Analysis of Financial Statements Accountancy - Analysis of Financial Statements

Which of the following is not an objective of Analysis of Financial Statements:

1. To judge the financial health of the firm.
2. To judge the short-term and long-term liquidity position of the firm.
3. To judge the reasons for change in the profitability of the firm.
4. To judge the variations in the accounting practices of the business followed by different enterprises.

In a common-size Balance Sheet, total equity and liabilities are assumed to be equal to:

1. 1,000
2. 100
3. 10
4. 1

Tangible assets of company increased from T 4,00,000 to T 5,00,000. What is the percentage of change?

1. 20%
2. 25%
3. 33%
4. 50%

If total assets of a firm are 7 10,00,000 and its non-current assets are 7 6,00,000, what will be the percentage of current assets on total assets?

1. 60%
2. 50%
3. 40%
4. 30%

A purchased a car for Rs. 10,00,000, making a down payment of Rs. 1,00,000 and signing a Rs. 9,00,000 bill payable due in 60 days. As a result of this transaction.

1. Total asset increased by Rs. 10,00,000
2. Total liabilities increased by Rs. 9,00,000
3. Total asset increased by Rs. 9,00,000
4. Total asset increased by Rs. 9,00,000 with corresponding increase in liabilities by Rs. 9,00,000

From the following information provided prepare a comparative income statement for the period 2008 & 2009.

	2008	2009
Sales (Rs.)	6,00,000	8,00,000
Gross Profit	40% on sales	50% on sales
Administrative expenses	20% of Gross profit	15% of Gross profit
Income tax	50%	50%

Why is Analysis of Financial Statements important to creditors?

From the following information provided prepare a comparative income statement for the period 2008 & 2009.

	2008	2009
Sales (₹)	6,00,000	9,00,000
Gross Profit	40% on sales	50% on sales
Administrative expenses	20% of Gross profit	15% of Gross profit
Income tax	50%	50%

What are the importance of Financial Statement Analysis?

How is analysis of financial statements important to Government Authorities?

Anirudh Ltd. has 4,000, 8% debentures of Rs. 100 each due for redemption on March 31, 2005. The company has a debenture redemption reserve of Rs. 1,50,000 on that date. Assuming that no interest is due record the necessary journal entries at the time of redemption of debentures.

1. Give the meaning of ‘Long-Term Provisions’.
2. List any four items other than ‘stock-in-trade’ that are presented under the sub-head ‘inventories’ as per schedule III of the Companies Act, 2018.

State the objectives of ‘Analysis of Financial Statements’.

You are given the following information:

Give a specimen of Comparative Balance Sheet of a Company for two years for comparison purpose.

Prepare a comparative Statement of Profit of Varun Ltd. with the help of the following information:

Form the following information provided, prepare Comparative Statement of Profit and loss for the years ended 31st March 2018 and 2017:

Prepare a Comparative Statement of Profit & Loss from the following:

Interest on investments @ ₹ 2,00,000 and taxes payable @ 50%.

Assertion [A] :
A company has postponed paying suppliers, so that the period-end cash balance appears higher in the books of the company. This is an example of window dressing.
Reason [R] :
Through Window Dressing a company can present a better financial position of the firm than the actual position.
Choose the Correct Option from the following:

Assertion [A] :
Vertical or static Analysis is made to review and analyse the financial statements of one year only, to compare the performance of other firms of the same type or divisions or departments of one firm.
Reason [R]: 
It is a Time Series Analysis
Choose the Correct Option from the following:

Assertion [A] :
When financial statements of several years are compared against a chosen base year, it is called Dynamic Analysis.
Reason [R] :
Horizontal analysis is made to review and analyse the financial Statements for a number of years and it is also known as Time Series Analysis.
Choose the Correct Option from the following: