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

Question 1: What do you understand by financial statements? Explain the advantages and limitations of financial statements. Question 1: Explain the purpose of preparing a Balance Sheet for a company. Describe in detail the format of the Balance Sheet as prescribed in Schedule Ill of the Companies Act, 2013. Question 2: (a) The following Balance Sheet extract of ABC Itd. shows key financial items for three consecutive years: Balance Sheet Extract (& in Lakhs) Equity share Capital 200 200 200 Reserve and Surplus 100 120 150 Long-Term Loans 150 180 210 Current-Liabilities 80 90 120 Fixed Assets 300 350 400 Current Assets 230 240 300 Calculate the Trend percentage for all the balance sheet items for the years 2023 and 2024. (b) Distinguish between Horizontal and Vertical Analysis. Question 2: Define financial Statement Analysis. Explain its objectives and importance for management, investors, and creditors. Explain the classification of comparative statements and explain how this classification helps in understanding performance trends and financial stability of a business. Question 3: From the Following particulars extracted from the book of Ashok & co. Itd. compute the following ratios: 1) Current Ratio 2) Absolute Liquidity Ratio 3) Stock-Turnover Ratio 4) Debtor's Turnover Ratio 5) Creditor's Turnover ratio 6) Average Debtor's Collection Period Bills Receivables 30,000 60,000 Bills Payables 60,000 30,000 Sundry Debtors 1,20,000 1,50,000 Sundry Creditors 75,000 1,05,000 Stock-in-Trade 96,000 1,44,000 Additional Information: a) on 31.12. 2024 there were assets (b) Cash Purchases: & 1,38,000, Purchase Return: 18,000 ( c) Cash Sales: < 1,50,000 Sales Return: 6,000 Rate of Gross Profit: 25% on Sales Actual Gross Profit: 1,50,000 Question 3: Following is the summarized Balance Sheet of Mona Ltd. As n 31" March Particulars Particulars Equity Shares of & 10 Each 10,00,000 Fixed Assets 20,00,000 Reserves and Surplus 7,00,000 Investments 2,00,000 Preference Shares of & 100 Each 4,00,000 Closing Stock 2,00,000 15% Debentures 5,00,000 Bills Receivables 60,000 Sundry Creditors 2,40,000 Cash at Bank 60,000 Bank Overdraft 1,60,000 Sundry Debtors 4,60,000 Preliminary Expenses 20,000 TOTAL 30,00,000 TOTAL 30,00,000 Summarized Income Statement is as under for the year ending on 31.03. 2025: Less: Cost of Goods Sold 56,00,000 Gross Profit 24,00,000 Less: Operating Expenses (Including Depreciation) (15,00,000) Earnings Before Interest and Tax 9,00,000 Less: Interest Cost (75,000) Earnings Before Tax 8,25,000 Less: Tax Liability (50%) 4,12,500 Earnings After Tax (EAT/PAT) 4,12,500 Less: Preference Dividend 40,000 Earnings Available to Equity Shareholders 3,72,500 Calculate the following ratios: a. Return on Capital Employed b. Return on Equity Shareholder's Fund c. Return on Shareholder's Fund d. Proprietary Ratio e. Debt-Equity Ratio f. Capital Gearing ratio Question 4: Presented Below is the comparative Balance Sheet of Jyoti Ltd. As at 31st