[W.B.S.U B.c, off p. Practical Problems : ‘om (Gen,) 2022) ——arems i (i) Altman’s Multivariate Model: 1, Balance Sheet as on 31.03.2023 Particulars _ Ta Amount |. Equity and Liabilities: 1. Shareholders’ Funds” (a) Share Capital (Equity Share Capital @ % 10 each) 1,00,000,‘Statement Analysis For SEM VI(Honours) () Surplus 2, Non-Current Liabilti (a) Long term Borowing 10% Debentures 12% Loan 3. Current Liabilities: (a) Shorttenm Borrowings (Bank overdraft) (b) Trade payables (Creditors) Total U Assets; A. Non-Current Assets: (a). Property, Plant and EquipmentTangible Assets Buiking Machinery 2. Curent Assets: (2). Inventoriee Stock (b) Trade ReceWvebles Debtors (6) Cosh and Cash Equivalents ~ Bank Total ‘Additional Information: {i) Income Tax Rate is 35%, (i) Net Sales during 2022-28 are & 7,80,000. ii) EPS as on 31.03.2028 is € 0.975 6) ass a ee aea6 nme ie 1 neaton given elo, relating to Bad Pst Li, cela mans ‘Score and give s immer workin CAL 25. Total Assets geinined EOIN. 399, Total Assets toning Before Inerest and Taxes / Total Assets ~ 15% Market Value of Equity X,* Book Value of Total Debt ~ 150% Sales Tia, %* FoulAwes 7 (CU. B.Com. (Hons., 2006) Ipswer: Z Score = 4.113, Since the Z score is above 2,99 hence this firm may be preedicted as onsck) i 4, ‘Using Alimor’s multiple discriminant function, calculate z score of $ & Co.Ltd. Where the five aerpunting ratios are as follows and comment about is financial position at end, ‘Working Capital to Total Assets - 250 Retained Earning to Total Assets - 50% EBIT to Total Assets - 19% Book Value of Equity to Book value of Total Debt - 1.65 x Sale to Total Assets ~ 3 times. tc. mswer: Z Score = 5.614] ae oes ment: Since the Z Score is above 2.99 hence this firm may be predicted as nomsics]|A Welcome Approach to Financial Reporting and Financial Statement Analysis For SEM VI(Honours) 2. Current Assets: (a). Inventories 150,000 (b) Trade Receivables (Sundry Debiors) Total ‘Additonal Information {Nt Sls foe year 2022.29 wos & 29,5000 (iver pid yr shave dung te yor 200223 = £ 040, (ii) Dividend Payout Ratio as on 31st March, 2023 50%. Ge) Pce Eig ro 15 ang Almas ncton elt 2 Soo of Mifortne Land ner th UAnewer: 2 sre 2068, Comment: We observed tat he va of Z scr of Ma is 2.9068 which fas within the Grey area Le wihin the cutoff range between 1.8) gd Tn Rose ate ees re deeming ae {Hints (a Statement Showing Calaaton of EBT? Dividend Per Share A. Daident Part Rao = Pe 1B, Tl eamings avaiable to Exuty Shareholders = No of Shares x EPS = 20,000 Shares x 0.80 050 ‘Aad: Tx Added Back 952 x + 16000 a i ‘EBT 2 ‘Adds eres Ae Back ke 2 Debenture Interest = 2 €3.00.000 x 55Ro $ y Corporate Distress Prediction (for WBSU) qv i ‘6. The following information are available in respect of the undemoted companies: Company Actual Status NF F F = Failed F NF = Norefailed ermine (0) Optimum cutoff point fox the ratio Tl pol fi To {b) Determime the percentage of error in prediction. wer: Optimum cut-off point is 0.325. It Implies thet if actual ratio I less than 0.325 then the Sompany should be predicted as nor-ailure and of its greater than 0.325 then itis predicted as failure : 1 whose actual status {a) Out of 5 companies there is only one ero in respect of Company, is NF but predicted as falure and (b) % of such enor in prediction = itaplies that 80% of prediction is correctly made.] ‘ otal Dab “nen showing Determination of Optimum Cull Pont on he bas f Te ts: Stater Company | _TotalDebt_ | Actual Total Assets | Status 050- 9 Statement Analysis For SEM VI(Honours) ‘A Welcome Approach to Financial Reporting and Financial 3 7. The following information are available in respect ofthe underlined companies, Company | la | Actual Status E 30 A Determine the (a) Optimum cut off point (b) Percentage of failure “ (Answer: Optimum cut-off point under ere ratio is 0.325. It implies that if actu more than 0.325 then the compat ny should be predicted as non-falure and if it 0.325 then it is predicted as failure. At this cut-off point total failure is 0. - o Hence the % of error of 5 companies = 2 100 = 0% I implies that 100% of is correctly made.] ® ‘ Hints:With the decrease of CF/TD Rati, failure of firm wil be increase. a Company CF Actual Cut-off Type-1 ™ Status Point Error 0.40+0. A 0.40 NF ayes = 0.375 B 035 Ne 9354030 = 0.325 : ee D 0.25 F 0251020 oz05 |e F 020 F —f—_|_o0 | -F |