FINANCIAL ACCOUNTING & ANALYSIS ASSIGNMENT JUNE 2018

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FINANCIAL ACCOUNTING
& ANALYSIS

Q1.
From the following information of A star Ltd. prepare the Cash Flow statement
for the year ended 2017 and 2018 as per AS – 3.

Liabilities	31-3-2017	31-3-2018	Assets	31-3-2017	31-3-2018
Equity share capital	220,000	250,000	Machinery	200,000	230,000
9% Preference Share Capital	100,000	110,000	Building	150,000	176,000
Securities Premium	20,000	26,000	Land	18,000	18,000
Profit & Loss A/c	104,000	134,000	Stock	84,000	98,000
5% Debentures	70,000	64,000	Debtors	38,000	38,000
Creditors	38,000	46,000	Bills Receivable	42,000	62,000
Bills Payable	5,000	4,000	Cash	42,000	32,000
Provision for Tax	10,000	12,000
Dividends payable	7,000	8,000
	574,000	654,000		574,000	654,000

Q2.
Balance Sheet for JK Ltd. for the year ended 31st March 2016 & 2017

Liabilities	2016	2017	Assets	2016	2017
Equity Share Capital	200,000	200,000	Land	50,000	50,000
9% Preference Share Capital	150,000	150,000	Building	150,000	135,000
Reserves	100,000	122,500	Plant & Machinery	150,000	135,000
17% Debentures	50,000	75,000	Furniture	50,000	70,000
Creditors	75,000	100,000	Stock	100,000	150,000
Bills Payable	25,000	37,500	Debtors	100,000	150,000
Tax payable	50,000	75,000	Cash	50,000	70,000
	650000	760000		650000	760000

Profit
& Loss Account for JK Ltd. for the year ended 31st March 2016 and 2017

Particulars	2016	2017	Particulars	2016	2017
To Cost of goods sold	300,000	375,000	By Sales	400,000	500,000
To Operating Expenses
Administrative	6,500	7,250
Selling	10,000	10,000
To Interest on Debentures	8,500	12,750
To Net Profit	75,000	95,000
	400,000	500,000		400,000	500,000

Using
the tool of commonsize financial statement analysis, comment about the
improvement or decline of financial performance of the company.

Q3.
The following extracts are available from the financial statements of companies
V ltd. and J Ltd. for the year ended 31st March 2017: (Rs. In Lakhs)

Particulars	V Ltd.	J Ltd.
Revenue from operations	1,500	6,000
Manufacturing cost	900	4,050
Interest paid	105	375
Depreciation	135	675
Selling expenses	135	225
Income Tax	90	225
Non-operating income	45	285
Dividend paid	120	600
Fixed Assets	1,500	7,350
Current Assets	525	2,250
Current Liabilities	375	2100
Debentures	600	3,300
Reserves	450	1,200
Share Capital	600	3,000

From
the above information answer the following questions with the help of suitable
ratios:

3
a)

·       
Which company has better solvency using
current ratio and share value using earning per share?

·       
Which company would you recommend for
investment? Justify.

3
b)

·       
Which company has efficiently employed
capital using return on capital employed and better operational efficiency using
operating profit ratio?

·       
Which company would you recommend for
investment? Justify.

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Answer Sheet of this Question paper

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PRAKASH - 09741410271/ 08722788493