Financial Accounting & Analysis:NMIMS June 2018 Assignments: Avail answers at assignmentssolution@gmail.com

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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. (10 Marks)
Liabilities 31-3-2017 31-3-2018 Assets 31-3-2017 31-3-2018
Equity share capital 2,20,000 2,50,000 machinery 2,00,000 2,30,000 9% Preference Share Capital 1,00,000 1,10,000 Building 1,50,000 1,76,000 Securities Premium 20,000 26,000 Land 18,000 18,000 Profit & Loss A/c 1,04,000 1,34,000 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
5,74,000 6,54,000
5,74,000 6,54,000

Q2. Balance Sheet for JK Ltd. for the year ended 31st March 2016 & 2017 (10 Marks)
Liabilities 2016 2017 Assets 2016 2017 Equity Share Capital
2,00,000
2,00,000 Land 50,000 50,000 9% Preference Share Capital
1,50,000
1,50,000 Building 1,50,000 1,35,000 Reserves 1,00,000 1,22,500 Plant & Machinery
1,50,000
1,35,000 17% Debentures 50,000 75,000 Furniture 50,000 70,000 Creditors 75,000 1,00,000 Stock 1,00,000 1,50,000
Bills Payable 25,000 37,500 Debtors 1,00,000 1,50,000 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
3,00,000
3,75,000 By Sales 4,00,000 5,00,000 To Operating Expenses Administrative Selling
6,500 10,000
7,250 10,000
To Interest on Debentures
8,500
12,750
To Net Profit 75,000 95,000
4,00,000 5,00,000
4,00,000 5,00,000
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. (5 Marks) 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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