Dr.

Kaustubh Arvind Sontakke SIESCOMS

Ratio Analysis
1) X Ltd. and Y Ltd. are in the same line of business. Following are their Balance Sheets as on
31/03/2018
Liabilities X Rs. Y Rs. Assets X Rs. Y Rs.
Equity share capital 700000 200000 Land 100000 80000
Reserves and surplus 100000 100000 Building 250000 200000
12% Debentures 200000 500000 Plant and Machinery 500000 300000
Creditors 120000 70000 Debtors 210000 110000
Bills payables 40000 20000 Stock 100000 200000
Proposed dividend 20000 20000 Cash and Bank 55000 40000
Provision for Tax 35000 20000
1215000 930000 1215000 930000
You are required to calculate a) Proprietary ratio b) Capital gearing ratio c) Current ratio d) Stock to WC
ratio and comment on the same.
2) Following is the Balance Sheet of Rolex Ltd. As on 31st March 2018
Liabilities Rs. Assets Rs.
Equity share capital 100000 Cash 2000
6% Preference share capital 100000 Bank 10000
7% Debentures 40000 B/R 30000
8% Public deposits 20000 Debtors 70000
Bank OD 40000 Stock 40000
Creditors 60000 Advances 20000
Unpaid dividend 10000 Furniture 33000
Outstanding expenses 7000 Machinery 100000
Reserves 150000 L&B 220000
Provision for tax 20000 Goodwill 30000
P&L A/C 20000 Preliminary exp 12000
567000 567000
Calculate all possible Balance Sheet ratios
3) The summarized financial statement of two companies are as follows
Balance Sheet
Liabilities X Ltd. Y Ltd. Assets X Ltd. Y Ltd.
Share Capital 8800 8800 Fixed Assets 12100 9680
Reserves 4290 3520 Current Assets 12540 10340
8% Debentures 2200 2200
Current Liabilities 9350 5500
24640 20020 24640 20020
Revenue statement
Particulars X Ltd. Y Ltd.
Sales 33000 26400
Less: COGS 23760 19800
Gross Profit 9240 6600
Less: Operating expenses 6380 4400
NPBT 2860 2200
Less: Tax 1201 924
NPAT 1659 1276
Less: Dividend 880 660
Retained earning 779 616
You are required to calculate the following ratios and comment. 1) Proprietary ratio 2) Cap gearing ratio 3)
GP ratio 4) Operating ratio 5) ROCE 6) ROE 7) Expenses ratio 8) NP ratio

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Dr.Kaustubh Arvind Sontakke SIESCOMS

4) Comment on the position of TELL ME Ltd. from the following financial statements after calculating
following ratios: Current ratio, Proprietary ratio, Debt-equity ratio, Stock to WC ratio, Liquid ratio,
Cost of sales to sales ratio, Admn exp ratio, S&D exp ratio.
Balance Sheet
Liabilities 2017 2016 Assets 2017 2016
Capital (FV 10) 70000 70000 Fixed assets 90000 92000
Reserves 80000 68000 Current assets 110000 112000
Secured loans 22000 24000 Loans and advances 52000 40000
Current liabilities 26000 30000
Provisions 54000 52000
252000 244000 252000 244000
Profit and Loss A/C
Particulars 2017 2016 Particulars 2017 2016
To Opening stock 44000 40000 By Sales 210000 200000
To Purchases 84000 72000 By Closing Stock 46000 44000
To Wages 40000 36000
To Factory expenses 32000 28000
To Admn. expenses 8000 6000
To Selling expenses 6000 10000
To Manager’s remuneration 2000 2000
To Transferred to reserves 2000 2000
To Income tax 22000 24000
To Proposed dividend 6000 8000
To Balance c/f 10000 16000
256000 244000 256000 244000

5) From the following particulars prepare vertical financial statements and calculate
ROCE, Debtors turnover, Stock-WC, Current ratio, Proprietary ratio
Particulars Rs.
Equity share capital (FV 10) 200000
6% Preference share capital 100000
8% Debentures 150000
Debtors 18000
Creditors 15000
Cash 20000
Bills receivables 12000
Bank OD 8000
Reserves and surplus 43000
Closing stock 32500
Provision for tax 35000
Proposed dividend 10000
Other information:
Sales Rs.1000000, Cost of Sales Rs.750000, NPBT Rs.100000

6) Tan Ltd. presents the following summarized Trading and P&L A/C and Balance Sheet for 2017-18
Particulars Rs. Particulars Rs.
To Opening stock 200000 By Sales 1200000
To Purchases 500000 By Closing stock 400000
To Wages 300000
To GP c/d 600000

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Dr.Kaustubh Arvind Sontakke SIESCOMS
1600000 1600000
To Salaries 150000 By GP b/d 60000
To Rent 60000 By Profit on sale of investments 5000
To Commission 12000 By Interest 15000
To Advt. 20000
To Interest 83000
To Depreciation 30000
To Provision for tax 50000
To NP cd 215000
620000 620000
To Proposed dividend 80000 By Balance b/d 185000
To Preference dividend 16000 By NP b/d 215000
To Balance c/d 304000
400000 400000
Balance Sheet
Liabilities Rs. Assets Rs.
Equity share capital (Rs.100 each) 800000 L&B 600000
8% Preference share capital 200000 P&M 550000
Reserves and surplus 304000 Furniture 400000
7% Debentures 500000 Investments 270000
Loan from IDBI 600000 Stock 400000
Creditors 150000 Debtors 200000
Bills payables 50000 Bills receivables 160000
Provision for tax 50000 Advanced tax 30000
Dividend payables 96000 Prepaid expenses 40000
Cash 20000
Bank 60000
Discount on issue of shares 20000
2750000 2750000
Additional information:
1. The market price of equity shares as on 31st March 2018 was Rs.90.
2. Out of total sales, 30% are cash sales
3. Out of total purchases, 50% are credit purchases
4. Calculate ROCE, Creditors TO, ROEC, Debt service coverage ratio.

7) Following is the summarized Balance Sheet of Sam Ltd. as on 31.3.18

Liabilities Rs. Assets Rs.
Equity share capital (Rs.10 each) 400000 Goodwill 125000
9% Pref. Cap (Rs.100 each) 200000 Furniture 300000
General reserve 100000 L&B 400000
Profit and loss A/C 100000 Stock 100000
10% Mortgage loan 200000 Debtors 200000
Accounts payables 100000 Cash and Bank 60000
Advance from customers 50000 Prepaid expenses 40000
Provision for tax 60000 Preliminary expenses 15000
Proposed dividend 40000 Discount on issue of debentures 10000
1250000 1250000
The following further information is also given for the year
Total Sales Rs.1000000, Net profit rate – 15%, Cash sales 20%, Purchases Rs.500000, No. of days in a year
360. Calculate Proprietary ratio, Capital gearing ratio, Acid test ratio, Operating ratio, Creditors TO.

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