The ratios for the firm are: With the following ratios and further information given below, prepare a Trading, Profit and Loss Account and Balance Sheet: Extract from financial accounts of X, Y, Z Ltd. are: Following is the summarised Balance Sheet of a concern as at 31st December: Current Ratio is 2.9. For example, maturity of debentures cannot be identified with ratio analysis. Task: Students will be required to use the financial ratio analysis question available on moodle and in the subject outline. Problem 7. Calculate stock turnover ratio from the following information : Opening stock 5 8,000, Purchases 4,84,000, Sales 6,40,000, Stock Turnover Ratio = Cost of Goods Sold / Average Stock. Items ($ in Lakhs), Sales 17874, Sales Returns 4, Other Incomes 53, Cost of Sales 15440, Administration and Selling Exp. From the following details of a trader you are required to calculate : (iii) Percentage of Gross profit to turnover, Sales $ 33,984 Stock at the close at cost price 1814, Sales Returns 380 G.P. We use Microsoft Corporation's 2004 financial statements for illustration purposes throughout this reading. Practice the concepts of Ratio and Proportion at MBA section of jagranjosh.com and prepare well … Current ratio which let us know the short term solvency of a firm. 1, 00,000. Bills Receivable from the buyer of fixed assets, should be excluded. 1. The performance of Debt Collection Department is poor. This video helps you to learn Calculation of Financial Ratios with the help of practical example Financial Performance Analysis (MBA project) January 2019; DOI: 10.13140/RG.2.2.33643.39203. Problem 9. It means the firm depends on outside liabilities. "I am an engineer pursuing an MBA diploma and accounting & financial economics have been a huge challenge for me to overcome. Here Get quiz on the Learn Commarce Quiz Quiz of questions that can be used for self-study, homework. address all of these questions through financial analysis. So get preparation for the MBA Finance job interview . PROBLEMS AND SOLUTIONS Type 1: Final Account to Ratio Problem 1. Investors and creditors use accounting information to evaluate the ﬁ rm. A low ratio may be result of inferior quality goods, stock of un-saleable and absolute goods. 2 RATIO ANANLYSIS Introduction The ratio analysis is the most powerful tool of financial analysis. Content Filtration 6. Problem 6. Comment on the financial position of the Company i. e., Debt – Equity Ratio, Fixed Assets Ratio, Current Ratio, and Liquidity. Account Disable 11. A/c 30,000 Stock 30000, Secured loan 80,000 Sundry Debtors 30000, Sundry creditors 50,000 Advances 10000, Provision for taxation 20,000 Cash Balance 10000, 3,00,000 300000, Debt – Equity = Long – Term Debt / Shareholders Fund, Shareholder’s Fund= Equity Share Capital + Reserves + P.L.A/c, = 1,00,000 + 20,000 + 30,000 = 1,50,000, Debt-Equity Ratio = 80,000 / 1,50,000=.53, Liquidity Ratio = Liquid Assets / Liquid Liabilities, Liquid Assets = Sundry Debtors + Advances + Cash Balance, Liquid Liabilities = Provision for Taxation + sundry creditors, = Fixed Assets / Current Assets= 1,40,000/ 100000, Fixed Assets Turnover =Turnover / Fixed Assets= 5,60,000/1,40,000.