Scribd Logo
Upload

Welcome to Scribd!

  • 19 views

    Ma

    Uploaded by

    Aashay
    The document provides the balance sheet of Praful Ltd. for the years 2015, 2016 and 2017. It then requires the preparation of a trend percentage statement in vertical form to analyze changes in assets, liabilities and capital employed over the years.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Ma

    Uploaded by

    Aashay
    19 views6 pages
    The document provides the balance sheet of Praful Ltd. for the years 2015, 2016 and 2017. It then requires the preparation of a trend percentage statement in vertical form to analyze changes in assets, liabilities and capital employed over the years.

    Original Description:

    H

    Original Title

    ma

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document provides the balance sheet of Praful Ltd. for the years 2015, 2016 and 2017. It then requires the preparation of a trend percentage statement in vertical form to analyze changes in assets, liabilities and capital employed over the years.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views6 pages

    Ma

    Uploaded by

    Aashay
    The document provides the balance sheet of Praful Ltd. for the years 2015, 2016 and 2017. It then requires the preparation of a trend percentage statement in vertical form to analyze changes in assets, liabilities and capital employed over the years.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 6

    Name : Anjali Chamariya Roll No. 106 Sub.

    : Management Account

    Illustration 13:
    From the following Balance Sheet of Praful Ltd., prepare Trend Porcentage Statement in
    vertica form:

    Balance Sheet as on 31st March


    Particular 2015(₹) 2016(₹) 2017(₹)
    Equity and liabilities:
    Equity share capital 200000 200000 200000
    8% preference share 100000 100000 100000
    capital
    General reserve 20000 22000 42000
    Debentures 75000 100000 90000
    Bills payable 5000 7000 10000
    Creditors 15000 10000 24000
    TOTAL 415000 489000 466000
    Assets:
    Fixed asstes 150000 200000 200000
    Investments 100000 150000 100000
    Cash 50000 25000 40000
    Debtors 70000 60000 63000
    Stock 40000 50000 60000
    Preliminary Expenses 5000 4000 3000
    TOTAL 415000 489000 466000
    SOLUTION

    PRAFUL LTD.
    Trend Analysis of Balance Sheet
    Particula Absolute Trend %
    rs Amounts Base
    year
    2015
    2015 2016 2017 2015 2016 2017
    I.
    Sources
    of Fund
    1.Shareh
    olders
    Funds
    a.
    Capital
    Equity 200000 200000 200000 100 100 100
    share
    capital
    8% pref. 100000 150000 100000 100 150 100
    Share
    capital
    Capital 300000 350000 300000 100 117 100
    b.
    Reserve
    and
    Surplus
    General 20000 22000 42000 100 110 210
    reserves
    320000 372000 342000 100 116 107
    c. Less: 5000 4000 3000 100 80 60
    Prelimin
    ary
    expense
    s
    2. Own 315000 368000 339000 100 117 108
    Funds
    3. Loan
    Funds
    Debentu 75000 100000 90000 100 133 120
    res
    CAPITAL 390000 468000 429000 100 120 110
    EMPLOY
    ED(1+2)
    II.
    APPLICA
    TION OF
    FUNDS
    1.Fixed 150000 200000 200000 100 133 133
    Assets
    2. 100000 150000 100000 100 150 100
    Investme
    nts
    3.
    Working
    Capital
    a.
    Current
    Assets
    Cash 50000 25000 40000 100 50 80
    Debtors 70000 60000 63000 100 86 90
    Stock 40000 50000 60000 100 125 150
    Current 160000 135000 163000 100 84 102
    Assets
    (a)
    b. Less:
    Current
    Liabilitie
    s
    Bills 5000 7000 10000 100 140 200
    payable
    Creditor 15000 10000 24000 100 67 160
    s
    Current 20000 17000 34000 100 84 170
    Liabilitie
    s (b)
    Working 140000 118000 129000 100 84 92
    Capital
    (a-b)
    CAPITAL 390000 468000 429000 100 120 110
    EMPLOY
    ED(1+2+
    3)
    Illustration 30 :
    Following is the Balance Sheet of Bliss and Happiness Ltd., as at 31st March, 2017.
    Balance Sheet as on 31st March, 2017

    Liabilities ¹ Asstes ¹
    Equity share 100000 Machinery 296000
    capital
    General reserve 70000 Investments 112000
    10% Preference 180000 Stock in trade 101000
    capital
    15% Debentures 120000 Bills Receivables 20000
    Trade payables 122000 Trade 49000
    Receivable
    Bank Overdraft 20000 Cash and Bank 38000
    Provision for tax 18000 Profit and loss 14000
    A/c
    TOTAL 630000 TOTAL 630000
    Sales for the year 7,00000; Gross Profit Rate - 25% and Opening Stock is 1,09,00. Prot
    Before Tax for the year ending 31-3-2017 is ¹ 210000.
    You are required to compute the following ratios and comment on Current
    Ratio. (i)Current Ratio
    (ii) Acid Test Ratio
    (iii) Stock Turnover Ratio
    (iv) Capital Gearing Ratio
    (v) Proprietory Ratio
    (vi) Debt Equity Ratio ( Debt/ Net Worth )
    (vii) Return on Capital Employed
    Redrafting the given Balance Sheet in vertical format is not expected.

    SOLUTION:

    1. Current Ratio= Current Assets


    ----------
    Current Liabilities
    - 1,01,000 + 20,000 + 49000+38000
    -------------------------------------------------
    1,22,000 + 20,000 + 18,000
    = 208000
    -----------------

    1,60,000
    = 1.30 : 1
    2. Acid Test Ratio = Quick Asset
    3. --------------------------
    4. Quick Liabilities
    = current asset - stock
    --------------------------------
    Current liabilities- bank OD
    = 208000-101000
    ---------------------------------------
    160000-20000
    = 107000
    -------------
    140000
    = 0.75 : 1
    3. Stock Turnover Ratio = Cost of Goods Sold
    ------------------------------
    Average Stock
    = Sale x (100-25%)
    ------------------------------
    (Opening stock + Closing stock) ÷ 2
    = 700000 x 75%
    -----------------
    (109000 + 101000) x 1/2
    = 525000
    ----------------
    105000
    = 5 Times
    4. Capital Gearing Ratio = Preference Shares + Debentures
    -----------------
    Equity Shareholders Fund
    = 180000 + 120000
    ------------------
    100000 + 70000 - 14000
    = 100000 + 70000 - 14000 + 180000
    -------------------------
    630000 - 14000
    = 336000
    ----------- x 100
    616000
    = 0.55 : 1
    6. Debt Equity Ratio = Debt
    -------------
    Net Worth
    = 120000
    -----------
    336000
    = 0.36 : 1

    7. Return on Capital Employed = NPBIT


    ----------- x 100 Capital
    Employed
    = 210000 + (15% x 120000)
    --------------
    336000 + 120000
    = 228000
    -------------
    456000
    = 50%

    Note: Capital Employed = Proprietor's Fund + Debentures

    8. Comment on Current Ratio: Current Ratio 1: 30, being below the Standard 2,
    is not Satisfactory.

    You might also like