1. Return on assets [ROA] of Firms A and B Particulars 1. Net sales 2. Net profit 3.

Total assets Comment on the Comparative financial position of A and B

Firm A Rs.4,00,000.00 Rs.40,000.00 400000 4000

Firm B Rs.4,00,000.00 40000

2. The accompanying balance sheet and profit and loss account relate to Hypothetical Ltd. Convert these into common-size statements. Balance Sheet as at March 31 [Amount in lakh of Rs] Particulars Previous Year Current Year Liabilities Equity share capital[of Rs 10 each] General reserves Long-term loans Creditors Outstanding expenses Othet current liabilities Assets Plant [net of accumulated depreciation] Cash Debtors Inventories 402 54 60 84 600 390 78 65 117 650 240 96 182 67 6 9 600 240 182 169.5 52 6.5 650

Income Statement for the Year Ended March 31 [Amount in lakh of Rs] Particulars Previous Year Current Year Gross sales Less: Returns Net sales Less: Cost of goods sold Gross profit Less: Selling, general and administrative cost Operating profit Less: Interest expenses Earning before taxes Less: Taxes Earning after taxes 370 20 350 190 160 50 110 20 90 31.5 58.5 480 30 450 215 235 72 163 17 146 51.5 94.9

3. B Raj Ltd sells goods on cash as well as credit [though not on deferred instalment terms]. The following particulars are extracted from their books of accounts for the current year-end. Rs Total gross sales Cash sales[included in above] Sales returns Total debtors at the end Bills receivable Provision for doubtful debts at the end of year Total creditors at the end Calculate the average collection period. 100000 20000 7000 9000 2000 1000 10000

4. Z Ltd purchased a retail store and commenced business on April 1. From the following information, you are required to prepare in as much details as possible, a trading and profit and loss account for the current year ended March 31 and a balance sheet as at the date. Rs Capital introduced on April 1 Drawings during the year Working capital [current assets less current liabilities] at March 31 Depreciation of fixed assets during the year, based on a rate of 20 per cent per annum on cost Ratio of annual sales to year-end values of fixed assets plus working capital Ratio of current assets to current liabilities at the year end Ratio of liquid assets[cash plus debtors] to current liabilities on March 31 Debtors at the year-end as per cent of annual sales General expenses [excluding depreciation] as per cent of annual sales 47000 5000 23000 3000 02:01 02:01 05:04 12 20

5. From the ratios and other data set forth below for the Auto Accessories Ltd, indicate your interpretation of the company's financial condition: Particulars Year 3 Year 2 Year 1 Current ratio [per cent] Acid-test ratio Working capital turnover [times] Receivable turnover [times] Collection period [days] Inventory to working capital [per cent] Inventory turnover [times] 302 99 3.25 7.2 50 110 5.41 278 110 3 8.41 43 100 6.01 265 155 2.75 9.83 37 95 6.11

Income per equity share [Rs] Net income to net worth [per cent] Operating expenses to net sales [per cent] Sales increase during the year [per cent] Cost of goods sold to net sales [per cent] Dividend per share [Rs] Fixed assets to net worth [per cent] Net profit on net sales [per cent]

2.5 7 25 23 73 3 22.7 2

4.05 8.5 23 16 71 3 18 5.09

5.1 11.07 22 10 70 3 16.4 7.03

6. The following ratios are given for Mintex Company. Net profit margin ratio 4 percent Current ratio Return on net worth Total debt to total assets ratio Inventory turnover ratio Complete the following statements. Profit and Loss Account Rs Sales Cost of goods sold Operating expenses Profit before interest and tax Interest Profit before tax Tax provision [ 50 percent] Profit after tax 700 45 Balance Sheet Fixed assets Current assets Cash Receivables Inventory 1.25 15. 23 percent 0.4 25

Net worth Short-term debt [10.42 percent interest]

180 60 -

Long-term debt [10 percent interest] -