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Chapters
2: Issue and Redemption of Debentures
3: Financial Statements of a Company
▶ 4: Analysis of Financial Statements
5: Accounting Ratios
6: Cash Flow Statement
![NCERT solutions for Accountancy - Company Accounts and Analysis of Financial Statements [English] Class 12 chapter 4 - Analysis of Financial Statements - Shaalaa.com](/images/accountancy-company-accounts-and-analysis-of-financial-statements-english-class-12_6:7096d8653cde4d43af95f8fd625ffe77.jpg "NCERT solutions for Accountancy - Company Accounts and Analysis of Financial Statements [English] Class 12 chapter 4 - Analysis of Financial Statements")
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Solutions for Chapter 4: Analysis of Financial Statements
Below listed, you can find solutions for Chapter 4 of CBSE NCERT for Accountancy - Company Accounts and Analysis of Financial Statements [English] Class 12.
NCERT solutions for Accountancy - Company Accounts and Analysis of Financial Statements [English] Class 12 4 Analysis of Financial Statements Questions for Practice [Pages 188 - 187]
Short Answer Questions
List the techniques of Financial Statement Analysis.
Distinguish between Vertical and Horizontal Analysis of financial data.
State the meaning of Analysis and Interpretation.
State the importance of Financial Analysis?
What are Comparative Financial Statements?
What do you mean by Common Size Statements?
Long Answer Questions
Describe the different techniques of financial analysis.
Explain the limitations of financial analysis.
Explain the usefulness of trend percentages in interpretation of financial performance of a company.
What is the importance of comparative statements? Illustrate your answer with particular reference to comparative income statement.
What do you understand by analysis and interpretation of financial statements? Discuss its importance.
Explain how common size statements are prepared giving an example.
Numerical Questions
Following are the balance sheets of Alpha Ltd. as at March 31st, 2016 and 2017:
Following are the balance sheets of Alpha Ltd. as at March 31st, 2016 and 2017:
| Particulars | 2016 Rs. |
2017 Rs. |
| I. Equity and Liabilities |
|
|
|
Equity share capital |
2,00,000 | 4,00,000 |
|
Reserves and surplus |
1,00,000 | 1,50,000 |
|
Long-term borrowings |
2,00,000 | 3,00,000 |
|
Short-term borrowings |
50,000 | 70,000 |
|
Trade payables |
30,000 | 60,000 |
|
Short-term provisions |
20,000 | 10,000 |
|
Other current liabilities |
20,000 | 30,000 |
| Total | 6,20,000 | 10,20,000 |
| II. Assets | ||
|
Fixed assets |
2,00,000 | 5,00,000 |
|
Non-current investments |
1,00,000 | 1,25,000 |
|
Current investments |
60,000 | 80,000 |
|
Inventories |
1,35,000 | 1,55,000 |
|
Trade receivables |
60,000 | 90,000 |
|
Short term loans and advances |
40,000 | 60,000 |
|
Cash at bank |
25,000 | 10,000 |
| Total | 6,20,000 | 10,20,000 |
You are required to prepare a Comparative Balance Sheet.
Following are the balance sheets of Beta Ltd. at March 31st, 2016 and 2017:
| Particulars | 2016 Rs. |
2017 Rs. |
| I. Equity and Liabilities |
|
|
|
1. Shareholders' Funds |
||
|
(a) Share capital |
4,00,000 | 3,00,000 |
|
(b) Reserves and surplus |
1,50,000 | 1,00,000 |
|
2. Non-Current Liabilities |
||
|
(a) Loan from IDBI |
3,00,000 | 1,00,000 |
|
3. Current Liabilities |
||
|
(a) Short-term borrowings |
70,000 | 50,000 |
|
(b) Trade payables |
60,000 | 30,000 |
|
(c) Other current liabilities |
1,10,000 | 1,00,000 |
|
(d) Short-term provisions |
10,000 | 20,000 |
| Total | 11,00,000 | 7,00,000 |
| II. Assets |
|
|
|
1. Non-Current Liabilities |
||
|
(a) Fixed assets |
4,00,000 | 2,20,000 |
|
(b) Non-current investments |
2,25,000 | 1,00,000 |
|
2. Current Assets |
||
|
(a) Current investments |
80,000 | 60,000 |
|
(b) Stock |
1,05,000 | 90,000 |
|
(c) Trade receivables |
90,000 | 60,000 |
|
(d) Cash and cash equivalents |
1,00,000 | 85,000 |
|
(e) Short term loans and advances |
1,00,000 | 85,000 |
| Total | 11,00,000 | 7,00,000 |
You are required to prepare a Comparative Balance Sheet.
Prepare Comparative Income Statement from the following information:
| Particulars | 2016-17 Rs. |
2015-16 Rs. |
| Freight Outward | 20,000 | 10,000 |
| Wages (office) | 10,000 | 5,000 |
| Manufacturing Expenses | 50,000 | 20,000 |
| Stock adjustment | (60,000) | 30,000 |
| Cash purchases | 80,000 | 60,000 |
| Credit purchases | 60,000 | 20,000 |
| Returns inward | 8,000 | 4,000 |
| Gross profit | (30,000) | 90,000 |
| Carriage outward | 20,000 | 10,000 |
| Machinery | 3,00,000 | 2,00,000 |
| Charge 10% depreciation on machinery | 10,000 | 5,000 |
| Interest on short-term loans | 20,000 | 20,000 |
| 10% debentures | 20,000 | 10,000 |
| Profit on sale of furniture | 20,000 | 10,000 |
| Loss on sale of office car | 90,000 | 60,000 |
| Tax rate | 40% | 50% |
Prepare Comparative Income Statement from the following information:
| Particulars | 2015-16 Rs. |
2016-17 Rs. |
| Manufacturing expenses | 35,000 | 80,000 |
| Opening stock | 30,000 | 60% of closing stock |
| Sales | 9,60,000 | 4,50,000 |
| Returns outward | 4,000 (out of credit purchase) | 6,000 (out of cash purchase) |
| Closing stock | 150% of opening stock | 1,00,000 |
| Credit purchases | 1,50,000 | 150% of cash purchase |
| Cash purchases | 80% of credit purchases | 40,000 |
| Carriage outward | 10,000 | 30,000 |
| Building | 1,00,000 | 2,00,000 |
| Depreciation on building | 20% | 10% |
| Interest on bank overdraft | 5,000 | - |
| 10% debentures | 2,00,000 | 20,00,000 |
| Profit on sale of copyright | 10,000 | 20,000 |
| Loss on sale of personal car | 10,000 | 20,000 |
| Other operating expenses | 20,000 | 10,000 |
| Tax rate | 50% | 40% |
Prepare a Common size statement of profit and loss of Shefali Ltd. with the help of following information:
| Particulars | 2015-16 (Rs) |
2016-17 (Rs) |
| Revenue from operations | 6,00,000 | 8,00,000 |
| Indirect expense | 25% of gross profit | 25% of gross profit |
| Cost of revenue from operations | 4,28,000 | 7,28,000 |
| Other incomes | 10,000 | 12,000 |
| Income tax | 30% | 30% |
Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd. and Anjali Ltd.:
| Particulars | Aditya Ltd. Rs. |
Anjali Ltd. Rs. |
| I. Equity and Liabilities | ||
|
a) Equity share capital |
6,00,000 | 8,00,000 |
|
b) Reserves and surplus |
3,00,000 | 2,50,000 |
|
c) Current liabilities |
1,00,000 | 1,50,000 |
| Total | 10,00,000 | 12,00,000 |
| II. Assets | ||
|
a) Fixed assets |
4,00,000 | 7,00,000 |
|
b) Current assets |
6,00,000 | 5,00,000 |
| Total | 1,00,0000* | 12,00,000 |
*The total of Liabilities side must be equal to the total of Assets side, therefore, it should be 10,00,000.
Solutions for 4: Analysis of Financial Statements
NCERT solutions for Accountancy - Company Accounts and Analysis of Financial Statements [English] Class 12 chapter 4 - Analysis of Financial Statements
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Concepts covered in Accountancy - Company Accounts and Analysis of Financial Statements [English] Class 12 chapter 4 Analysis of Financial Statements are Meaning of Analysis of Financial Statements, Significance of Analysis of Financial Statements, Objectives of Analysis of Financial Statements, Tools of Analysis of Financial Statements, Comparative Statements, Common Size Statements, Limitations of Financial Analysis.
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