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Accounting Ratios
From the following Balance Sheets of Vijaya Ltd. as on 31-3-2009 and 31-3-2010 prepare a Cash Flow Statement.
|
Liabilities |
31-3-2009 (Rs) |
31-3-2010 (Rs) |
Assets |
31-3-2009 (Rs) |
31-3-2010 (Rs) |
|
Share Capital General Reserve Profit & loss account Trade Creditors
|
45,000 15,000 10,000 8,700 |
65,000 27,500 15,000 11,000 |
Fixed Assets Stock Debtors Cash Preliminary expense |
46,700 11,000 18,000 2,000 1,000 |
83,000 13,000 19,500 2,500 500
|
|
|
78,700 |
1,18,500 |
|
78,700 |
1,18,500 |
Additional Information:
(i) Depreciation on Fixed Assets for the year 2009-2010 was Rs. 14,700.
(ii) An interim dividend Rs. 7,000 has been paid to the shareholders during the year.
Cash Flow Statement
(For the year ended 31st March 2010)
|
Particulars |
Rs |
Rs |
||
|
(A) Cash Flow from Operating Activities :–
Net Profit Before Tax
Adjustment: Add 1. Depreciation on Fixed Assets
2. written off Preliminary Expenses
Operating Profit Before Changes in Working Capital
Less : Increase in Current Assets
Stock
Debtors
Add: Increase in Current Liabilities
Trade Creditors
Cash Flow from Operating Activities :–
(B). Cash Flow from Investing Activities:
Purchase of Fixed Assets
Net Cash Used in Investing Activities :–
(C). Cash Flow from Financing Activities:
Payment of Interim Dividend
Cash Flow from Financing Activities:
Net Increase in Cash & Cash Equivalent
Add: Opening Balance of Cash & Cash Equivalent
Closing Balance of Cash & Cash Equivalent |
|
|
||
|
24500
14700
500
|
(51000)
13000
|
|||
|
39700
(2000)
(1500)
2300
|
||||
|
(51000)
|
||||
|
20000
(7000) |
||||
|
|
||||
|
500
2000
|
||||
|
2500 |
||||
Working Note: Calculation of net profit before tax
|
Net profit as per profit and loss account (15000-10000) Add transfer to general reserve Interim dividend paid during the year Net profit before tax |
5000 12500 7000 |
||||||||||||
|
24500 |
|||||||||||||
|
Fixed asset account
|
|
||||||||||||
|
|
|
Some More Questions From Accounting Ratios Chapter
O.M. Ltd has a Current Ratio of 3.5:1 and Quick Ratio of 2:1. If the excess of Current Assets over Quick Assets as represented by Stock is Rs 1,50,000, calculate Current Assets and Current Liabilities.
From the following information, calculate any two of the following ratios:
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ration and
(c) Return on Investment
Information: Equity Share capital Rs 50,000, General Reserve Rs 5,000; Profit and Loss
Account after tax and interest Rs 15,000; 9% Debenture Rs 20,000; Creditors Rs 15,000; Land and Building Rs 65,000; Equipment Rs 15,000; Debtors Rs 14,500 and Cash Rs 5,500. Discount on issue of shares Rs 5,000
Sales for the year ended 31-3-2011 was Rs 1,50,000. Tax rate 50%.
(a) Debt-Equity Ratio
(b) Working Capital Turnover Ration and
(c) Return on Investment
Information: Equity Share capital Rs 50,000, General Reserve Rs 5,000; Profit and Loss
Account after tax and interest Rs 15,000; 9% Debenture Rs 20,000; Creditors Rs 15,000; Land and Building Rs 65,000; Equipment Rs 15,000; Debtors Rs 14,500 and Cash Rs 5,500. Discount on issue of shares Rs 5,000
Sales for the year ended 31-3-2011 was Rs 1,50,000. Tax rate 50%.
On the basis of the following information, calculate:
(i) Debt-Equity Ratio and
(ii) Working Capital Turnover Ratio
Information: Rs.
Net Sales 60,00,000
Cost of goods sold 45,00,000
Other current assets 11,00,000
Current liabilities 4,00,000
Paid up share capital 6,00,000
6% Debentures 3,00,000
9% Loan 1,00,000
Debenture Redemption Reserve 2,00,000
Closing Stock 1,00,000
From the following Balance Sheets of Vijaya Ltd. as on 31-3-2009 and 31-3-2010 prepare a Cash Flow Statement.
Liabilities
31-3-2009
(Rs)
31-3-2010
(Rs)
Assets
31-3-2009
(Rs)
31-3-2010
(Rs)
Share Capital
General Reserve
Profit & loss account
Trade Creditors
45,000
15,000
10,000
8,700
65,000
27,500
15,000
11,000
Fixed Assets
Stock
Debtors
Cash
Preliminary expense
46,700
11,000
18,000
2,000
1,000
83,000
13,000
19,500
2,500
500
78,700
1,18,500
78,700
1,18,500
Additional Information:
(i) Depreciation on Fixed Assets for the year 2009-2010 was Rs. 14,700.
(ii) An interim dividend Rs. 7,000 has been paid to the shareholders during the year.
Liabilities
31-3-2009
(Rs)
31-3-2010
(Rs)
Assets
31-3-2009
(Rs)
31-3-2010
(Rs)
Share Capital
General Reserve
Profit & loss account
Trade Creditors
45,000
15,000
10,000
8,700
65,000
27,500
15,000
11,000
Fixed Assets
Stock
Debtors
Cash
Preliminary expense
46,700
11,000
18,000
2,000
1,000
83,000
13,000
19,500
2,500
500
78,700
1,18,500
78,700
1,18,500
(i) Depreciation on Fixed Assets for the year 2009-2010 was Rs. 14,700.
(ii) An interim dividend Rs. 7,000 has been paid to the shareholders during the year.
What is meant by solvency of business?
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