Ratio Analysis. CA Past Years Exam Question

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1 Ratio Analysis CA Past Years Exam Question Question : 1 Nov, 2009 From the Following Information, Calculate the Amount of Fixed Assets & Proprietors Funds. 1. Ratio of Fixed Assets to Proprietors Funds = Net Working Capital = ` 6,00,000 Question : 2 May, 2013 The Following Information related to Beta limited for the year ended 31 st March: Net Working capital ` 12,00,000 Fixed assets to Proprietors Fund Ratio 0.75 Working capital turnover ratio 5 times Return on equity (ROE) 15% There is no Debt Capital. You are required to calculate: (a) Proprietors Fund (b) Fixed Assets (c) Net profit Ratio Question : 3 Nov, 2010 MNP Limited had made plans for the next year. It is estimated that the company will employ total assets ` 25,00,000, 30% of the assets being financed by Debt an interest cost of 9% p.a. the direct costs for the year are estimated at ` 15,00,000 and all other operating expenses are estimated at ` 2,40,000. The sales revenue are estimated at ` 22,50,000. Tax rate is assumed to be 40%. You are required to Calculate - (i) Net profit, (ii) Return on Assets, (iii) Asset Turnover, (iv) Return on Equity Question : 4 Nov, 2009 MN limited gives you the following information related for the year ending 31 st March. Calculate (i) Quick Ratio, (ii) Fixed Assets Turnover Ratio, (iii) Proprietary Ratio, (iv) EPS, and (v) Price-Earning Ratio. Current Ratio 2.5:1 Current Market Price Per Equity Share ` 16 Debt-Equity Ratio 1:1.5 Net Working Capital ` 4,50,000 Return on Total Assets (PAT) 15% Fixed Assets ` 10,00,000 Total Assets Turnover Ratio 2 60,000 Equity Shares of ` 10 Each ` 6,00,000 Gross Profit Ratio 20% 20,0009% Preference Shares of ` 10 Each ` 2,00,000 Stock Turnover Ratio 7 Opening Stock ` 3,80,000 Page No. 1

2 Question : 5 Nov, 2012 The following accounting information and financial ratios of M limited relate to the year ended 31 st March, 2012: Inventory Ratio 6 times Debtors turnover ratio 8 times Creditors turnover ratio 10 times Current ratio 2.4 Gross profit ratio 25% Total sales ` 30,00,000, cash sales 25% of credit sales, cash purchase ` 2,30,000, working capital ` 2,80,000, closing inventory is ` 80,000 more that opening inventory. You are Required to Calculate: 1. Average inventory 2. Purchases 3. Average creditors 4. Average debtors 5. Current liabilities 6. Average payment period 7. Average collection period Question : 6 Nov, 2011 The financial statements of a company contain the following information for the year ending 31 st March ` Cash 1,60,000 Sundry debtors 4,00,000 Short-term investments 3,20,000 Stock 21,60,000 Prepaid expenses 10,000 Total current assets 30,50,000 Current liabilities 10,00,000 10% debentures 16,00,000 Equity share capital 20,00,000 Retained earnings 8,00,000 Statement of profit for the year ended 31 st March ` Sales (20% cash sales) 40,00,000 Less: Cost of goods sold 28,00,000 Profit before interest and tax 12,00,000 Less: Interest 1,60,000 Profit before tax 10,40,000 Less: Tax at 30% 3,12,000 Profit after tax 7,28,000 Calculate (a) Quick ratio, (b) Debt-Equity ratio, (c) Average collection period (assuming 360 days year) (d) ROCE. Page No. 2

3 Question : 7 May, 2005 With the help of the following information complete the balance sheet of MNOP Limited Equity share capital ` 1,00,000 The relevant ratios of the company are as follows: Current ratios of the debt to total debt 0.40 Total debt to owner s equity 0.60 Fixed assets to owner s equity 0.60 Total assets turnover 2 times Inventory turnover 8 times Question : 8 Nov, 2007 Using the following information, complete the balance sheet given below: Total debt to net worth: 1:2 Average collection period (assume 360 days in a year): 40 days Total assets turnover: 2 Inventory turnover ratio based on COGS and year end inventory: 3 Gross profit on sales: 30% Acid test ratio: 0.75 Balance sheet as on 31 st March Liabilities ` Assets ` Equity share capital 4,00,000 Plant and machinery and other fixed assets Reserve and surplus 6,00,000 Current assets Total debt: Inventory Current liabilities Debtors Cash TOTAL Page No. 3 TOTAL Question : 9 May, 2010 The following figures and ratios are related to a company: Sales for the year (all credit) ` 30,00,000 Current ratio 1.5:1 Gross profit ratio 25% Debtors collection period 2 months Fixed assets turnover (basis on COGS) 1.5 Reserve & surplus to share capital 0.6:1 Stock turnover (basis on COGS) 6 Capital gearing ratio 0.5 Liquid ratio 1:1 Fixed assets to net worth 1.20:1 You are required to prepare: 1. Balance sheet of the company on the basis of above details. 2. Statement showing working capital requirements, if the company wants to make a provision for contingencies at 10% of Net Working Capital including such provision. Question : 10 Nov, 2013 The assets of SONA limited consist of fixed assets and current assets, while its current liabilities comprise bank credit in the ratio of 2:1. You are required to prepare the balance sheet of the company as on 31 st March with the help of following information: Share capital ` 5,75,000 Average collection period 1.5 months Working capital (CA CL) ` 1,50,000 Current ratio 1.5:1 Gross margin 25% Quick ratio 0.8:1 Inventory turnover 5 times Reserves & surplus to bank & cash 4 times

4 Question : 11 May, 2006 JKL limited has the following financial statements as on 31 st March 2002 & 31 st March (in ` lakhs) Balance sheet Profit and loss account Sources of funds Sales 22,165 13,882 Shareholders funds 2,377 1,472 Less: cost of goods sold 20,860 12,544 Loan funds 3,570 3,083 Gross profit 1,305 1,338 Total 5,947 4,555 Less: Selling, general and 1, Application of funds Fixed assets 3,466 Administrative expenses 2,900 Less: EBIT Cash and bank Interest expense Debtors 1,495 1,168 EBIT Stock 2,867 2,407 Less: Tax Other current assets 1,567 1,404 EAT Less: Current liabilities (3,937) (3,794) Total 5,947 4,555 Calculate for the year (1) inventory turnover ratio, (2) Financial leverage, (3) return on investment (ROI),(4) return on equity (ROE), and (5) average collection period. Question : 12 May 2007 The following accounting information & financial ratios of PQR Ltd. relate to the year ended 31 st December Accounting information Financial ratios Gross profit 15% of sales Fixed assets to sales 1:3 Net profit 8% of sales Fixed assets to current assets 13:11 Raw materials consumed 20% of works Current ratio 2:1 cost Direct wages 10% of works Long term loans to current liabilities 2:1 cost Stock of raw materials 3 months usage Capital to reserves and surplus 1:4 Stock of finished goods 6% of works cost Debt collection period 60 days All sales are on credit. If value of fixed assets as on 31 st December amounted to ` 26 lakhs, prepare a summarized P & L A/c for the year ended 31 st December, and balance sheet as on 31 st December. Question : 13 May, 2014 NOOR Limited provides the following information for the year ending 31 st, March, 2014: Equity Share Capital ` 25,00,000 Gross Profit Ratio 25% Closing Stock ` 6,00,000 Net Profit to Sale 20% Stock Turnover Ratio 5 times Net Profit to Capital 1/4 You are required to prepare: Trading and Profit & Loss Account for the year ending 31 st March, Page No. 4

5 Question : 14 Nov, 2014 From the following information, prepare Balance Sheet of a Firm: Stock Turnover Ratio (based on Cost 7 times Liquidity Ratio 1.25 of Goods Sold) Rate of Gross Profit to Sales 25% Net Working Capital ` 8,00,000 Sales to Fixed Assets 3.5 times Net Worth to Fixed Assets 1.5 times Average Debt Collection Period 1.5 months Reserves to net worth 0.25 times Current Ratio 2 Long Term Debts Nil All sales are on credit basis Question : 15 May, 2015 SSR limited has furnished the following ratios and information relating to the year ended 31 st March, Sales ` 60 lacs Inventory turnover (Based on cost Return on net worth 25% of goods sold and closing stock) 12 Rate of income tax 50% Cost of goods sold ` 18 lacs Share capital to reserves 7:3 Interest on 15% ` 60,000 Current ratio 2 Sundry debtors ` 2 lacs Net-Profit to sales (after tax) 6.25% Sundry creditors ` 2 lacs You are required to: (i) Calculate the operating expenses for the year ended 31 st March, (ii) Prepare a balance sheet as on 31 st March, 2015 Question : 16 Nov, 2015 VRA Limited has provided the following information for the year ending 31 st March Debt equity ratio 2:1 Income tax rate 35% 14% long term debt ` 50,00,000 Capital turnover ratio 1.2 times Gross profit ratio 30% Opening stock ` 4,50,000 Return on equity 50% Closing stock 8% of sales You are required to prepare trading and profit and loss account for the ending 31 st March Page No. 5

INTER CA NOVEMBER 2018

INTER CA NOVEMBER 2018 Sub: FINANCIAL MANAGEMENT Topics Estimation of Working Capital, Receivables Management, Accounting Ratio, Leverages, Capital Structure. Test Code N16 Branch: Multiple Date: (50 Marks)