Balance Sheet and Labor Standard
1 . (a) What do you understand by the concept of conservatism ? Why is it also called the concept of prudence? Why is it not applied as strongly today as it used to be in the Past ?
(b) What is a Balance Sheet ? How does a Funds Flow Statement differ from a Balance Sheet ? Enumerate the items which are usually shown in a Balance Sheet and a Funds Flow Statement.
2 . (a) Discuss the importance of ratio analysis for inter-firm and intra-firm comparisons including circumstances responsible for its limitations .If any (b) Why do you understand by the term ‘pay-out ratio’? What factors are taken into consideration while determining pay-out ratio? Should a company follow a fixed pay-out ratio policy? Discuss fully.
3 . From the ratios and other data given below for Bharat Auto Accessories Ltd. indicate your interpretation of the company’s financial position, operating efficiency and profitability. Year I Year II Year III
Current Ratio 265% 278% 302%
Acid Test Ratio 115% 110% 99%
Working Capital Turnover (times) 2.75 3.00 3.25
Receivables Turnover 9.83 8.41 7.20
Average Collection Period (Days) 37 43 50
Inventory to Working Capital 95% 100% 110%
Inventory Turnover (times) 6.11 6.01 5.41
Income per Equity Share 5.10 4.05 2.50
Net Income to Net Worth 11.07% 8.5% 7.0%
Operating Expenses to Net Sales 22% 23% 25%
Sales increase during the year 10% 16% 23%
Cost of goods sold to Net Sales 70% 71% 73%
Dividend per share Rs. 3 Rs. 3 Rs. 3
Fixed Assets to Net Worth 16.4% 18% 22.7%
Net Profit on Net Sales 7.03% 5.09% 2.0%
4 .
Bose has supplied the following information about his business to Summary of Cash book for the year ended 31st March, 2004 is as follows :
Assets and Liabilities On 1st April 2003
(Rs.) On 31st March, 2004
(Rs.)
Sundry debtors
Stock
Machinery
Furniture
Sundry creditors 1,81,000
1,50,000
2,50,000
40,000
1,10,000 1,93,000
1,40,000
(b) What is a Balance Sheet ? How does a Funds Flow Statement differ from a Balance Sheet ? Enumerate the items which are usually shown in a Balance Sheet and a Funds Flow Statement.
2 . (a) Discuss the importance of ratio analysis for inter-firm and intra-firm comparisons including circumstances responsible for its limitations .If any (b) Why do you understand by the term ‘pay-out ratio’? What factors are taken into consideration while determining pay-out ratio? Should a company follow a fixed pay-out ratio policy? Discuss fully.
3 . From the ratios and other data given below for Bharat Auto Accessories Ltd. indicate your interpretation of the company’s financial position, operating efficiency and profitability. Year I Year II Year III
Current Ratio 265% 278% 302%
Acid Test Ratio 115% 110% 99%
Working Capital Turnover (times) 2.75 3.00 3.25
Receivables Turnover 9.83 8.41 7.20
Average Collection Period (Days) 37 43 50
Inventory to Working Capital 95% 100% 110%
Inventory Turnover (times) 6.11 6.01 5.41
Income per Equity Share 5.10 4.05 2.50
Net Income to Net Worth 11.07% 8.5% 7.0%
Operating Expenses to Net Sales 22% 23% 25%
Sales increase during the year 10% 16% 23%
Cost of goods sold to Net Sales 70% 71% 73%
Dividend per share Rs. 3 Rs. 3 Rs. 3
Fixed Assets to Net Worth 16.4% 18% 22.7%
Net Profit on Net Sales 7.03% 5.09% 2.0%
4 .
Bose has supplied the following information about his business to Summary of Cash book for the year ended 31st March, 2004 is as follows :
Assets and Liabilities On 1st April 2003
(Rs.) On 31st March, 2004
(Rs.)
Sundry debtors
Stock
Machinery
Furniture
Sundry creditors 1,81,000
1,50,000
2,50,000
40,000
1,10,000 1,93,000
1,40,000