Question: Financial Statement Preparation and Analysis

You are provided with the trial balance of KTC Limited as of 31/3/2023. As part of your role as a financial analyst, you are tasked with p
statements and conducting a comprehensive ratio analysis:
Balance Sheet: Prepare a classified balance sheet for KTC Limited Company. Ensure you categorize assets and liabilities into cu
Include
Profit andappropriate Construct
headings
Loss Statement: a profit and loss statement for XYZ Company for the financial period ending on [specific d
and subtotals.
Analysis:ofPerform
components
Ratio revenueaand
ratioexpenses.
analysis using relevant
Highlight financial ratios.
the company's Includeor
net income calculations
loss. for at least three liquidity ratios, thr
solvency ratios. Provide insights into the company's financial health based on your analysis.
a. Liquidity Ratios: Include ratios such as current ratio, quick ratio, and cash ratio.
b. Profitability Ratios: Include ratios such as gross profit margin, operating profit margin, and net profit margin.
c. Solvency Ratios: Include ratios such as debt to equity ratio, interest coverage ratio, and debt ratio.
Note: Make sure to specify the date for which the financial statements are prepared and indicate any assumptions necessary for completi
encourages students to apply their knowledge of balance sheet preparation, profit and loss statement analysis, and financial ratio interpre
In the 'worksheet' tab, you will find 6 tables as you scroll to the right.
1. Trial Balance
2. Notes to Accounts
3. Balance Sheet
4. Profit and Loss statement
5. Cashflow statement
6. Ratios

Based on the trial balance, fill the entries in Table No.2,3,4,5.

Please enter your inputs the cells filled with grey.

Make sure that in all the tables, you enter the cell address from relevant line elements from trial balance.
For ex: If you have to fill D55(Notes to accounts) instead of filling '47597.69' from E25, use the formula '=+E25'
This will ensure the entire sheet is dynamic.

All the best!

 KTC LIMITED
CIN OF KTC LTD
REGISTERED OFFICE: Registered Address Of KTC LTD
Trial Balance
In ₹ Lakhs, except number of shares which are reflected in thousands per shar
S.No Particular
1 Property, Plant and Equipment
2 Capital Work-in-Progress
3 Investment Property
4 Goodwill
5 Other Intangible Assets
6 Other Intangible Assets Under Development
7 Right of Use Assets
8 Non-Current Investments
9 Loan
11 Other Non-Current Assets
12 Inventories
13 Current Investments
14 Trade Receivables
15 Cash and Cash Equivalents
16 Other Bank Balances
17 Short Term Loans and Advances
19 Other Current Assets
20 Equity Share Capital
21 Reserve and Surplus
22 Long Term Borrowings
23 Lease Liabilities
25 Short Term Provisions
26 Deferred Tax Liabilities (Net)
27 Short Term Borrowings
28 Total
Total Outstanding
Outstanding Dues
Dues of
of Micro Enterprises
Creditors andMicro
Other Than SmallEnterprises
Enterprisesand Small
29 Enterprises
31 Other Financial Liabilities
32 Other Current Liabilities
34 Current Tax Liabilities (Net)
35 Revenue From Operation
36 Other Income
37 Cost of Materials Consumed
38 Purchases of Stock-in-Trade
39 Changes in Inventories of Finished Goods, By-Products and Work in Progress
40 Excise Duty
41 Employee Benefits Expenses
42 Finance Costs
43 Depreciation and Amortisation Expenses
44 Other Expenses
45 Exceptional Items
46 Current Tax Expenses
47 Deferred Tax Expenses
Total

Notes To Accounts
 In ₹ Lakhs, except number of shares which are reflected in thousands per shar
S.No Particular
Reserve and Surplus
1 Reserve and Surplus Opening Balance
Add: Profit for the Year
Total

2 Other Long Term Liability

Lease Liability
Other Financial Liabilities
Total

3 Other Current Liability

Other Current Liabilities
Current Tax Liabilities (Net)
Total

4 Intangible Assets
Goodwill
Other Intangible Assets
Other Intangible Assets Under Development
Total

5 Other Non-Current Assets

Investment Property
Right of Use Assets
Loan
Other Non-current Assets
Total

6 Cash and Bank Balances

Cash and Cash Equivalents
Other Bank Balances
Total

7 Other Expenses
Excise Duty
Other Expenses
Total
 KTC L
CIN OF
ress Of KTC LTD REGISTERED OFFICE: Re
STANDALONE BALANCE SH
n thousands per share amount In ₹ Lakhs, except number of shares which
Amount Dr Amount Cr
20,491.32
Particulars
1,681.47
352.26 I. EQUITY AND LIABILITIES
577.20
2,037.42 1 Shareholder's Fund
15.13 (a)
715.91 (b)
16,363.55
4.07 2 Share Application Money Pending Allotm
4,819.97
10,593.90 3 Non-Current Liabilities
16,357.07 (a)
2,321.33 (b)
206.88 (c)
3,624.38
5.95 4 Current Liabilities
2,093.93 (a)
1,242.80 (b)
47,597.69
3.28
320.13
265.42
1,621.13 (c )
1.26 (d)
137.50
4,213.76
1,883.17
5,446.16 II. ASSETS
776.13
70,251.28 (1) Non-Current Assets
2,437.61 (a) Property, Plant and Equipment and Intangible A
19,809.83 (i)
9,109.85 (ii)
- 39.50 (iii)
4,208.01 (b) Non-Current Investments
3,569.46 (c ) Deferred Tax Assets (Net)
41.81 (d) Other Non-Current Assets
1,662.73
9,649.16 (2) Current Assets
- 72.87 (a) Current Investments
6,025.32 (b) Inventories
- 28.22 (c) Trade Receivables
136,197.32 136,197.32 (d) Cash and Bank Balances
(e ) Short Term Loans and Advances
(f) Other Current Assets
n thousands per share amount
Amount Total Amount

47,597.69 As per our report of even date attached.

18,753.31
66,351.00 For
Chartered Accountants
Firm's Registration Number -
320.13
1,883.17
2,203.30 (CA )
Membership No.
Partner/Proprietor
5,446.16
776.13 Place:
6,222.29 Dated
:

577.20
2,037.42
15.13
2,629.75

352.26
715.91
4.07
4,819.97
5,892.21

206.88
3,624.38
3,831.26

4,208.01
9,649.16
13,857.17
 KTC LIMITED
CIN OF KTC LTD
REGISTERED OFFICE: Registered Address Of KTC LTD
STANDALONE BALANCE SHEET AS AT 31ST MARCH, 2023
In ₹ Lakhs, except number of shares which are reflected in thousands per share amount

Particulars Note As at 31st March,

No. 2023
EQUITY AND LIABILITIES

Shareholder's Fund
Share Capital 1,242.80
Reserve and Surplus 1 66,351.00

Share Application Money Pending Allotment

Non-Current Liabilities
Long Term Borrowings 3.28
Deferred Tax Liabilities (Net) 1,621.13
Other Long Term Liabilities 2 2,203.30

Current Liabilities
Short Term Borrowings 1.26
Trade Payables:
(A) Total Outstanding dues of Micro Enterprise and
Small Enterprise 4,213.76
(B) Total Outstanding dues of Creditors Other than
Micro Enterprise and Small Enterprise 137.50
Other Current Liabilities 3 6,222.29
Short Term Provisions 265.42

Total Liabilities 82,261.74

Non-Current Assets
Property, Plant and Equipment and Intangible Assets
Property, Plant and Equipments 20,491.32
Intangible Assets 4 2,629.75
Capital Work-in-Progress 1,681.47
Non-Current Investments 16,363.55
Deferred Tax Assets (Net)
Other Non-Current Assets 5 5,892.21

Current Assets
Current Investments 16,357.07
Inventories 10,593.90
Trade Receivables 2,321.33
Cash and Bank Balances 6 3,831.26
Short Term Loans and Advances 5.95
Other Current Assets 2,093.93
 Total Assets 82,261.74

r our report of even date attached.

For and on behalf of the Board of Directors

ered Accountants
s Registration Number -

Name Of Director
ership No. Director
r/Proprietor DIN OF Director
 KTC LIMITE
TC LTD CIN OF KTC L
H, 2023 STANDALONE PROFIT AND LOSS ACCOUNT FOR
ds per share amount In ₹ Lakhs, except number of shares which are re
(Rs.)
Particulars
As at 31st March,
2022
I. Revenue From Operations

II. Other Income

1,232.33 ###
47,597.69 III. Total Revenue( I+II)

IV. Expenses:
Cost of Materials Consumed
Purchase of Traded Goods
4.54
1,667.14 Changes in Inventories of Finished Goods, By-Products and Wo
356.29 Employee Benefits Expense
Finance Costs
Depreciation and Amortisation Expense
0.74 Other Expenses

100.96 Total Expenses (IV)

4,122.44 Exceptional Item
V. Profit Before Tax ( III-IV)

7,198.35 VI. Tax Expense

242.47 Current Tax
Deferred Tax
62,522.95 Income Tax Relating to Earlier Years
VII. Profit for the Year

VIII. Earnings per Equity Share (Nominal Value per Share R

- Basic (Rs.)
- Diluted (Rs.)
6,989.60
3,321.10 As per our report of even date attached.
2,442.34
16,021.52 For
Chartered Accountants
Firm's Registration Number -

11,624.95 (CA )
9,997.77 Membership No.
1,952.50 Partner/Proprietor
3,877.94
5.06 Place:
6,290.17 Dated:
 62,522.95

half of the Board of Directors

Name Of Director
Director
DIN OF Director
 KTC LIMITED
CIN OF KTC LTD
D LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2023
shares which are reflected in thousands per share amount In ₹ La
Note Amount
Particulars No. 31st March, 2023

70,251.28 1

2,437.61

72,688.89

19,809.83
9,109.85

d Goods, By-Products and Work-in-Progress (39.50)

3,569.46
41.81
1,662.73
7 13,857.17

48,011.35 i
72.87
24,750.41 2

6,025.32
- 28.22 ii

18,753.31
3
Nominal Value per Share Rs. /-)
15.09
15.09
iii

For and on behalf of the Board of Directors

As per our report

For
Name Of Director Chartered Accoun
Director Firm's Registratio
DIN OF Director

(CA )
Membership No.
Partner/Proprietor

Place:
Dated
:
 KTC LIMITED
CIN OF KTC LTD
STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH,
In ₹ Lakhs, except number of shares which are reflected in thousands per sh
Particulars

Cash Flow From Operating Activities

Net Profit After Depreciation but Before Tax
Adjustment For Non Cash Expense
Depreciation
Adjustment in the Working Capital
Short Term Borrowing
Trade Payable
Other Current Liability
Short Term Provision
Current Investment
Inventory
Trade Receivable
Deferred Tax Liabilities (Net)
Short Term Loan
Other Current Assets
Current Tax
Net Cash Flow From Operating Activity

Cash Flow from Investing Activities

Purchase of PPE
Non-Current Assets
Long term Loan and Advances
Net Cash Flow From Investing Activity

Cash Flow from Financing Activities

Long Term Borrowing
Other Long Term Liabilities
Share Capital
Net Cash Flow From Financing Activity

Net Cash Flow(i+ii+iii)

Opening Balance of Cash and Cash Equivalent
Closing Balance of Cash and Cash Equivalent
As per our report of even date attached.

Chartered Accountants
Firm's Registration Number -

Membership No.
Partner/Proprietor
NDED 31ST MARCH, 2023
thousands per share amount Categorisation
Note Year Ended 1
No. 31st March, 2023
Liquidity

24,750.41

1,662.73 2

1.26 Solvency
4,351.26
6,222.29
265.42
16,357.07 3
10,593.90
2,321.33
1,621.13 Solvency
5.95
2,093.93
- 5,997.10
64,249.58 4
Solvency

20,491.32 5
Solvency
26,566.98
5.95
47,064.25 6

Efficiency

3.28
2,203.30 7
Efficiency
1,242.80
3,449.38
8
114,763.21
Profitability
3,877.94
118,641.15

For and on behalf of the Board 9

of Directors Profitability

10
Profitability
Name Of Director
Director
DIN OF Director 11
Efficiency

12
Efficiency

13
Profitability

14
Profitability

Should KT
KTC Ltd can take the lo
 RATIO ANALYSIS
Particulars Ratio
CURRENT RATIO (In Times)
(Total Current Assets / Current Liabilities) 3.25

NET DEBT EQUITY RATIO(In Times)

(Net Debt/ Average Equity) 0.251975
Net Debt = Long Term Borrowing 14,667.94
Equity = Equity Share Capital+ Reserve & Surplus 116423.82
Average Equity =(Closing Balance of Equity + Opening Balance of Equity)/2 58211.91

DEBT SERVICE COVERAGE RATIO (In Times)

EBIT/ Net Finance Charges 2.29
EBIT = Profit before taxes + Net Finance Charges 43,881.58
Net Finance Charge = Net Finance Cost 19,131.17

CURRENT LIABILITY RATIO ( In Times)

(Total Current Liabilities/ Total Liabilities) 0.74

TOTAL DEBTSBorrowings+
(Non-current TO TOTAL ASSET RATIO
Current Borrowings+Non-Current and Current 0.16
Lease Liabilities )/ Total Assets

DEBTORS TURNOVER RATIO ( In Times)

(Net Sales/Average
Average Account Receivable)
Account Receivable = (Closing Account Receivable + Opening Account 32.88
Receivable)/2 2136.915

INVENTORY TURNOVER RATIO ( In Times)

COGS/Average Inventory 0.826909134
Average inventory=(Closing inventory+opening inventory)/2 10295.835
NET PROFIT MARGIN(%)
(Net Profit after tax/ Turnover) 26.69

Turnover = Revenue From Operations

NET WORTH
(Equity Share Capital + Other Equity+ Hybrid Perpetual Securities) 67,593.80

RETURN ON EQUITY (%)

(Profit after Preference Dividend / Average Equity Shareholders) 32.21559
Average Equity Shareholder = (Closing Share Capital + Opening Share Capital)/2 58211.91
 TRADE PAYABLES TURNOVER RATIO ( In Times)
(Purchases / Average Trade Payables) 2.01
Average Trade Payable = (Closing Trade Payable+ Opening Trade Payable)/2 4236.85

NET CAPITAL TURNOVER RATIO ( In Times)

(Turnover / Average Working Capital) 1.04

RETURN ON CAPITAL EMPLOYED (%)

(Earning before Interest and Tax / Capital Employed) 34.65

RETURN ON INVESTMENT (%)

(Profit After Tax / Total Average Investment) 62.13

Should KTC consider to take the loan from LBMG Bank? Prov
KTC Ltd can take the loan as it can repay its financial obligations on time, it is generating profits and low risk of bankruptcy. The Co

Working Notes
Capital Employed = Total Assets - Total Liabilities 71,421.51

Average Working Capital 2061.905

Total Average Investment 30183.545

Investment for the year 20232 27,646.47
Investment for the year 2023 32,720.62

Equity for 2023 67,593.80

Equity for 2022 48,830.02
Average Equity 58211.91

Purchases = Beginning Inventory + Net Purchases – Ending Inventory 8,513.72

ANALYSIS
Conclusions from the ratios
Higher current ratio means more company has more current assets than liabilities. This m

Low D/E ratio of 0.25 is very good as it indicates the company can repay its financial o

Company has the Debt-Service Coverage Ratio of 2.29, which is good. This means company is

Less than 1 ratio means the company has more assets than the liabilities. Hence 0.74 ratio

0.16 is a low Debt to Asset ratio, that means the company has more assets than debts. He

32.88 is a desirable Debtors Turnover ratio which implicates the company collectes its ac

Lower than 1 inventory turnover ratio indicates weak sales and accumulated stock.

26.69% Net profit margin mean KTC Ltd. is able to effectively control its costs. Hence it c

Positive net worth means company is having stability. It has surplus to fund its owners

Company has good return on equity. 32.21% indicates its equity generating good profits
 This indicates company is paying slowing to suppliers for purchases on credit.

KTC's Working capital turnover ratio indicates its generating steady sales in the busine

34.65% ROCE is a good indicator. This means the company a higher ROCE is always favora

ROI is a measure of an investment's profitability. The associated costs are low and total r

BMG Bank? Provide reasons for your answers

and low risk of bankruptcy. The Company has weak sales and stock accumulation. So for better cash