Part-A

Define financial ratio?

What are the sources and applications of funds ?
Mention three broad categories of Rols ?
What are accounting ratios ?
Define the term’flow of funds’ ?
Define Inventory turnover ratio ?
What do you mean by Cash from Operation ?
What is the formula for calculating Average Collection period ?
How cash flow statement is different from fund flow statement ?
What are financial statements ?
What is amortisation ?
What are accounting ratios ?
What is funds flow statement ?
From the following details of a concern, Calculate Liquidity Ratios.
Current Assests Rs. 1,90,000
Quick Assests Rs.1,50,000
Current LiabilitiesRs. 75,000.
Draw a specimen form of Funds Flow Statement ?
What is a financial statement?
What are the two uses of financial statement?
Define Window dressing.
What is Ratio analysis?
What is common size statement?
What is trend analysis?
What is cash flow analysis?
What is fund flow analysis?
What are the two merits of ratio analysis?
What is Proprietary ratio?
Define Capital gearing ratio.
Define ROI.
What is solvency ratio?
Define working capital.
What do you mean by FFO?
Define the term Fund.

Part-B

The following are the summarized balance sheets of M/s Ravi Ltd as on
31.12.1999 and 2000:
Liabilities 1999 2000
Rs. Rs.
10% preference shares 1,00,000 1,10,000
Equaity shares 2,20,000 2,50,000
Share premium 20,000 26,000
Profit and Loss a/c 1,04,000 1,34,000
12% debentures 70,000 64,000
Creditors 38,000 46,000
Bills payable 5,000 4,000
Provision for tax 10,000 12,000
Dividend payable 7,000 8,000
--------------- ------------------
5,74,000 6,54,000
----------------- -----------------
Assets
Machinery 2,00,000 2,30,000
Buildings 1,50,000 1,76,000
Land 18,000 18,000
Cash 42,000 32,000
Debtors 38,000 38,000
Bills receivable 42,000 62,000
 Stock 84,000 98,000
--------------- ---------------
5,74,000 6,64,000
--------------- ----------------
You are required to prepare a statement of sources and application of funds.

The following is the Balance sheet of a company as on 31st March :

Liabilities Rs. Assests Rs.
Share capital 2,00,000 Land and building 1,40,000
Profit & loss A/c 30,000 Plant and machinery 3,50,000
General Reserve 40,000 Stock 2,00,000
12% Debentures 4,20,000 Sundry debtors 1,00,000
Sundry creditors 1,00,000 Bills recalibrate 10,000
Bills payable 50,000 Cash and bill 40,000
-------------- -----------------
8,40,000 8,40,000
Calculate
(1) Current ratio
(2) Quick ratio
(3) Inventory to working capital
(4) Dept to equity ratio
(5) Proprietary
(6) Capital gearing ratio
(7) Current assets to fixed assets

From the following balance sheet of XYZ Ltd., prepare cash flow statement :
Liabilities 1999 2000
Rs. Rs.
Equity share capital 3,00,000 4,00,000
Redeemable preference
Share capital 1,50,000 1,00,000
General reserve 40,000 70,000
Profit and Loss A/c 30,000 48,000
Proposed dividend 42,000 50,000
Creditors 55,000 83,000
Bills payable 20,000 16,000
Provision for taxation 40,000 50,000
 ---------------- ----------------
6,77,000 8,17,000
---------------- ----------------
Assets
Rs. Rs.
Good will 1,15,000 90,000
Land and Buildings 2,00,000 1,70,000
Plant 80,000 2,00,000
Debtors 1,60,000 2,00,000
Stock 77,000 1,09,000
Bills receivable 20,000 30,000
Cash in hand 15,000 10,000
Cash at bank 10,000 8,000
--------------- ----------------
6,77,000 8,17,000
---------------- ----------------
The following information is also given :
(1) Depreciation of Rs.10,000 and Rs. 20,000 have been charged on plant and
Land and Buildings in 2000.
(2) A dividend of Rs. 20,000 has been paid in 2000
(3) Income tax Rs. 35,000 has been paid during 2000.
The following are the ratios relating to the activities of National Traders Ltd:
Debtors Velocity 9months) – 3
Stock Velocity (months) – 8
Creditors Velocity (months) – 2
Gross Profit Ratio (%) – 25
Gross Profit for the current year December 31 amounts to Rs. 4,00,000.
Closing stock of the year is Rs. 10,000 above the opening stock . Bills receivable
amount to Rs. 25,000 and bills payable to Rs. 10,000. Find out :
(1) Sales,
(2) Sundry Debtors,
(3) Closing Stock and
(4) Sundry Creditors.

Explain the cash flow statement. How is it prepared ? What is the importance
Of this statement ? How is it different from fund flow statement?
From the following figures and ratios, draw out Trading, Profit and Loss
 Account and Balance Sheet :
Net current assets Rs. 1,00,000
Paid up Capital Rs. 3,00,000
Current Ratio 1.8 : 1
Liquid Ratio 1.35 : 1
Fixed Assets to shareholders’ equity 80%
Gross Profit Ratio 25%
Net profit to paid up Capital 20%
Stock Turnover 5 times
Average age of outstanding customers 36.5 days.

From the following balane sheets of X Ltd., as on 31st December 2006 and
2007, you are required to prepare
(1) Schedule of changes in working capital and
(2) Funds flow statement.
Liabiliities 2006 2007 Assets 2006 2007
Rs. Rs. Rs. Rs.
Share capital 1,00,000 1,00,000 Goodwill 12,000 12,000
General Reserves 14,000 18,000 Building 40,000 36,000
P and L A/c 16,000 13,000 Plant 37,000 36,000
Sundry Creditors 8,000 5,400 Investments 10,000 11,000
Bills Payable 1,200 800 Stock 30,000 23,400
Prov. For Tax 16,000 18,000 Bills 2,000 3,200
Receivable
Prov.for Doubtful 400 600 Debtors 18,000 19,000
Debts
Cash at bank 6,600 15,200
--------------- -------------- ------------ -----------
1,55,600 1,55,800 1,55,600 1,55,800
--------------- -------------- ------------- ----------
Additional Information :
1. Depreciation charged on plant was Rs. 4,000 and so building Rs.4,000
2. Provision for taxation of Rs. 19,000 was made during the year 2007.
3. Interin Dividend of Rs. 8,000 was paid during the year 2007.
Define Ratio Analysis. Indicate uses and abuses ?

The following are the summarized balanced sheets of Good Luck Ltd., as on
 31st December, 1999 and 31st December, 2000.
Liabilities 31stDec’99 31stDec’00 Assets 31stDec’99 31stDec’00
Equity Share Land &
Capital 2,00,000 2,40,000 Buildings 1,05,000 1,50,000
8%Debentures 50,000 ----- Plant &
Sharepremium --- 10,000 Machinery
GeneralReserve 30,000 50,000 (atcost) 2,90,000 3,20,000
Profit&Loss A/c 48,000 68,000 Inventories 1,30,000 1,05,000
Sundry Creditors 1,30,000 1,50,000 Sundry
Proposed dividend 20,000 24,000 Debtors 75,000 85,000
Provision for Cash 15,000 26,000
Depreciation :
Plant and
Machinery 1,40,000 1,50,000
Furniture 6,000 4,000
------------- ------------- ------------- ------------
Totals : 6,24,000 6,96,000 6,24,000 6,96,000
-------------- -------------- ------------- ------------
Additional information is as follows :
(1) Furniture which cost Rs. 5,000, written down value Rs. 1000 was sold
during the year 2000 for Rs. 2000.
(2) Plant and Machinery which cost Rs.20,000 and in respect of which
Rs.13,000 had been written off as depreciation was sold during the year
2000 for Rs. 3,000.
(3) The dividend of 1999 was paid during 2000.

You are required to prepare :

(1) A statement of changes in working capital during 2000
(2) Funds flow statement for the year 2000.
From the Balance Sheets of A Limited, make out :
(1) Statement of changes in the working capital
(2) Funds flow statement

Balance sheets

Following is the additional information available :

Liabilities 2004 2005 Asset 2004 2005
 Equity share Goodwill 1,15,000 90,000
Capital 3,00,000 4,00,000 Land &
12% Redeemable Building 20,000 1,70,000
Preference share Plant 80,000 2,00,000
Capital 1,50,000 1,00,000 Debtors 1,60,000 2,00,000
General expenses 40,000 70,000 Stock 77,000 1,09,000
Profit & Loss a/c 30,000 48,000 Bills receivable 20,000 30,000
Proposed Cash in hand 15,000 10,000
Dividends 42,000 50,000 Cash at bank 10,000 8,000
Creditors 55,000 83,000
Bills payable 20,000 50,000
Provision for
Taxation 40,000 50,000
--------------- ------------- ------------- -----------
Total 6,77,000 8,17,000 6,77,000 8,17,000
--------------- -------------- ------------- -----------
(1) Depreciation of Rs. 10,000 and Rs. 20,000 have been charged on Plant and
Land & Buildings respectively in 2005.
(2) An interin dividend of Rs. 20,000 has been paid in 2005.
(3) Income tax Rs. 35,000 has been paid in 2005.
With the following ratios and futher information given below, prepare a
Trading Account, Profit and Loss Account and a Balance Sheet of Shri Narain :
(1) Gross profit ratio 25%
(2) Net profit/sales 20%
(3) Stock-turnover ratio 10%
(4) Net profit/capital 1/5
(5) Capital to Total Liabilities ½
(6) Fixed assets/capital 5/4
(7) Fixed assets/total current assets 5/7
(8) Fixed assets Rs. 10,00,000
(9) Closing stock Rs.1,00,000.

The Income Statement of CRM Ltd., are given for the years 2004 and 2005.
Convert them into common-size income statement and interpret the changes

Income statement for the year ending 2004 and 2005

2004 2005 2004 2005
 To cost of sales 5,95,000 6,15,000 By Gross sales 7,25,000 8,15,000

To Gross profit 1,05,000 1,85,000 Less: Returns 25,000 15,000

-------------- -------------- ------------- ------------
7,00,000 8,00,000 Net Profit 7,00,000 8,00,000
--------------- --------------- -------------- -----------
To Operating By Gross
Expenses : profit b/d 1,05,000 1,85,000

To Selling and By other

Distribution income 1,200 8,050
Expenses 23,000 24,000

To Administrative
Expenses 12,000 12,500

To Non operating
Expenses 17,500 19,400

To Net Profit
During the year 53,000 1,37,150
--------------- --------------- --------------- -------------
1,06,200 1,93,050 1,06,200 1,93,050
State the uses and significance of cash flow statement.
(ii) What are the limitations of Ratio Analysis ?

From the following details, make out a Balance Sheet with as many details as
Possible.

(i) Stock velocity = 6

(ii) Capital turnover Ratio = 2
(iii) Fixed Asset turnover = 4
(iv) Gross profit ratio = 20%
(v) Debtors velocity = 2 months
(vi) Creditors velocity =73 days.
 The Gross profit was Rs. 60,000. Reserves and surplus amounts to Rs.
20,000. Closing stock was Rs. 5,000 in excess on opening stock. The cost
of goods sold is Rs. 2,40,000.
With the following ratios and further information given below, prepare a
Trading Account, Profit & Loss Account and a Balance Sheet of Shri Narain :
(i) Gross Profit Ratio 25%
(ii) Net profit/sales 20%
(iii) Stock turnover ratio 10
(iv) Net profit/capital1/5
(v) Capital to total liabilities ½
(vi) Fixed assets/capital 5/4
(vii) Fixed assets/Total current assets 5/7
(viii) Fixed assets Rs. 10,00,000
(ix) Closing stock Rs.1,00,000

What is cash flow statement ? Explain its utility and limitations. Differentiate
It from funds flow statement.
Discuss the utility and significance of financial statements to various parties in
the business concern.
Briefly describe the various tools used to analyze the financial statements.
Briefly explain the use of Ratios in financial analysis.
How is ratio analysis helpful to management in its basic functions?
Describe the various ratios used to test the solvency of a company.
What is Schedule of changes in working capital? Explain.
Explain fund flow statement and its managerial uses.
Describe the contents of a fund flow statement.
Give five examples each of major sources and applications of funds. Explain them.
Distinguish between fund flow and Balance sheet.
What is the difference between cash flow statement and fund flow statement.
Explain the procedure for preparing cash flow statement.
How fund flow analysis differ from cash flow analysis?
Draw up a specimen of cash flow statement(Indirect method)
Differentiate cash flow statement from Profit & loss account.