Financial reports and analysis (FAC501) (MBA 2017-19)

School of Management and Entrepreneurship

Shiv Nadar University
Date and time: August 30, 2017 and 2.45 to 3.15 p.m. Venue: A-317
Total Marks: 25 Duration: 30 minutes

1. Given below is the income statement of Tata Steel Ltd., which we are familiar with. You
are required to fill in the blank spaces: (5 marks)

Tata Steel Ltd. - Income statement for the year ending March 31 2012
Expenses INCOME
Raw Materials 8,223.89 Sales Turnover 37,005.71
Power & Fuel Cost 1,990.16 Excise Duty 3,072.25
Employee Cost 3,047.26 Net Sales 33,933.46
Other Manufacturing
4,460.35 Other Income 1,397.44
Expenses
Selling and Administration
3,240.10 Stock Adjustments 220.72
Expenses
Miscellaneous Expenses 2,133.88 Total Income 35,551.62
Depreciation 1,151.44
Less: Pre-operative
478.23
Expenses Capitalised
Total Expenditure 23,768.85
Operating Profit (EBIT) 11,782.77
Interest 1,925.42
Profit Before Tax 9,857.35
Tax 3,115.11
Deferred Tax 45.82
Reported Net Profit
6,696.42
(Profit After Tax)

2. Find out the value of opening cash and cash equivalents. Write a short summary of cash
position of the firm from the table information. (5 marks)

Cash Flow Statement of BEML (Mar ’14) Rs. in crores

Net profit before tax 9.08
Net Cash From Operating Activities 394.02
Net Cash (used in)/from investing activities -27.9
Net Cash (used in)/from Financing Activities -426.72
Net (decrease)/increase In Cash and Cash Equivalents -60.6

Opening Cash & Cash Equivalents

76.83
Closing Cash & Cash Equivalents 16.23
3. Double entry system identifies two aspects in each monetary transaction and assigns debit
and credit to each aspect based on the three “golden rules”. Your task is to write the debit
and credit aspect of each of the following transactions in the space provided.
(10 marks)

Sl.No. Transaction Debit Credit

Invested money into the
1 business as share capital by Cash a/c Capital a/c
the promoter
Purchased inventories and
2 Purchase a/c Cash a/c
supplies for cash
Additioanl purchase of
3 inventories and supplies on Purchase a/c Accounts payables a/c
credit
Promoter withdrew cash for
4 Drawings a/c Cash a/c
personal purposes
Paid for supplies bought on
5 Accounts payables a/c Cash a/c
credit
Paid rent for the current
6 Rent a/c Cash a/c
month

7 Paid rent for the next month Rent in advance a/c Cash a/c

Received cash for services to Sundry debtors a/c (or)

8 Cash a/c
be provided next month Customers a/c
Collected payment for
9 Cash a/c Sundry debtors a/c
services provided last month
Borrowed money from bank
10 Cash a/c Bank loan a/c
on a 5 year term

Explain with examples:

4. Non-cash transactions (3 marks)
These are transactions which doesn’t involve any flow of cash. The common example is
depreciation, which though is written as an expense, doesn’t involve any cash outflow.
Other examples include, payment of stock dividend, conversion of convertible-debt into
equity, purchase of asset using ‘notes’.
5. Shareholders’ fund and the networth (2 marks)
Net worth is also known as the book value of equity. It’s the owners’ money that includes
share capital and reserves and surpluses. The shareholders’ fund also includes the
preference share capital.

Question for bonus mark (Chance of getting more than 25) (5 marks)
1. Write a short note on the revised Schedule VI of the Companies Act 2013 and joint stock
companies.

Joint stock companies are the business entities, whose share capital is widely held. Public
limited company, Private limited companies, Companies limited by guarantees etc. are
various forms of the Joint Stock Company. Companies Act 2013 additionally provides for
‘One-Person Company” also.

The revised schedule VI provides template for companies to submit their annual financial
statements. It broadly follows permanency order, i.e. starting the statement with long term
items first. Companies Act 2013 mandates all companies in India to submit their annual
financial statements in that format.

********* Best wishes *********