Q. Re-arrange the following Balance Sheet of M/s Alpha Ltd.

As on 31 st March 2005 in a form suitable for analysis

Liabilities Rs. Assets Rs.
Equity Share 398000 Goodwill 6600
Preference Share Capital 300000 Machinery 220740
Securities Premium 40000 Land 176000
General Reserve 20000 Building 490000
Reserve for Doubtful Debts 2000 Furniture 179260
Profit & Loss Account 60000 Investment in Shares of Y Ltd 18000
Depreciation Provision 240000 Stock 48000
Debentures 80000 Debtors 26150
Bank Loan 30000 Loose Tools 28500
Fixed Deposits 40000 Cash 6500
Sundry Creditors 36700 Bank 16000
Bills Payable 62450 Staff Advances 48000
Provision for Taxation 64000 Advance Tax 99000
Provision for Dividend 58000 Preliminary Expenses 3000
Expenses on Issue of Shares 6000
1431150 1431150
Note:
Details of Depreciation provision:
Machinery Rs. 80000
Building Rs. 100000
Furniture Rs. 60000
Also determine the following:
a) Total funds employed
b) Fictitious assets
c) Intangible assets
d) Current assets
e) Quick assets
f) Current Liabilities
g) Working Capital
h) Loan funds
i) Proprietors’ funds
j) Net assets
k) Fixed liabilities
Q. Balance Sheet as on _________
31.12.2004 Rs. 31.12.2005 Rs.
Current Assets:
Cash at Bank 123000 153000
Debtors 211200 197700
Bills Receivable 120000 91500
Prepaid Expenses 9000 12000
Fixed Assets:
Building 480000 465000
Plant 405000 375000
Furniture 151500 55800
1500000 1350000
Current Liabilities:
Creditor 270000 15000
Bills Payable 120000 241500
Outstanding Expenses 45000 49500
Reserve & Surplus 165000 144000
Share Capital 900000 900000
1500000 1350000
Prepare 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 40
Equity Share Capital 80 100 Machinery 220 300
Securities Premium 40 50 Investments 10 5
General Reserve 40 10 Sundry Debtors 28 36
Profit & Loss A/c 21 Stock 42 45
Depreciation Reserve 180 170 Bills Receivable 7 4
12 % Debentures 10 15 Prepaid Expenses 2 3
Long Term Loans 5 10 Bank 10
Bank Overdraft 15 Cash 3 2
Sundry Creditors 10 24 Preliminary Expenses 8 15
Outstanding Expenses 5 10 Goodwill 20 10
Unclaimed 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 31 st March
(Rs. In thousands)
Particulars 2005 Rs. 2006 Rs. Particulars 2005 Rs. 2006 Rs.
To Opening Stock 75 100 By Sales 1500 2000
To Purchases 750 1070 By Closing Stock 100 120
To 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 8
To Administrative Exp. 98 147 Machinery
To Selling Expenses 150 250
To Discount 2 1
To Carriage 25 105
To Loss by Fire 5
To Wages 65 100
To Provision for Tax 190 145
To Net Profit 190 145
Total 1612 2133 Total 1612 2133

Q. Prepare a Common size Comparative Financial Position Statement from the following Balance Sheets
Balance 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 90
Reserve Surplus 180 10 Investments 80 20
10 % Debentures 50 100 Prepaid Expenses 10 12
Bank Overdraft 45 Stock 240 268
Creditors 90 200 Debtors 160 80
Provision for Tax 70 25 Cash 30 10
Preliminary Expenses 5
640 485 640 485
Q. From the following Balance Sheet as on 31 st March 2005 and the Trading, Profit & Loss Account for the year
ending 31st March 2005, prepare:
a) Common Size Balance Sheet
b) Common Size Income Statement
Balance Sheet
Liabilities Rs. Assets Rs.
Equity Share Capital 2000000 Goodwill 1000000
General Reserve 400000 Building 2000000
Profit & Loss Account 600000 Machinery 800000
Preference Share Capital 600000 Furniture 200000
Secured Loan 400000 Stock 800000
Income Tax Provision 200000 Debtors 600000
Bank Overdraft 600000 Bank Balance 400000
Creditors 1200000 Bills Receivable 200000
6000000 6000000
Trading Profit & Loss Account
Rs. Rs.
To Opening Stock 800000 By Sales 4200000
To Purchases 2200000 Less: Returns 200000 4000000
To Wages 500000 By Closing Stock 1000000
To Factory Expenses 500000
To Gross Profit c/d 1000000
5000000 5000000
To Administrative Exp. 150000 By Gross Profit b/d 1000000
To Selling Expenses 100000 By Commission 75000
To Finance Expenses 50000
To Depreciation 125000
To Income Tax Profit 200000
To 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 9880
Cost of Sales 14970 12490 8810
Expenses 80 130 50
Interest Expenses 500 370 200
Tax 390 190 450
Fixed Assets (Net) 5480 5110 4770
Working Capital 5080 4880 3290
Investments 770 180 420
Net Worth 6660 6010 5850
External Loans 4680 4160 2640
Q. Analyze and comment on the trend
Balance Sheet of Efficient Ltd. as on 31 st March
(Rs. in thousand)
2003 Rs. 2004 Rs. 2005 Rs.
Assets:
Fixed Assets (at cost less Depreciation) 15.00 12.50 12.00
Investment 1.00 0.50 1.00
Stock in Trade 6.00 5.00 4.00
Accounts Receivable 9.00 7.50 6.00
Loans and Advances 4.00 4.00 3.00
Cash and Bank Balances 0.50 0.50 0.50
35.50 30.00 26.50
Liabilities:
Share Capital 20.50 17.00 14.50
Bank Loans 4.00 3.00 3.00
Sundry 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 31 st March 2005. you
are required to prepare Vertical Income Statement for the purpose of analysis.
Rs. Rs.
To Opening Stock 700 By Sales
To Purchases 900 Cash 520
To Wages 150 Credit 1500
To Factory Expenses 350 2020
To Office Salaries 25 Less: Return and 20 2000
To Office Rent 39 Allowance
To Postage and Telegram 5 By Closing Stock 600
To Directors Fee 6 By Dividend on Investment 10
To Salesman Salaries 12 By Profit on Sale of Furniture 20
To Advertising 18
To Delivery Expenses 20
To Debenture Interest 20
To Depreciation
On Office Furniture 10
On Plant 30
On Delivery Van 20
To Loss on Sale of Van 5
To Income Tax 175
To Net Profit 145
2630 2630
Q. Common India Ltd.
Balance Sheet as on 31st December 2005
Liabilities Rs. Assets Rs.
Capital Reserve 126000 Copyright 100000
General Reserve 120000 Cash 21000
Provision for Tax 50000 Calls in Arrears 9575
Commission received in Advance 10875 Plant and Machinery 420000
15% debentures 160000 Debtors 300425
12% Bank Loan 40000 Prepaid Insurance 15375
6% Preference Share Capital 200000 Land and Building 500000
Equity Share Capital 1000000 Fixtures 25000
Bills Payable 49125 Furniture 75000
Profit and Loss Account 9000 Preliminary Expenses 18625
Bank Overdraft 10740 Goodwill 100000
Share Premium 15000 Investments (Long Term) 175000
Sundry Creditors 189260 Stock 200700
Market Investments 19300
1980000 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 1 st January 1990. The Balance Sheet as on 31 st December
2004 and as on 31st December 2005, the Profit nd Loss Account for the year ended 31 st December 2004 and for
the year ended 31st December 2005 are given below:-
Liabilities 31.12.2004 31.12.2005 Assets 31.12.2004 31.12.2005
Rs. Rs Rs. Rs

Equity Share of 200000 200000 Fixed Assets

Rs. 10 each Less: Derecia. 396000 416000
General Reserve 40000 20000 Stock in Trade 120000 60000
Profit & Loss A/c 4000 28000 Debtors 160000 80000
Mortgage Loan 160000 220000 Cash & Bank 4000 60000
Bank Overdraft 40000
Creditors 180000 60000
Provision for 26000 68000
Taxation
Proposed Dividend 30000 20000
680000 616000 680000 616000
Profit and Loss Account for the year ended -------
31.12.2004 31.12.2005 31.12.2004 31.12.2005
Rs. Rs Rs. Rs

Directors 60000 20000 Balance b/f 28000 4000

Remuneration Net Profit after 121600 160800
Interest on Loan 9600 8800 Depreciation
On Mortgage
Provision for
Taxation 26000 68000
Proposed dividend 30000 20000
Transfer to Reserve 20000 20000
Balance c/d 4000 28000
149600 164800 149600 164800
Sales for the year 2004 amounted to Rs. 1000000 and for 2005 amounted to Rs. 1200000
Calculate
a) Net Profit Ratio b) Current Ratio
c) Liquidity Ratio d) Debt/Equity Ratio and
e) Debt Service ratio f) Net Operating Profit Ratio
Give 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 3000000
Net Profit after Tax 123000 158000
Equity Capital (Rs. 10 per shre fully paid) 1000000 800000
General Reserves 232000 642000
Long Term Debt 800000 660000
Creditors 382000 549000
Bank Credit (Short Term) 60000 200000
Fixed Assets 1599000 1590000
Investments 331000 809000
Other Current Assets 544000 452000
You 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 1210000
10 % Debentures 460000 Cash 445000
Sundry Creditors 330000 Sundry Debtors 550000
Bills Payable 440000 Stocks 1650000
Other Current Liabilities 220000
3850000 3850000
Statement of Profit for the year ending 31 st December 2005
Rs. Rs.
Sales 5500000
Less: Cost of goods Sold
Materials 2090000
Wages 1320000
Factory Overheads 649000 4059000
Gross Profit 1441000
Less: Selling and Distribution Cost 550000
Administration and General Expenses 614000 1164000
Earnings before Interest and Tax 277000
Less: Interest Charges 46000
Earnings before Tax 231000
Less: Tax 950 %) 115500
Net Profit 115500
Ratios to be computed:
1) Current Ratio 2) Liquid Ratio 3) Earning per Share 4) Net Profit Ratio
5) Operating Ratio 6) Proprietary Ratio 7) Stock Turnover Ratio 8) Debt Collection Period
 9) Capital Gearing 10) Return on Capital Employed
Ratio

Q. The following is the Balance Sheet of J Ltd on 31 st March 2005

Liabilities Rs. Assets Rs.
Share Capital 2000000 Fixed Assets 1800000
Reserves 400000 Debtors 500000
Creditors 300000 Stock 400000
Bank Overdraft 100000 Bank Balance 100000
2800000 2800000
Total 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 31 st March 2005
There were no non-operating expenses and non-operating incomes
Calculate the following ratios:
a) Current Ratio b) Liquid Ratio
c) Operating Ratio d) Net Profit Ratio
e) Stock Turnover Ratio f) Debtors Turnover Ratio and Collection Period
g) 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 Ratio
3) Current Ratio 4) Liquid Ratio
5) Debtor Equity Ratio
Rs.
Bank 50000
Land and Building 800000
Advance Payments 62000
Stock 273000
Creditors 406000
Debtors 523000
Bills Receivable 21000
Plant and Machinery 544000
12% Debentures 250000
Loan from a Director 400000
Equity Share Capital 1000000
Profit and Loss Account 217000
Q. From the following Balance Sheet of B Ltd. As on 31 st 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 Ratio
d) Debtors Turnover Ratio e) Operating Ratio f) Capital Gearing Ratio
g) Net Profit Ratio h) Stock Working Capital Ratio i) Earning Per Equity Share
j) Interest Coverage Ratio k) Creditors Turnover l) Dividend Payment Ratio
Balance Sheet
Liabilities Rs. Assets Rs.
10 % Preference Capital 200000 Fixed Assets 2600000
Equity Capital (Rs. 10) 1000000 Bank Balance 100000
General Reserve 800000 Short Term Investment 300000
12 % Debentures 1400000 Debtors 400000
Creditors 120000 Last year Rs. 200000
Outstanding Expenses 220000 Stock 600000
Income Tax Provision 260000
4000000 4000000
Trading Profit & Loss Account
Rs. Rs.
To Opening Stock 600000 By Sales
To Purchases 5160000 By Closing Stock 600000
To Gross Profit 840000
6600000 6600000
To Administrative Expenses 80000 By Gross Profit 840000
To Rent 56000 By Profit on Sale of Fixed Asset 110000
To Interest 90000
To Selling Expenses 44000
To Depreciation 200000
To Income Tax Provision 240000
To Net Profit 240000
950000 950000
The Company declared dividend on equity share @ 20 %

Q. The following items appear in the accounts as at 31 st December 2005 of Overseas Ltd.
Cash Rs.
Land and Building (at cost) 48600
Deposits and Payments in advance 800000
Stock 62000
Trade Creditors 272800
General Reserve 405750
Debtors 100000
Bills Receivable 523000
Plant & Machinery at cost less Depreciation 22600
Debentures-Repayable 2005 (Secured) 544000
Bank Overdraft 250000
 Ordinary Share Capital of Rs. 10 each 52000
Profit and Loss Account Balance 1000000
Proposed Dividend for 2005 Net 217000
Trade Investments 86250
Advance payment of Tax 20000
Provision for Taxation 100000
Bills Payable 264000
Net Sales for the year 2005 18000
2182400
You are required to arrange the above items in the form of Financial Statements to indicate
a) Working Capital b) Total Funds Employed c) Shareholders’ Equity
and 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 100
Returned Earnings 36 Prepaid Expenses 1
6% Debentures 50 Inventory 10
Creditors 10 Debtors 70
Wages Payable 4 Cash 10
Taxes 1
221 221
Profit & Loss Account for the year ended 31 st March 2005
To Opening Stocks Rs. Rs.
To Purchases 30 By Sales 400
To Operating Expenses 300 By Closing Stocks 40
To Income Tax 80
To Net Profit 12
18
440 440
From the above statement compute
a) Current Ratio b) Acid Rest Ratio c) Stock Turnover Ratio
d) No. of days sales invested in Debtors e)No. of days purchases in Creditors
f) Return on Capital employed g) Return on Proprietor’s equity h) Earning per Share
i) 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 31 st March 2005 of Ambika Ltd.
Rs.
Share Capital (20000 Equity Shares of Rs. 10 each of Rs. 5 called up) 100000
Land and Building 125000
Machinery 50000
Stock 50000
Reserves and Surplus:
General Reserve 50000
Profit and Loss Account 15000
5% Debentures 100000
Bills Payable 7000
Bills Receivable 5000
Furniture 25000
Debtors (less than 6 months) 11000
Preliminary Expenses 5000
Creditors 18000
Cash on Hand 2000
Bank Balance (Dr.) 18000
Provision for Doubtful Debts 1000
Calculate the following Ratios:
a) Debt Equity Ratio b) Proprietary Ratio c) Current Ratio
d) Liquid Ratio e) Stock to Working Capital Ratio
Answer 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) 1200000
Equity Shares of Rs. 10 each 3200000
4400000
Profit after tax at 50% 1080000
Depreciation 120000
Equity dividend paid 20 %
Market price per Equity share Rs. 90
Calculate:
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 25
Liquid Ratio 15
Proprietary Ratio (Fixed Assets/Proprietary fund) 0.75
Working Capital Rs. 60000
Reserves and Surplus Rs. 40000
Bank Overdraft Rs. 10000
There are no Long Term Loans for fictitious assets