Analysis of Financial Statements — DU B.Com. (Hons.) Previous Year Question Papers

Type of the Paper : DSE 4.4 Q1. a) Explain the meaning, importance and limitations of Financial Statement Analysis. b) Discuss how financial statement analysis assists: Q1. a) Explain the following  Comparative Financial Statements  Common-size Financial Statements  Trend Analysis b) Discuss their advantages, limitations and suitability for inter-firm and intra-firm comparison. (9+9) Q2. The Balance Sheets of PR Ltd. are given below: Equity Share Capital 20,00,000 28,00,000 Reserves & Surplus 8,00,000 12,00,000 Long-term Debt 10,00,000 18,00,000 Fixed Assets 28,00,000 42,00,000 a) Prepare Comparative Balance Sheet. b) Prepare Common-size Balance Sheet. c) Interpret liquidity and solvency position. (6+6+6) Q2. The Income statement of RP Ltd. are given below: Cost of Goods Sold 52,00,000 76,00,000 Other Operating Expenses 12,00,000 18,00,000 a) Prepare Comparative Income Statement. b) Prepare Common-size Income Statement c) Analyse reasons for change in profitability. (6+6+6) Q3. From the following: J Ltd. C Ltd. Industry Average Current Ratio 1.2 2.0 1.8 Debt-Equity Ratio 3:1 0.8:1 1.5:1 Inventory Turnover 5 times 8 times 7 times Net Profit Ratio 10% 8% 9% a) Compare financial performance of both companies. b) Identify stronger company with reasons. c) Evaluate liquidity, solvency and efficiency. (6+6+6) Q3. G ltd. has:  Current Ratio = 2.5 : 1  Quick Ratio = 1.4 : 1  Current Liabilities = ₹20,00,000 i. Current Assets ii. Quick Assets iii. Inventory b) Analyse whether high current ratio and Quick Ratios always Good for company. c) Explain relationship between Current Ratio and Quick Ratio. (6+6+6) Q4. RG Ltd. Balance Sheets as at 31 March 2025 and 31 March 2026. (R in Lakhs) EQUITY AND LIABILITIES Equity Share Capital 120 170 Securities Premium 10 18 General Reserve 20 30 Profit & Loss A/c 24 40 Trade Payables 36 48 Outstanding Expenses 10 14 Provision for Tax 16 24 Land & Building 90 130 Plant & Machinery 120 210 Trade Receivables 18 32 Cash & Cash Equivalents 10 20 Additional Information: 1. Depreciation charged on Plant & Machinery during the year amounted to 724 lakh. 2. A machine costing 730 lakh with accumulated depreciation of R12 lakh was sold for 3. Investments costing 710 lakh were sold at a profit of 20%. 4. Dividend paid during the year amounted to R18 lakh. 5. Income tax paid during the year amounted to R14 lakh. (18) Q4. JC LTD. Balance Sheets as at 31 March 2024 and 31 March 2025. (R in Lakhs) EQUITY AND LIABILITIES Equity Share Capital 140 210 Securities Premium 12 22 General Reserve 26 40 Profit & Loss A/c 30 52 Trade Payables 42 60 Outstanding Expenses 12 18 Provision for Tax 20 30 Land & Building 110 170 Plant & Machinery 150 270 Trade Receivables 22 38 Cash & Cash Equivalents 14 22 Additional Information 1. Depreciation charged on Plant & Machinery during the year amounted to 730 lakh. 2. A machine costing 340 lakh with accumulated depreciation of R16 lakh was sold for