Why is the government interested in analysing financial statements ? 

1

(a)

On the basis of analysis of financial statements, government can judge which industry is progressing on the desired lines and which industry needs help.

How the solvency of business is assessed by ' Financial Statement Analysis' ?

1

(a)

Solvency of business is assessed by applying solvency ratios, e.g., debt equity ratio, proprietary ratio, total assets to debt ratio and interest coverage ratio.

State why shareholders are interested in Financial Statement Analysis

1

(a)

Shareholders are inerested in the profitability, dividents, market value of their holding and long-term solvency of bthe business concern.

State the interest of investors in the analysis of financial statements.

1

(a)

Inverters are intrested in the safty of their capital as well as apprteciation of their capital through financial analysis.

State how financial statement analysis is considered historical in nature.

1

(a)

Financial statements analysis is considered as historical in nature because the analysis is made on data which is of past and not of furture.

State how does financial statement analysis ignore price level changes.

3

(a)

Prepare a comparative Statement of Profit and Loss from the following information:

Particulars	Note No.	2011-12	2010-11
Revenue from Operations		50,000	40,000
Cost of Material Consumed		35,000	30,000
Other Expenses		3,000	2,500
Other Income		2,000	3,000
Income Tax		7,500	4,750

3

(a)

From the information given below, prepare a Comparative Statement of profit  and loss:

Particulars	Note  No	2012-13	2011-12
Revenue from Operations		Rs.3,50,000	Rs.2,00,000
Purchases of stock-in-Trade		Rs.2,00,000	Rs.1,00,000
Cost of Revenue from Operations		70% of Revenue from operations	60% of Revenue from Operations
Employee Benefit Expenses		Rs.7,350	Rs.4,000
Income Tax		45%	45%

3

(a)

From the following information, prepare a Comparative Balance Sheet of Deep Ltd.

Particulars	Note No.	31.03.2013 Rs.	31.03.2012 Rs.
I. Equity and liabilities
Share Capital		25,00,000	25,00,000
Reserves and Surplus		6,00,000	5,00,000
Long-term Loans		15,00,000	15,00,000
Trade Payables		5,50,000	5,00,000
Total		51,50,000	50,00,000
II. Assets
Fixed Assets		36,00,000	30,00,000
Current Assets		10,50,000	15,00,000
Non-current Investments		5,00,000	5,00,000
Total		51,50,000	50,00,000

3

(a)

From the following information of A Ltd. and B Ltd. for the financial year ending on March 31,2013,prepare a Common-size Balance sheet and comment on their financial position.

Particulars	A Ltd. Rs.	B ltd. Rs.
I. Equity and liabilities
Share Capital	6,00,000	8,00,000
Reserves and Surplus	3,00,000	2,50,000
Current Liabilities	1,00,000	1,50,000
Total	10,00,000	12,00,000
II. Assets
Fixed Assets	4,00,000	7,00,000
Current Assets	6,00,000	5,00,000
Total	10,00,000	12,00,000

3

(a)

What is the main objective of preparing comparative balance sheet?

3

(a)

Identify the values involved in comparative analysis and common size statement. 

3

(a)

From the following statement of profit and loss of Fenox Ltd for the year ended 31st march,2015, prepare a comparative statement of profit and loss.

Particulars	Note No	2014-15(Rs)	2013-14(Rs)
Revenue from Operations		8.00,000	6,00,000
Other Incomes		1,00,000	50,000
Expenses		5,00,000	4,00,000

Rate of income tax was 40%

8

(a)

Rearrange the following in the form of a comparative income statement or statement of profit and loss.

Particulars	31st March, 2014 Amt(Rs)	31st March,2015 Amt(Rs)
Revenue from Operations (Net Sales)	16,00,000	19,20,000
Purchase of Stock-in-trade	9,00,000	11,00,000
Changes in Inventories of stock-in-trade	1,00,000	60,000
Other Expenses
Office and And Administration	2,80,000	3,80,000
Selling and Distribution	1,80,000	1,40,000
General Expenses	20,000	10,000

8

(a)

Prepare common size income statement from the following Staement of profit and loss.

Particulars	31st March,2014 Amt(Rs)	31st march,2015 Amt(Rs)
I.Income
Revenue from Operations(Net Sales)	5,00,000	5,00,000
Other Income	5,000	5,500
Total	5,05,000	5,05,000
II.Expenses
Purchase of Stock-in-trade	3,25,000	3,50,000
Changes in Inventories of Stock-in-trade	25,000	24,000
Employees Benefit Expenses	40,000	49,000
Other Expenses	58,750	45,000
III.Profit(I-II)	56250	37500
Total	4,48,750	4,68,000

8

(a)