Financial Analysis and Management
1. From the following details prepare and mention the relevance of comparative income statement.
2016 | 2017 | |
Sales | 150,000 | 175,000 |
Cost of Goods Sold | -90,000 | -105,000 |
60,000 | 70,000 | |
Indirect Expenses | -30,000 | -45,000 |
30,000 | 25,000 | |
Provision for tax | -8,000 | -12,000 |
Net Profit | 22,000 | 13,000 |
2. Following information is pertaining to Alpha Ltd. Estimate Net Working Capital. Calculate Net Working Capital and interpret the result.
Raw Material Cost per unit 300
Direct Labor Cost per unit 100
Overheads (excluding depreciation) Cost per unit 200
Total Cost 600
Selling Price per unit 900
Output (Production) per annum 50000 units
Raw material in stock Average 4 weeks
Work in Progress(assuming 50% completion stage with Average 2 weeks
100% material consumption)
Finished goods in stock Average 4 weeks
Credit Allowed by suppliers Average 4 weeks
Credit Allowed to Debtors Average 8 weeks
Cash at bank is expected to be 75,000
Assume 52 weeks in year and even production throughout a year. Assume all sales as credit sales.
3. The Balance Sheet is as follows:
Balance Sheet | |||
Liabilities | Amount | Assets | Amount |
Equity Share Capital | 100,000 | Fixed Assets | 1,75,000 |
12% Debentures | 84,000 | Current Assets | 75,000 |
Reserves | 16,000 | ||
Current Liabilities | 50,000 | ||
250,000 | 250,000 |
Net Sales during the year is Rs 5, 00,000. Calculate and interpret the result of:
(a) Total Capital Turnover Ratio
(b) Working Capital Turnover Ratio