Financial Statement Analysis (Major) (Nov-Dec’ 2019) | Gauhati University Question Papers

Gauhati University Question Papers
Regulatory Framework of Business - I' 2019
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)

1. Answer the following questions as directed:            1x5=5

a)         Equity means

1)      Claims of the proprietors against the assets of an enterprise.

2)      Claims of the creditors against the assets of an enterprise.

3)      Claims of the proprietors and creditors against the assets of an enterprise.

4)      None of the above.

(Choose the correct alternative).

b)         Section ________ of the Companies Act is regarding the forms and contents of Balance sheet and Profit and Loss Statement. (Fill in the blank)

c)          Horizontal analysis is also called ________ analysis. (Fill in the blank)

d)         Financial statement analysis to examine the financial statements of one particular year alone is called

1)      Short-term analysis.

2)      Horizontal analysis.

3)      Vertical analysis.

4)      Static analysis.

(Choose the correct alternative.)

e)         Flow of fund arises when a transaction affects

1)      Two non-current items.

2)      Two current items.

3)      One current and one non-current items.

4)      All of the above.

(Choose the correct alternative.)

2. Write the meaning of the following:                                                   2x5=10

a)         Fund flow.

b)         Net worth.

c)          Corporate Social Responsibility.

d)         Absolute liquid ratio.

e)         Trend analysis.

3. Answer the following questions:                                                          5x5=25

(a) Briefly explain the features of Statement of Profit and Loss.

(b) Explain the concept of corporate financial reporting.

Or

Discuss in brief the contents of Board of Director’s Report.

(c) Blue Hill Ltd. supplies you the following information:

Share Capital: 50,000 Equity shares of Rs. 10 each 8% Preference shares of Rs. 100 each Earnings before interest and tax 10% Debentures Reserve and Surplus Corporate tax rate

Rs. 5,00,000 2,00,000 6,00,000 5,00,000 1,20,000 40%

 

You are required to calculate:

a)         Earnings per share.

b)         Capital gearing ratio.

Or

Explain in brief five limitations of ratio analysis.

(d) Calculate ‘Funds from operations’ from the following information as on 31^st March, 2019:

1)         Net profit for the year ended 31^st March, 2018 Rs. 4,20,000.

2)         Gain on sale of building Rs. 17,500.

3)         Goodwill appears in the books at Rs. 1,20,000, out of that 10% has been written off during the year.

4)         Old machinery worth Rs. 50,000 has been sold for Rs. 47,800 during the year.

5)         Rs. 16,500 have been transferred to the General reserve.

6)         Depreciation has been provided during the year on machinery at 20%, whose total cost is Rs. 3,50,000.

Or

Distinguish between Funds flow Statement and Cash flow Statement.

(e) How the Common size statement differs from Comparative statement?

Or

Explain in brief the objectives of Financial Statement Analysis.

4. What do you mean by financial statements? What are the various objectives of preparing financial statements? 4+6=10

Or

Write a note on the information incorporated in financial statements and explain their qualitative requirements.  4+6=10

5. Discuss the statutory requirements of Companies Act as regards the preparation of financial statements in India.     10

Or

Explain in brief the various contents of Annual Report.                                               10

6. From the following information relating to Prakash Ltd. prepare a Balance Sheet as on 31^st March, 2019:            10

Current ratio Liquid ratio Working capital Stock turnover ratio (Cost of sales/Closing stock) Gross profit ratio Average debt collection period Fixed assets/Shareholders’ Net Worth Reserve and surplus/Share capital

2.5 1.5 Rs. 6,00,000   8 times 20% 1.5 months 0.75:1 0.50:1

 

Or

Briefly explain the meaning and significance of the following ratios:                                     5+5=10

a)         Stock Turnover Ratio.

b)         Current Ratio.

7. The following is the summarised Balance sheet of ABC Ltd. as on 31^st March, 2019:

Balance Sheet as on 31^st March, 2019

Particulars	31.3.2018 Amount (Rs.)	31.3.2019 Amount (Rs.)
I. Equity and Liabilities: (1) Shareholders’ fund: Share Capital: Equity share capital Reserve and Surplus: Surplus in Statement of Profit and Loss (2) Current Liabilities: Trade payables Creditors Other current liabilities	5,60,000   1,82,000     1,82,000 28,000	6,30,000   3,08,000     2,80,000 14,000
Total	9,52,000	12,32,000
II. Assets: (1) Non-current Assets: Fixed Assets: Plant and Machinery (2) Current Assets: Inventories Trade Receivables: Debtors Cash and cash equivalents	2,80,000   1,82,000   4,20,000 70,000	3,92,000   1,26,000   6,30,000 84,000
Total	9,52,000	12,32,000

 

Additional information:

1)         An old machinery having books value of Rs. 42,000 was sold for Rs. 56,000.

2)         Depreciation provided on machinery during the year was Rs. 28,000.

3)         Dividend paid during the year Rs. 56,000

Prepare a Statement of Cash flow as per Ind AS-7.                                       10

Or

Explain the procedures applied for preparation of Fund Flow Statement and a Statement of changes in working capital. 5+5=10

 

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