Scribd
Upload
278 views3 pages

Assignment-2 FA PDF

This document contains two assignments analyzing the financial statements of two companies - Maharaja Synthetics Limited and Blue Sea Enterprises Limited. For Maharaja Synthetics Limited, students are asked to calculate various profitability, liquidity, solvency, asset utilization and return ratios for 2017 and 2016 based on income statements and balance sheets provided. For Blue Sea Enterprises Limited, students must calculate cash operating profit, operating profit, pre-tax profit and net profit for 2016 and 2017. They are also asked to analyze the company's financial performance using ratios and expense ratios, and calculate the dividend payout ratio for both years to determine if the higher dividend declared in 2017 is justified.

Uploaded by

raj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
278 views3 pages

Assignment-2 FA PDF

This document contains two assignments analyzing the financial statements of two companies - Maharaja Synthetics Limited and Blue Sea Enterprises Limited. For Maharaja Synthetics Limited, students are asked to calculate various profitability, liquidity, solvency, asset utilization and return ratios for 2017 and 2016 based on income statements and balance sheets provided. For Blue Sea Enterprises Limited, students must calculate cash operating profit, operating profit, pre-tax profit and net profit for 2016 and 2017. They are also asked to analyze the company's financial performance using ratios and expense ratios, and calculate the dividend payout ratio for both years to determine if the higher dividend declared in 2017 is justified.

Uploaded by

raj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Name: _____________________ Programme ___________ Roll No.

____________

AHMEDABAD UNIVERSITY
AMRUT MODY SCHOOL OF MANAGEMENT
FINANCIAL ACCOUNTING-FAC114
EVALUATION TYPE: ASSIGNMENT – 2
TOPIC- ANALYSIS OF FINANCIAL STATEMENTS
Date: Total Marks: 20
Section No: No. of printed pages: 2

1. The balance sheets and the profit and loss accounts of Maharaja Synthetics Limited for the last two years
are given as follows: (15 Marks)

Particulars ([Link] Thousands )


2017 2016
Net sales 788,110 672,040
Other Income 15,370 18,020
Total Income 803,480 690,060
Cost of goods sold 520,460 473,290
Other operating expenses 131,970 118,190
Depreciation 22,260 20,140
Interest 32,860 24,380
Profit before tax 95,930 54,060
Taxes 28,780 16,218
Profit after tax 67,150 37,842
Dividend 16,788 9,460
Retained earnings 50,362 28,382

Balance Sheet as on 31st March


Particulars 2017 2016
Assets
Non-current assets 223,200 175,960
Cash and bank 24,202 21,200
Trade receivables 91,160 68,900
Inventories 130,210 111,300
Total Current assets 245,572 201,400
Total 468,772 377,360
Liabilities
Shareholders fund (Note 1) 232,682 182,320
Long term debt 137,800 106,000
Short term debt 58,300 58,300
Trade payables 39,990 30,740
Total current liabilities 98,290 89,040
Total 468,772 377,360

Additional Information:
1. The details of shareholders’ funds are as follows:
2016: Equity Share Capital Rs.1,00,000 (Shares of Rs.100 each)
Other Equity: Rs. 82,320
2017: Equity Share Capital Rs.1,00,000 (Shares of Rs.100 each)
Other Equity: Rs. 1,32,682
2. All Non-Current Asset are Fixed Asset.
3. Current Market Price of the company is Rs.300
4. Assume Tax rate to be 30%

Based on the information above compute and interpret:

1. Profitability Ratio
a) Gross Profit Ratio
b) Net Profit Ratio
c) Operating Profit Ratio
d) Earnings Per Share
2. Liquidity Ratio
a) Current Ratio
b) Liquid Ratio
3. Solvency Ratio
a) Debt Equity Ratio
b) Interest Coverage Ratio
4. Asset Utilization Ratio
a) Fixed Asset Turnover Ratio
b) Inventory Turnover Ratio and
Average Holding Period
c) Trade receivable Turnover Ratio
and Average Collection Period
5. Return Ratio
a) Return on Equity
b) Return on Capital Employed
6. Market Ratio
a) Price earnings ratio
b) Dividend payout
c) Dividend yield ratio
2. The year 2017 had been a great year for Blue Sea Enterprises Limited. The net profit of
the company has increased by almost 70% compared to the previous year. The
management has declared an increased dividend on its equity shares. The comparative
financials of the company for the years 2016 and 2017 are given as follows: (5 Marks)

Particulars (Rs. In millions )


2017 2016
Sales 1020 872
Other operating income 58 47
Total 1078 919
Cost of goods sold 640 502
Employee cost 90 85
Selling and administrative expenses 160 122
Depreciation 44 40
Interest (Net) 64 86
Profit before tax and extra ordinary items 80 84
Extra ordinary items 62 0
Profit before tax 142 84
Tax 50 27
Profit after tax 92 57
Dividend 45 30
Retained earnings 47 27

You are required to:


1. Calculate cash operating profit, operating profit, pre-tax profit and net profit for the
years 2016 and 2017.
2. Has the performance of the company really improved? Analyse the financial
performance using the above ratios and expense ratios.
3. Calculate the dividend pay-out ratio for the two years. Is the higher dividend
justified for the year 2017?

You might also like