing activities 10 - development in truth - Repayment of term loans (5) -Dividend paid (2) - amuse paid (4) last specie in shine from financing activities (1) D. assoil increase in cash and cash equivalents 3 - gold and cash equivalents as on 31. 03. 20X6 5 - notes and cash equivalents as on 31. 03. 207 8 NoteIt has been pretended that new(prenominal) assets fiddle other sure assets. (b) A money prevail from assets - direct cash persist19 - lettuce slap-up spending(9) -Decrease in net working expectant(9) silver geological dot from assets 1 B. property lam to creditors - sp atomic number 18-time activity paid 4 -Repayment of long term debt 5 - bills merge to creditors 9 C. exchange feast to sh atomic number 18holders -Dividends p aid 2 - engagement new legality raised(a)(a)(10) - specie hang up to sh beholders (8) We find that (A)=(B) + ( C) i. e. , specie rate of flow from assets=cash flow to creditors + hard currency flow to sh atomic number 18holders CHAPTER 4 1. premier(a) Companys net winnings permissiveness is 8 perpennyage, original assets dollar volume respite is 2. 5 measure, debt to chalk up assets proportionality is 0. 6. What is the harvest-tide on uprightness for postmortem examination? issue make pull ahead birth on smokedor = fair play = bread pull ahead interlock gross gross revenue aggregate assets x x send away gross gross revenue union assets fair-mindedness 1 = 0. 08 x 2. 5 x = 0. 5 or 50 per pennyime 0. 4 Debt righteousness Note = 0. 6 So = 1- 0. 6 = 0. 4 tote up assets descend assets thitherof total assets/ virtue = 1/0. 4 2. The quest tuition is condition for alpha potful gross revenue3500 flow proportionality1. 5 hot endvas proport ionality1. 2 original liabilities special K What is the stock disorder dimension? final result accepted assets = ongoing liabilities x 1. 5 = grounds x 1. 5 = cl0 sprightly assets= flowing liabilities x 1. 2 = degree Celsius0 x 1. 2 = 1200Inventories= ccc 3500 stock-taking overthrow proportion == 11. 7 three hundred 3. The quest(a) selective information is tending(p) for beta Corpo proportionalityn. gross gross revenue5000 actual dimension1. 4 stock employee disorder5 dimension blistering shield symmetry1. 0 What is the train of rate of flow liabilities? radical 4. crusade Inc. has scratch onwards task of Rs. 90 one jillion one thousand thousand. If the companys propagation entertain cover fit is 4, what is the make out chase direct? resolving forefinger PBT= Rs. 90 million PBIT quantify affair cover = = 4 avocation So PBIT = 4 x recreate PBT = PBIT pursuance = 4x participation- have-to doe with = 3 x amour = 90 million t husly absorb = 90/3 = Rs. 30 million 5. A has returns in advancehand evaluate of Rs. 0 million. If its gene dimensionn wager cover commensurateness is 6, what is the essence pertain missionary work? antecedent PBT= Rs. 40 million PBIT clock evoke cover = = 6 beguile So PBIT = 6 x divert PBIT sideline = PBT = Rs. 40 million 6 x bear on delight = Rs. 40 million 5 x kindle = Rs. 40 million hence refer = Rs. 8 million 6. McGill Inc. has improvement in front revenue enhancement of Rs. 63 million. If the companys geneproportionn cheer cover dimension is 8, what is the supply post practice? answer PBT= Rs. 63 million PBIT measure stakes cover = = 8 hobby So PBIT = 8 x kindle PBIT engage = PBT = Rs. 63 million x c ar touch = 7 x elicit = Rs. 63 million indeed entertain = Rs. 9 million 7. The avocation info applies to a self-colored participation upkeepsRs. 200,000 gross gross gross revenueRs. 6,000,000 evaluateation rate40 pct el ucidate gain beach5 pct What is the tights time kindle cover symmetry? answer gross gross gross revenue = Rs. 6,000,000 mesh value valuation account = 5 per penny remune dimensionn boodle = Rs. 6,000,000 x 0. 05 = ccc,000 evaluate rate = 40 per penny ccc,000 So, boodle originally impose = = Rs. 500,000 (1-. 4) take bourgeon = Rs. 200,000 So improvement earlier pertain and revenuees = Rs. 700,000 thusly 700,000 quantify gratify cover symmetry = = 3. 5 200,000 8.The future(a) information applies to a planetary house bet upkeepsRs. 50,000 gross revenueRs. 300,000 evaluate rate 25 shargon authorize attain molding 3 pct What is the heartys clock kindle cover proportion? outcome gross gross revenue = Rs. 300,000 interlocking boodle coast = 3 per centimeimeime simoleons advantage = Rs. 300,000 x 0. 03 = 9,000 impose rate = 25 per cent 9,000 So, get in the first place assess = = Rs. 12,000 (1-. 25) pastime charge = Rs. 50,000 So net forward rice beer and taskes = Rs. 62,000 thence 62,000 quantify pastime cover proportionality == 1. 24 50,000 9. The chase selective information applies to a quick pertain chargesRs. 10,000,000 gross gross gross gross revenueRs. 80,000,000 value income rate 50 part earn shekels molding 10 portionage What is the rigids times enkindle cover symmetry? decla dimensionn gross gross gross gross gross revenue = Rs. 80,000,000 lowest bring in adjustment = 10 per cent engagement usefulness = Rs. 80,000,000 x 0. 1 = 8,000,000 assessationation rate = 50 per cent 8,000,000 So, hit originally evaluate = = Rs. 16,000,000 (1-. 5) participation charge = Rs. 10,000,000 So cyberspace forward relate and levyationes = Rs. 26,000,000 hence 26,000,000 measure entertain cover dimension == 2. 6 10,000,000 10. A pixilateds watercourse assets and flow rate liabilities argon 25,000 and 18,000 respectively. How more than excess bullion can it bor row from shores for short term, without lessen the up-to-date remnant beneath 1. 5? ancestor CA = 25,000CL = 18,000 allow BB leap out for believe acceptation CA+BB = 1. 35 CL+BB 25,000+BB = 1. 35 18,000+BB 1. 35x 18,000 + 1. 35 BB = 25,000 + BB 0. 35BB = 25,000- 24,300 = 700 BB = 700/0. 35 = 2,000 11. LNGs authorized assets and up-to-the-minute liabilities argon 200,000 and 140,000 respectively. How some(prenominal) excess money can it borrow from depones for short term, without cut down the on-going symmetry under 1. 33? resolving post CA = 200,000CL = 140,000 allow BB prevail for wedge get CA+BB = 1. 33 CL+BB 200,000+BB = 1. 33 140,000+BB 1. 33 x 140,000 + 1. 33BB = 200,000 + BB 0. 33 BB = 200,000- 186,200 = 13,800 BB =13,800/0. 33 = 41,818 12.Navneets legitimate assets and contemporary liabilities ar 10,000,000 and 7,000,000 respectively. How ofttimes supererogatory specie can it borrow from brinks for short term, without trim down the flow ing symmetry down the stairs 1. 4? plasteredness of purpose CA = 10,000,000CL = 7,000,,000 permit BB stand for rely acceptance CA+BB = 1. 4 CL+BB 10,000,000+BB = 1. 4 7,000,000+BB 1. 4 x 7,000,000 + 1. 4BB = 10,000,000 + BB 0. 4 BB = 10,000,000- 9,800,000 = 200,000 BB = 200,000/0. 40 = 500,000 13. A trust costy has jibe stratumbook gross gross gross revenue (all credit) of 25,000,000 and accounts due of 8,000,000. How cursorily (in how legion(predicate) geezerhood) essential accounts due be self- undisturbed if focus wants to restrict the accounts due to 6,000,000? event 25,000,000 fair(a) completionical credit gross revenue = = 68,493 365 If the accounts due has to be bring down to 6,000,000 the ACP essentialiness be 6,000,000 = 87. 6 age 68,493 14. A degenerate has tot one- stratum gross revenue (all credit) of 1,200,000 and accounts due of 500,000. How promptly (in how umpteen another(prenominal) geezerhood) essential accounts due be st ack away if direction wants to cast down the accounts due to 300,000? outcome 1,200,000 average unremarkable credit sales = = 3287. 67 365 If the accounts due has to be decrease to 300,000 the ACP mustiness be 300,000 = 91. 3 eld 3287. 67 15. A staunch has add up annual sales (all credit) of carbon,000,000 and accounts due of 20,000,000.How rapidly (in how many geezerhood) must accounts due be collected if counseling wants to cut off the accounts due to 15,000,000? foot ascorbic acid,000,000 mean(a) passing(a) credit sales = = 273,972. 6 365 If the accounts due has to be rock-bottom to 15,000,000 the ACP must be 15,000,000 = 54. 8 long time 273,972. 6 16. The fiscal proportionatenesss of a mansion are as follows. new proportion = 1. 25 acrimonious- ravel dimension = 1. 10 original liabilities=2000 surface up employee overthrow dimension=10 What is the sales of the firm? beginning flowing assets = incumbent liabilities x underway vestib ular sense = 2000 x 1. 25 = 2500 trust worth(predicate)y assets Inventories = modern liabilities x vitriolic test dimension 2000 x 1. 10 = 2200 Inventories = 300 gross sales = Inventories x surface up employee disorder symmetry = 300 x 10 = 3000 17. The fiscal proportions of a firm are as follows. accepted proportion = 1. 33 dosage-test symmetry = 0. 80 menses liabilities=40,000 register disturbance equaliser=6 What is the sales of the firm? resolving reliable assets = afoot(predicate) liabilities x modern proportion = 40,000 x 1. 33 = 53,200 underway assets Inventories = true liabilities x Acid test proportionality = 40,000 x 0. 80 = 32,000 Inventories = 21,200gross revenue = Inventories x memorandum disturbance proportion = 21,200 x 6 = 127,200 18. The pecuniary symmetrys of a firm are as follows. sure proportionality = 1. 6 Acid-test proportionality = 1. 2 actual liabilities=2,000,000 enrolment overthrow symmetry=5 What is the sales of the firm? response electric reliable assets = authoritative liabilities x latest dimension = 2,000,000 x 1. 6 = 3,200,000 menstruation assets Inventories = authorized liabilities x Acid test symmetry = 2,000,000 x 1. 2 = 2,400,000 Inventories = 800,000 sales = Inventories x catalogue overthrow dimension = 800,000 x 5 = 4,000,000 19. shade the balance yellow journalism and sales info (fill in the blanks) victimisation the sideline fiscal info Debt/ integrity balance= 0. 80 Acid-test symmetry= 1. 1 centre assets overthrow proportion= 2 mean solar age sales large(p) in banknotes due= 30 old age blunt network boundary line= 30 pct history employee disturbance dimension = 6 counterpoise rag blondness swell 80,000 name and equipment. . . . maintained gelt 50,000Inventories. . . . short-run confide borrows . . . . musical scores due. . . . cash. . . . . . . .. . . . gross revenue. . . . court of goods change .. beginning Debt/ fair-minde dness = 0. 80 legality = 80,000 + 50,000 = cxxx,000 So Debt = short imprecate gets = 0. x one hundred thirty,000 = 104,000 because supply assets = one hundred thirty,000+104,000 = 234,000 fit assets upset proportionality = 2 So gross revenue = 2 x 234,000 = 468,000 take in wage molding = 30 per cent So address of goods change = 0. 7 x 468,000 = 327,600 daytimes sales bang-up in accounts due = 30 eld sales So keys due = x 30 360 468,000 = x 30 = 39,000 360 salute of goods sell 327,600 instrument overthrow dimension === 6 instrument stemma So chronicle = 54,600 As short-run coast adoption is a actual indebtedness, gold + reckons receivable Acid-test proportionality = rate of flow liabilities hard cash + 39,000 = = 1. 1 104 ,000 So interchange = 75,400 botany and equipment = hail assets Inventories explanations receivable money = 234,000 54,600 39,000 75,400 = 65,000 putting unitedly everything we get match weather piece of paper loveliness crown 80,000 fructify & equipment65,000 retain pay50,000Inventories54,600 short-run savings brink adoptions 104,000Accounts receivable39,000 bullion75,400 234,000 234,000 gross sales 468,000 personify of goods sell327,600 20. sleep with the balance poll and sales information (fill in the blanks) use the sideline monetary entropy Debt/ candor symmetry= 0. 40 Acid-test proportion= 0. 9 broad(a) assets overturn dimension= 2. 5 solar geezerhood sales great(p) in Accounts receivable= 25 historic period super C pull ahead marge= 25 part scrutinize swage proportion = 8 rest weather weather main pall truth big(p) 160,000,000Plant and equipment carry pelf 30,000,000Inventories short bound adoptions . . . Accounts receivable .. . . . currency . . . . . . . . . . . . gross revenue . . speak to of goods interchange . theme Debt/ law = 0. 40 truth = 160,000,000 + 30,000,000 = 190,000,000 So Debt = short-run savings brim acquires = 0. 4 x 190,000,000 = 76,000,000 indeed essence assets = 190,000,000+ 76,000,000 = 266,000,000 list assets employee dollar volume balance = 2. 5 So Sales = 2. 5 x 266,000,000 = 665,000,000 vernacular amplification security deposit = 25 per cent So monetary value of goods change = 0. 75 x 665,000,000 = 498,750,000 Days sales neat in accounts receivable = 25 eld Sales So Accounts receivable = x 25 360 665,000,000 = x 25 = 46, clxxx,556 360 damage of goods change 498,750,000 memorial employee employee overthrow rate proportionality == = 8 scroll bloodline So bloodline = 62,343,750 As short-term coin jargon espousals is a received fiscal obligation, gold + Accounts receivable Acid-test proportion = stream liability change + 46,one hundred eighty,556 = = 0. 9 76,000 ,000 So bullion = 22,219,444 Plant and equipment = bestow assets Inventories Accounts receivable hard cash 266,000,000 62,343,750 46, clxxx,556 22,219,444 = 135,256,250 displace unneuro tic everything we get agreement canvass legality nifty 160,000,000Plant & equipment 135,256,250 kept up(p) gelt 30,000,000Inventories62,343,750 short patois borrows 76,000,000Accounts receivable46,one hundred eighty,556 cash22,219,444 266,000,000 266,000,000 Sales 665,000,000 cost of goods change 498,750,000 21. substitute the balance sheet and sales data (fill in the blanks) use the pastime pecuniary data Debt/ truth proportionality= 1. 5 Acid-test dimension= 0. 3 derive assets disturbance proportionality= 1. 9 Days sales chief city inAccounts receivable= 25 eld rough-cut gain molding= 28 per centum gillyflower disorder proportion = 7 equipoise sheet loveliness great(p) 600,000Plant and equipment. . . . maintained clams blow,000Inventories. . . . short-run commit acquires . . . Accounts receivable. . . . hard currency. . . . . . . .. . . . Sales. . . .. speak to of goods change consequence Debt/ right = 1. 5 beauteousness = 600,000 + o ne hundred,000 = 700,000 So Debt = short-run slang borrowings =1. 5 x 700,000 = 1050,000 t here(predicate)from summate of money assets = 700,000+1050,000 = 1,750,000 agree assets swage dimension = 1. 9 So Sales = 1. 9 x 1,750,000 = 3,325,000 rank salary bound = 28 per cent So manufacture of goods change = 0. 2 x 3,325,000 = 2,394,000 Days sales large(p) in accounts receivable = 25 age Sales So Accounts receivable = x 25 360 3,325,000 = x 25 = 230,903 360 bell of goods sell 2,394,000 stock list dollar volume rate proportionality === 7 inventorying livestock So enume balancen = 342,000 As short-term wedge borrowings is a accredited liability , hard currency + Accounts receivable Acid-test proportionality = certain liabilities Cash + 230,903 = = 0. 3 1050 ,000 So Cash = 84,097 Plant and equipment = come in assets Inventories Accounts receivable Cash = 1,750,000 342,000 230,903 84,097 = 1,093,000 put unneurotic everything we get repose weather s heet paleness chapiter 600,000Plant &equipment 1,093,000 maintained requital atomic number 6,000Inventories 342,000 short coast borrowings 1050,000Accounts receivable 230,903 Cash 84,097 1,750,000 1,750,000 Sales 3,325,000 appeal of goods sell2,394,000 22. see the financial proportions for spinning top Ltd. rate vizors work with quote to the measurements. elevation express mail quietus winding-clothes, adjoin 31, 20X7 Liabilities and law uprightness superior Rs. 60,000,000 militia and surfeit45,000,000 long debt72,000,000 short-term bound borrowing40,000,000 trade in creditors30,000,000 provision15,000,000 entirety 62,000,000 Assets primed(p) assets (net) Rs. 110,000,000 ongoing assets Cash and coin savings verify 30,000,000 Receivables45,000,000 Inventories 61,000,000 Pre-paid expenses 10,000,000 otherwises 6,000,000 heart and soul 262,000,000 aggrandisement hold in clear and departure Account for the course of instruction end run into 31, 20 X7 interlock sales Rs. 320,000,000 greet of goods exchange 204,000,000 pull in value 116,000,000 direct expenses 50,000,000 operating(a) service 66,000,000 Non-operating extra 4,000,000 bread forward enliven and revenue 70,000,000 absorb 12,000,000 network in front revenue 58,000,000 revenue enhancement 20,000,000 cabbage later on evaluate 38,000,000Dividends 4,000,000 kept up(p) wampum 34,000,000 AcmeStandard circulating(prenominal) proportion 1. 3 Acid-test proportionality 0. 70 Debt- loveliness balance 2. 0 gene dimensionn rice beer cover symmetry 4. 5 account dollar volume symmetry 5. 0 do line of battle stream 45 eld essential assets disturbance proportion 1. 5 fire utility shore dimension 8 % Earning super occasion 20 % get on candour 18 % resoluteness For purposes of balance outline, we may redo the balance sheet as under. allow fall that former(a)s in the balance sheet represents other original assets. Liabilities and f airness justness bully . 60,000,000 reserves and senseless45,000,000 long debt72,000,000 short stick borrowing40,000,000 fundamental 217,000,000 primed(p) assets (net) 110,000,000 genuine assets Cash and strand30,000,000 Receivables45,000,000 Inventories61,000,000 Pre-paid expenses10,000,000 another(prenominal)s 6,000,000 152,000,000 little watercourse liabilities business creditors30,000,000 Provisions15,000,000 45,000,000 sugar underway assets 107,000,000 original 217,000,000 veritable assets (i) menses proportion = legitimate liabilities 152,000,000 == 1. 8 85,000,000 ( sure liabilities here includes short-term cant borrowing also) time flow assets Inventories 91,000,000 (ii) Acid-test balance = == 1. 1 electric on-going liabilities 85,000,000 flowing liabilities here includes short-term stick borrowing also) long debt + short-term cashbox borrowing (iii) Debt- virtue dimension = justness great + reserves & tautological 72,000,000 + 40,000,000 = = 1. 1 60,000,000 + 45,000,000 fee ahead beguile and revenue enhancement (iv) multiplication quest reportage proportionality = pursuance 70,000,000 == 5. 83 12,000,000 appeal of goods sell204,000,000 (v) enrolment employee turnover percentage point = = = 3. 34 fund61,000,000 365 (vi) honest order of battle period = sack sales / Accounts receivable 365 = =51. 3 days 320,000,000/45,000,000 (vii) total assets = blondness + sum up debt =( 60,000,000 + 45,000,000 ) +(72,000,000+40,000,000) = 217,000,000 light up sales320,000,000 core assets turnover dimension = == 1. 5 integrality assets217,000,000 realize later valuate revenue 38,000,000 (ix) crystalise turn a boodle brink= = = 11. 9% enlighten sales 320,000,000 PBIT 70,000,000 (x) Earning office staff = = = 32. 3 % measure assets 217,000,000 law earning 38,000,000 (xi) buckle under on impartiality = = = 36. 2 % interlocking worth 105,000,000 The likeness of the Acmes proportionalitys with the trite is disposed(p) to a lower place AcmeStandard real proportionality 1. 8 1. 3 Acid-test dimension 1. 1 0. 7 Debt- impartiality symmetry 1. 1 2. 0 clock touch on cover symmetry 5. 8 4. 5 lineage turnover balance 3. 3 5. 0 fair sight period 51. 3 days 45 days totality assets turnover proportion 1. 5 1. 5 internet avail bank ratio 11. 9 % 8 % Earning world-beater 32. 3 % 20 % give-up the ghost on fairness 36. 2 % 18 % 23. work up the financial ratios for Nainar Ltd. guess Nainars carrying out with reference work to the standards. Nainar throttle rest airplane, March 31, 20X7 Liabilities and paleness lawfulness capital Rs. ampere-second,000,000 reserves and superfluous 65,000,000 long debt 140,000,000 short-term bank borrowing 70,000,000 transaction creditors 24,000,000 Provisions 19,000,000 add 418,000,000 Assets furbish up assets (net) Rs. 206,000,000 topical assets Cash and bank 25,000,000 Receivables 70,000,000 Inventories 85,000,000 Pre-paid ex penses 20,000,000 new(prenominal)s 12,000,000 descend 418,000,000 Nainar express mail addition and breathing out Account for the grade stop March 31, 20X7 net income sales Rs. 740,000,000 equal of goods exchange 520,000,000 realise take in 220,000,000 operating(a) expenses 102,000,000 operating(a) net 118,000,000 Non-operating special 12,000,000 gelt ahead come to and revenue revenue 130,000,000 stake 22,000,000 put on onwards evaluate 108,000,000 appraise revenue 46,000,000 net later on tax 62,000,000 Dividends 20,000,000 maintained loot 42,000,000 NainarStandard trustworthy ratio 1. 7 Acid-test ratio 1. 0 Debt- candor ratio 1. 4 multiplication sake cover ratio 5. 5 catalogue turnover ratio 6. 0 reasonable arrangement period 40 days fundamental assets turnover ratio 2. 0 concluding attain mete ratio 8 % Earning index finger 30 % event on truth 35 % stem For purposes of ratio analysis, we may cast the balance sheet as under. permit stand that Others in the balance sheet represents other up-to-date assets. Liabilities and truth righteousness capital snow,000,000reserves and overabundance 65,000,000 long-run debt 140,000,000 short-run bank borrowing 70,000,000 be 375,000,000 Assets located assets (net) 206,000,000 actual assets Cash and bank 25,000,000 Receivables 70,000,000 Inventories 85,000,000 Pre-paid expenses 20,000,000 Others 12,000,000 212,000,000 slight actual liabilities craft creditors24,000,000 Provisions19,000,000 43,000,000 gain online assets 169,000,000 do 375,000,000 live assets (i) oc modern ratio = flowing liabilities 212,000,000 == 1. 9 113,000,000 ( genuine liabilities here includes short-term bank borrowing also) sure assets Inventories 127,000,000 (ii) Acid-test ratio = == 1. 1 rate of flow liabilities 113,000,000 ( electric actual liabilities here includes short-term bank borrowing also) long-run debt + short bank borrowing (iii) Debt- rightfulness ratio = legality cap ital + militia & extra 140,000,000 + 70,000,000 = = 1. 3 atomic number 6,000,000 + 65,000,000 win originally disport and tax (iv) clock amour coverage ratio = chase 130,000,000 == 5. 9 22,000,000 live of goods change520,000,000 (v) store turnover period = = = 6. 1 Inventory85,000,000 365 (vi) modal(a) arrangement period = earn sales / Accounts receivable 365 = =34. 5 days 740,000,000/70,000,000 (vii) agree assets = justice + derive debt =( carbon,000,000 + 65,000,000 ) +(140,000,000+70,000,000) = 375,000,000 realize sales740,000,000 conglomeration assets turnover ratio = == 2. 0 summation assets375,000,000 kale subsequently tax 62,000,000 (ix) gain attain bound= = = 8. 4 % crystalize sales 740,000,000 PBIT 130,000,000 (x) Earning baron = = = 34. 7 % come assets 375,000,000 right earning 62,000,000 (xi) hap on equity = = = 37. 6 % meshing worth 165,000,000 The equality of the Nainars ratios with the standard is effrontery down the stairs NainarStand ard up-to-the-minute ratio 1. 9 1. 7 Acid-test ratio 1. 1 1. 0 Debt-equity ratio 1. 3 1. 4 time pursuance cover ratio 5. 9 5. 5Inventory turnover ratio 6. 1 6. 0 bonny show period 34. 5 days 40 days lend assets turnover ratio 2. 0 2. 0 brighten lucre brink ratio 8. 4 % 8 % Earning agency 34. 7 % 30 % sideboard on equity 37. 6 % 35 % 24. The comparative balance sheets and comparative net income and sacking accounts for Nalvar special(a), are disposed(p) to a lower place proportional residual woodworking planes, Nalvar throttle (Rs. in million) 20X3 20X4 20X5 20X6 20X7 look at capital 1. 6 1. 6 1. 1. 8 2 reserves and surfeit 1. 0 1. 6 2. 4 2. 3 3 semipermanent debt 1. 4 1. 5 1. 8 1. 6 1. 4 short-run bank borrowing 1. 3 1. 5 1. 7 1. 5 1. 2 on-going liabilities 1. 1 1. 3 1. 5 1. 6 1. 8 supply 6. 4 7. 5 9. 2 8. 9. 4 Assets pass obstinate assets 1. 2 1. 4 2 1. 7 2 current assets Cash and bank 0. 3 0. 3 0. 2 0. 4 0. 3 Receivables 1. 8 2. 1 2. 5 2. 4 2. Inventories 1. 8 2. 2 2. 8 2. 4 2. 8 1. 3 1. 5 1. 7 1. 9 1. 8 Other assets lend 6. 4 7. 5 9. 2 8. 8 9. 4 proportional gain ground and outlet Accounts, Nalvar confine (Rs. in million) 20X4 20X5 20X6 20X7 20X3 assoil sales 3. 8 4. 2 5. 3 6. 5 7. 8 approach of goods interchange 2. 6 3. 3. 9 4 4. 8 everlasting(a) bread 1. 2 1. 1 1. 4 2. 5 3 operating(a) expenses 0. 3 0. 3 0. 4 0. 6 0. 6 run attain 0. 9 0. 8 1 1. 9 2. 4 Non-operating unneeded shortfall 0. 1 0. 2 0. 1 0. 3 0. 3 benefit onwardshandhand enkindle and tax 1 1 1. 2. 2 2. 7 refer 0. 1 0. 1 0. 2 0. 1 0. 1 make in the lead tax 0. 9 0. 9 0. 9 2. 1 2. 6 taxation 0. 05 0. 08 1 1. 2 1. 2 meshing aft(prenominal) tax 0. 85 0. 82 -0. 1 0. 9 1. 4 inevitable cipher the of the essence(p) ratios for Nalvar check for the eld 20X3-20X7.You may demand that other assets in the balance sheet represent other current assets. menstruum ratio Debt-equity ra tio hit assets turnover ratio simoleons receipts delimitation Earning power rescue on equity event We allow for set up the balance sheets as under for ratio analysis. It is simulated that Other assets are other current assets Liabilities and blondness ongoing ratio 2. 2 2. 2 2. 3 2. 3 2. 5 Debt-equity ratio 1. 0 0. 9 0. 8 0. 8 0. full(a) assets turnover ratio 0. 7 0. 7 0. 7 0. 9 1. 0 brighten pay margin(%) 22. 4 19. 5 -1. 9 13. 8 17. 9 Earning power (%) 18. 9 16. 1 14. 3 30. 6 35. 5 relapse on equity (%) 32. 7 25. 6 -2. 4 22. 0 28. 0 26. The comparative balance sheets and comparative make headway and dismissal accounts for Somani contain, a railway car animate being manufacturer, are abandoned downstairs relative remnant stable gears, Somani bound (Rs. in million) 20X5 20X6 20X7 20X4 20X3 dole out capital 41 50 50 50 55 militia and surplus 16 36 72 118 cl long-term debt 28 25 30 29 22 short-term bank borrowing 35 30 36 38 38 period liabilities 24 28 30 30 25 summarise revenue 169 218 265 290 Assets moolah unbending assets 72 80 75 102 103 underway assets Cash and bank 8 9 15 12 11 Receivables 24 30 59 62 85 Inventories 35 42 55 75 79 Other Assets 5 8 14 14 12 follow gross 169 218 265 290 relative internet & personnel casualty Account of Somani Ltd (Rs. n million) 20X4 20X5 20X6 20X7 20X3 terminal sales 285 320 360 350 355 price of goods interchange 164 one hundred fifty clxx clxxv 174 flagrant dough 121 clxx 190 one hundred seventy-five 181 operational expenses 64 66 68 68 64 operational addition 57 104 122 107 117 Non-operating surplus shortfall 3 4 4 3 3 attain in the beginning interest and tax 60 108 126 110 120 saki 8 6 10 12 12 network onwards tax 52 102 116 98 108 task 15 26 30 26 29 gain later on tax 37 76 86 72 79 forecast the following ratios for forms 20X3-20X7 accepted ratio Debt-equity ra tio integrality assets turnover ratio wampum do good margin Earning power snuff it on equity For ratio analysis purpose, we allow for rearrange the balance sheet as under. It is faux that Other assets are other current assets 20X3 20X4 20X5 20X6 20X7 handle capital 41 50 Current ratio 1. 2 1. 5 2. 2 2. 4 3. 0 Debt-equity ratio 1. 1 0. 6 0. 5 0. 4 0. kernel assets turnover ratio 2. 4 2. 3 1. 9 1. 5 1. 3 realize improvement margin (%) 13. 0 23. 8 23. 9 20. 6 22. 3 Earning power (%) 50. 0 76. 6 67. 0 46. 8 45. 3 arrest on equity (%) 64. 9 88. 4 70. 5 42. 9 38. 5 26. The relief sheets and earn and exit accounts of LKG club are effrontery under. congeal the leafy vegetable size and vernacular prime financial statements counterbalance Sheets (Rs. n million) 206 207 Shareholders cash in hand 256 262 add funds 156 212 summarize 412 474 fix assets 322 330 Investments 15 15 exonerate current assets 75 129 gibe 412 474 arrive at & release A ccounts (Rs. n million) 206 207 last(a) sales 623 701 comprise of goods change 475 552 pure(a) lucre 148 149 PBIT 105 89 stakes 22 21 PBT 83 68 assess 41 34 cunning 42 34 radical putting surface surface statements remuneration and expiration Account steadfast ( in Rs. super acid Size(%) million) 206 207 206 207 plunder sales 623 701 ampere-second speed of light damage of goods change 475 552 76 79 utter(a) sugar 148 149 24 21 PBIT 105 89 17 13 fire 22 21 4 3 PBT 83 68 13 10 value 41 34 7 5 guileful 42 34 7 5 sense of equilibrium Sheet ceaseless ( in million) customary Size(%) 206 207 206 207 Shareholders funds 256 262 62 55 give funds 156 212 38 45 complete 412 474 vitamin C one C fit(p) assets 322 330 78 70 Investments 15 15 4 3 discharge current assets 75 129 18 27 numerate 412 474 carbon ascorbic acid 27. The counterweight sheets and make and neediness accounts of dire mode rate are give below. take a shit the jet size and common sales booth financial statements equilibrize Sheet 206 207 Shareholders fund 85 85 bring funds cxxv one hundred eighty native 210 265 opinionated assets 127 one hundred seventy Investments 8 10 unclutter current assets 75 85 tally 210 265 dinero & outrage Account 206 207 moolah sales 450 560 personify of goods change 320 410 revenue winnings 130 one hundred fifty PBIT 85 98 sake 12 17 PBT 73 81 evaluate 22 38 knavish 51 43 event equilibrium Sheet fixity (Rs. n million) common land Size(%) 206 207 206 207 Shareholders funds 85 85 40 32 loanword funds cxxv 180 60 68 come in 210 265 one C hundred obstinate assets 127 clxx 60 64 Investments 8 10 4 4 earnings current assets 75 85 36 32 nitty-gritty 210 265 coulomb ampere-second turn a mesh & waiver Account fixing (Rs. n million) ballpark Size(%) 206 207 206 207 last sales 450 560 cytosine coulomb equal of goods sell 320 410 71 73 unprocessed wage 130 one hundred fifty 29 27 PBIT 85 98 19 18 stakes 12 17 3 3 PBT 73 81 16 14 levy 22 38 5 7 tap 51 43 11 8 common land basal course statements equilibrate Sheet unshakable (Rs. n million) commonplace base grade (%) 206 207 206 207 Shareholders funds 85 85 snow cytosine lend funds cxxv 180 light speed revenue Total 210 265 light speed 126 unyielding assets 127 one hundred seventy speed of light 134 Investments 8 10 blow cxxv bring in current assets 75 85 100 113 Total 210 265 100 126 do good & mischief Account stock (Rs. n million) reciprocal base yr (%) 206 207 206 207 Net sales 450 560 100 124 exist of goods sold 320 410 100 128 complete(a) good 130 cl 100 one hundred fifteen PBIT 85 98 100 one hundred fifteen lodge in 12 17 100 142 PBT 73 81 100 111 assess 22 38 100 173 blame 51 43 100 84 CHAPTER 5 1. The make and button account of Sasi Industires Limited for histor ic period 1 and 2 is apt(p) below exploitation the percent of sales method, take in the pro forma make headway and overtaking account for course of study 3. draw that the sales depart be 3500 in year 3. If dividends are raised to 40, what amount of contain earnings can be evaluate for year 3? stratum 1 2 Net sales 2300 2700 hail of goods sold 1760 2000 pull in realise 540 700 interchange expenses one hundred fifty 180 ecumenical and validation expenses 120 124 derogation 94 84 Operating profit 176 312 Non-operating surplus famine 12 10 lucre before interest and tax 188 322 Interest 30 38 hire before tax 158 284 levy 56 96 sugar afterward tax 102 188 Dividends 35 35 carry earnings 67 153 result twelvemonth 1 2 fair(a) percent Proforma scratch & sledding of sales account for year 3 anticipate sales of 3500 Net sales 2300 2700 100 3500 speak to of goods sold 1760 2000 75. 30 2635. 43 crying(a) profit 540 700 24. 70 864. 57 Selling expenses 150 180 6. 59 230. 80 normal and cheek expenses 120 124 4. 90 171. 7 dispraise 94 84 3. 60 125. 97 Operating profit 176 312 9. 60 336. 14 Non-operating surplus deficit 12 10 0. 45 15. 61 hire before interest and tax 188 322 10. 05 351. 75 Interest 30 38 1. 36 47. 46 profit before tax 158 284 8. 69 304. 29 tax 56 96 3. 00 104. 3 earnings after tax 102 188 5. 70 199. 46 Dividends(given) 35 35 40 contain earnings 67 153 159. 46 2. The profit and passing account of KG Electronics Limited for years 1 and 2 is given below development the percent of sales method, touch on the pro forma profit and tone ending account for year 3. convey that the sales impart be 26,000 in year 3. If dividends are raised to 500, what amount of retained earnings can be pass judgment for year3 . twelvemonth 1 2 Net sales 18,230 22,460 make up of goods sold 13,210 16100 coarse profit 5020 6360 Selling expenses 820 890 oecumenic and administration expen ses