1. Comprehensive analysis: The balance sheets and the profit and loss accounts of Maharaja SyntheticsLimited for the last two years are given as follows:Particulars(Rs.in Thousands)20172018Net salesOther IncomeTotal Income788, 1 1015,370803,480672,04018,020690,060473,290118,190Cost of goods soldOther operating expensesDepreciationInterestProfit before tax520,460131,97022,26020,14032,86024,38095,93054,060Тахекs28,78067,15016,78816,218Profit after tax37,842Dividend9,460Retained earnings50,36228,382Balance Sheet as on 31st MarchParticularsAssetsNon-current assetsCash and bankTrade receivablesInventoriesTotal Current assets20182017223,20024,202175,96021,20091,16068,900130,210111,300201.400377,360245.572Total468,772LiabilitiesShareholders fund (Note 1)232,682182,320106,000Long term debtShort term debtTrade payablesTotal current liabilities137,80058,30039,99098,29058,30030.74089.040377,360Total468,772Additional Information:1. The details of shareholders' funds are as follows:2017: Equity Share Capital Rs.1,00,000 (Shares of Rs. 100 each) OtherEquity: Rs. 82,3202018: Equity Share Capital Rs.1,00,000 (Shares of Rs.100 each) OtherEquity: Rs. 1,32,6822. Ail Non-Current Asset are Fixed Assets.3.Current Market Price of the company is Rs.3004.Assume Tax rate to be 30%Based on the information above compute and interpret:1.Profitability Ratioa) Gross Profit Ratiob) Net Profit Ratioc) Operating Profit Ratiod) Earnings Per Share2.Liquidity Ratioa) Current Ratiob) Liquid Ratio3.Solvency Ratioa) Debt Equity Ratiob) Interest Coverage Ratio4.Asset Utilization Ratioa) Fixed Asset Turnover Ratiob) Inventory Turnover Ratio and Average Holding Periodc) Trade receivable Turnover Ratio and Average Collection Period5. Market Ratioa) Price earnings ratiob) Dividend pay-outc) Dividend yield ratio

1. Profitability ratios a) Gross Profit Margin = (Gross profit / Net sales ) *100 Gross profit =…

Answered: Based on the information above compute…

Based on the information above compute and interpret: 1.Profitability Ratio a) Gross Profit Ratio b) Net Profit Ratio c) Operating Profit Ratio d) Earnings Per Share

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. Comprehensive analysis: The balance sheets and the profit and loss accounts of Maharaja Synthetics
Limited for the last two years are given as follows:
Particulars
(Rs.in Thousands)
2017
2018
Net sales
Other Income
Total Income
788, 1 10
15,370
803,480
672,040
18,020
690,060
473,290
118,190
Cost of goods sold
Other operating expenses
Depreciation
Interest
Profit before tax
520,460
131,970
22,260
20,140
32,860
24,380
95,930
54,060
Тахек
s
28,780
67,150
16,788
16,218
Profit after tax
37,842
Dividend
9,460
Retained earnings
50,362
28,382
Balance Sheet as on 31st March
Particulars
Assets
Non-current assets
Cash and bank
Trade receivables
Inventories
Total Current assets
2018
2017
223,200
24,202
175,960
21,200
91,160
68,900
130,210
111,300
201.400
377,360
245.572
Total
468,772
Liabilities
Shareholders fund (Note 1)
232,682
182,320
106,000
Long term debt
Short term debt
Trade payables
Total current liabilities
137,800
58,300
39,990
98,290
58,300
30.740
89.040
377,360
Total
468,772
Additional Information:
1. The details of shareholders' funds are as follows:
2017: Equity Share Capital Rs.1,00,000 (Shares of Rs. 100 each) Other
Equity: Rs. 82,320
2018: Equity Share Capital Rs.1,00,000 (Shares of Rs.100 each) Other
Equity: Rs. 1,32,682
2. Ail Non-Current Asset are Fixed Assets.
3.Current Market Price of the company is Rs.300
4.Assume Tax rate to be 30%
Based on the information above compute and interpret:
1.Profitability Ratio
a) Gross Profit Ratio
b) Net Profit Ratio
c) Operating Profit Ratio
d) Earnings Per Share
2.Liquidity Ratio
a) Current Ratio
b) Liquid Ratio
3.Solvency Ratio
a) Debt Equity Ratio
b) Interest Coverage Ratio
4.Asset Utilization Ratio
a) Fixed Asset Turnover Ratio
b) Inventory Turnover Ratio and Average Holding Period
c) Trade receivable Turnover Ratio and Average Collection Period
5. Market Ratio
a) Price earnings ratio
b) Dividend pay-out
c) Dividend yield ratio

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