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    Financial Reporting and Analysis PDF

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    Tushar Vats
    The document contains a sample end-term examination for a Financial Reporting and Analysis module. It includes 6 multiple part questions assessing students' understanding of key financial concepts and ratios, cash flow statements, revenue recognition methods, inventory valuation, depreciation, contingent liabilities, intellectual property valuation, and earnings per share calculations. Students are asked to comment on the financial performance of Reliance Industries based on 5 years of ratio data, evaluate Flipkart's financial position over 5 years based on its cash flow statement, and justify statements regarding the subjective aspects of financial reporting and different revenue recognition methods for different industries.

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    Financial Reporting and Analysis PDF

    Uploaded by

    Tushar Vats
    114 views2 pages
    The document contains a sample end-term examination for a Financial Reporting and Analysis module. It includes 6 multiple part questions assessing students' understanding of key financial concepts and ratios, cash flow statements, revenue recognition methods, inventory valuation, depreciation, contingent liabilities, intellectual property valuation, and earnings per share calculations. Students are asked to comment on the financial performance of Reliance Industries based on 5 years of ratio data, evaluate Flipkart's financial position over 5 years based on its cash flow statement, and justify statements regarding the subjective aspects of financial reporting and different revenue recognition methods for different industries.

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    The document contains a sample end-term examination for a Financial Reporting and Analysis module. It includes 6 multiple part questions assessing students' understanding of key financial concepts and ratios, cash flow statements, revenue recognition methods, inventory valuation, depreciation, contingent liabilities, intellectual property valuation, and earnings per share calculations. Students are asked to comment on the financial performance of Reliance Industries based on 5 years of ratio data, evaluate Flipkart's financial position over 5 years based on its cash flow statement, and justify statements regarding the subjective aspects of financial reporting and different revenue recognition methods for different industries.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    114 views2 pages

    Financial Reporting and Analysis PDF

    Uploaded by

    Tushar Vats
    The document contains a sample end-term examination for a Financial Reporting and Analysis module. It includes 6 multiple part questions assessing students' understanding of key financial concepts and ratios, cash flow statements, revenue recognition methods, inventory valuation, depreciation, contingent liabilities, intellectual property valuation, and earnings per share calculations. Students are asked to comment on the financial performance of Reliance Industries based on 5 years of ratio data, evaluate Flipkart's financial position over 5 years based on its cash flow statement, and justify statements regarding the subjective aspects of financial reporting and different revenue recognition methods for different industries.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    BML MUNJAL UNIVERSITY

    Master of Business Administration (MBA)


    Batch 2015-17
    Semester-1 (Module-2): End-Term-Examination
    Financial Reporting & Analysis
    --------------------------------------------------------------------------------------------------------------------------------------
    Max Marks = 35 Duration: 2 Hrs.
    --------------------------------------------------------------------------------------------------------------------------------------

    Q1. You have been hired as an analyst for Reliance Industries Limited (RIL) and your team is
    working on an independent assessment. Key financial ratios are given underneath from year
    2011 to year 2015. Comment on the adequacy of financial performance of the company. (5
    marks)

    Key 2015 2014 2013 2012 2011


    Ratios March March March March March
    (Investment
    Valuation Ratios )
    Dividend Per Share 10 9.5 9 8.5 8
    Operating Profit Per Share 97.67 95.54 95.36 102.78 116.47
    Profitability Ratio
    Gross Profit Margin(%) 7.02 5.66 5.91 6.73 9.87
    Net Profit Margin(%) 6.9 5.63 5.82 6.07 8.17
    Liquidity & Coverage Ratio
    Current Ratio 0.89 1.11 1.43 1.46 1.12
    Quick Ratio 0.63 1.03 1.12 1.19 0.89
    Interest Coverage Ratio 13.45 9.68 9.66 10.66 11.84
    Efficiency Ratios
    Inventory Turnover Ratio 9.32 9.35 8.69 9.45 8.67
    Debtors Turnover Ratio 42.95 34.61 23.78 18.4 17.06
    Cash Flow Indicator Ratio
    Dividend Pay Out Ratio Net
    Profit 12.95 12.7 12.51 12.62 11.75

    Q2. The Cash Flow Statement of Flipkart looks as follows. Evaluate the financial position of
    the company over the years. (5 marks)

    Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

    Net Profit Before Tax 16798 14002 12274 11096 8821


    Net Cash From Operating
    Activities 7955 9148 6942 5955 4270
    Net Cash (used in) /from
    Investing Activities 665 -2307 -2824 565 3235
    Net Cash (used in)/from
    Financing Activities -4961 -3177 -3319 -2298 -3642
    Net (decrease)/increase in
    Cash and Cash Equivalents 3622 3698 844 4282 3868
    Opening Cash & Cash
    Equivalents 24100 20402 19557 15275 11297
    Closing Cash & Cash
    Equivalents 27722 24100 20401 19557 15165

    Q3. “Financial Ratios are just numbers, their interpretation requires considering various other
    factors in order to ascertain the financial performance of a company.” Critically evaluate the
    statement. (3 marks)

    Q4. “There are various principles, concepts and conventions have been laid down to
    minimize the subjectivity quotient in accounting as far as reporting of data is concern but still
    there are certain gray areas which throw an opportunity for accountants to do the job
    subjectively.” Justify the statement along with giving the example in support. (5 marks)

    Q5. “Methods used for recognizing revenue is not similar for all the industries. It may vary.”
    Considering the above statement, explain various revenue recognition methods and also
    explain their respective advantages and disadvantages. You are also required to mention with
    each method, the industries which use them for recognizing revenues. (7 marks)

    Q6. Explain the following:

    A) When can we treat expenses on inventory as an asset? (2 marks)


    B) Why depreciation is a non-operating expense? (1mark)
    C) How impairment of assets is different from charging depreciation on the same?
    (1mark)
    D) If inventory is overvalued for the current year and the same has been rectified next
    year, what impact it will have on profit reporting of both years? (2 marks)
    E) Which depreciation method even out the expenses made on fixed assets? (1mark)
    F) Under what situation, contingent liabilities are to be reported in the main body of
    balance sheet? (1mark)
    G) A Patent has been registered in the name of ABX Ltd. for 10 years but there are
    strong possibilities that the similar product will be invented using some different
    technology under the same cost. What should the duration over which the patent must
    be amortised? (1mark)
    H) If EPS and diluted EPS of a company stand equal, what does it means? (1mark)

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