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Ratio analysis ratios at a glance1 (1)

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  • 1. M-Com Part – II, MMS, BMS, B.Com, BMMFinancial Management Notes compiled by Prof. M.B. Thakoor _____ Ltd.VERTICLE REVENUE STATEMENT FOR THE YEAR ENDED …………. Particulars Amount Amount Amount Gross Sales 22 xLess : Return Inward 2xAdd. : Sales Tax / Excise x 3x NET SALES 19 xLess : Cost of Sale / Cost of Goods Sold Material consumed X Opening StockAdd. : Purchases 2xLess : Return Outward x XAdd : Carried Inward X Import duty X 4XLess : Closing Stock X Material Consumed 3X 3XAdd : Manufacturing Expenses Direct Wages X Direct Expenses X Power & fuel X Depreciation on Factory Asset X Other Factory expenses X 5XAdd. : Opening Stock of W.I.P. X 6XLess : Closing Stock of W.I.P. X 5XLess : Sale of factory Scrap X Manufacturing Expenses 4X COST OF PRODUCTION 7XAdd.: Opening Stock of Finished goods X 8XAdd.: Purchase of Finished goods 2XLess : Purchase Return X X 9XLess : Closing Stock of Finished Goods XCost of Sale / Cost of Goods Sold 8X 8X Gross Margin / Gross Profit 11 X 1
  • 2. M-Com Part – II, MMS, BMS, B.Com, BMMFinancial Management Notes compiled by Prof. M.B. ThakoorAdd. : OPERATING INCOME 1) Discount Received X 2) Commission Received X 2X 13 XLess : OPERATING EXPENSES 1) Administrative Expenses X 2) Financial Expenses X (Other than interest) 3) Selling and Distribution Exp. X 3X OPERATING NET PROFIT / 10 X NET OPERATING PROFITAdd.: Non Operating Income 1) Profit on Sale of Fixed Asses X 2) Income from Investment X 2X 12 XLess : Non-Operating Expenses 1) Loss on Sale of Fixed Asset X 2) Loss of Fire / Theft / Accident X 3) Goodwill written off X 4) Preliminary Expenses Written X Off 5) Advertisement Expenses X 5X Written OffEarning Before Interest & Tax (EBIT) 7XLess: Interest on loan / Debenture X Earning Before Tax (EBT) 6XLess : Provision for Taxation X Earning After Tax (EAT) 5X STATEMENT OF RETAINED EARNING Particulars Amount Amount Amount Opening Balance XAdd.:Earning After Tax (EAT) 5X 6XLess : Appropriations i) Transfer to General Reserve X ii) Transfer to Sinking Fund X iii) Transfer to any other fund X iv) Preference Dividend X v) Equity Dividend X 5XBALANCE C/FD. TO NEXT YEAR ORRETAINED SURPLUS OR RETAINED EARNING 1X 2
  • 3. M-Com Part – II, MMS, BMS, B.Com, BMMFinancial Management Notes compiled by Prof. M.B. Thakoor NAME OF THE COMPANY VERTICAL BALANCE SHEET AS ON ………… Particulars Amount Amount Amount TOTAL FUNDS EMPLOYED BY OR SOURCES OF FUNDSA) Shareholders Funds or Owners Funds or Proprietors Funds Paid up capital Preference Share Capital xxx Equity Share Capital xxx xxxAdd : Reserve And Surplusesi) Profit and Loss a/c. (cr.Bal.) xxxii) General Reserve xxxiii) Reserve Fund xxxiv) Dividend Equalisation Fund xxxv) Share Premium xxxvi) Capital Reserve xxxvii) Capital Redemption Reserve xxxviii) Other Reserve xxxix) Sinking Fund xxx xxxLess : Lossesi) Profit & Loss a/c. (Debit Bal.) xxxii) Misc. Expd. (not written or not adjusted)iii) Preliminary Expenses xxxiv) Disc. on issue of share & deben. xxxv) Deferred Advertisement exp. xxxvi) Share issue expenses xxx xxx xxx(A) / shareholder’s funds / Ownersfunds / Proprietors funds ORShareholders equity /Owners equity / xxxProprietors Equity(B) Loan Funds or Long Term Loans &Commitmenti) Long Term Loans -a) Secured Loansi) Debenture xxxiv) Term Loan from Bank xxxv) Loans from Financial Institutions xxxiii) Public Deposit xxxb) Unsecured Loani) Short Term Loans xxx XxxTotal funds employed by or sources of Xxxfunds 3
  • 4. M-Com Part – II, MMS, BMS, B.Com, BMMFinancial Management Notes compiled by Prof. M.B. ThakoorNote: Do not consider any provision against an asset or liability in reserve. For ex.Prov. For Deprn. / Dep. Reserve / Sinking Fund / Worksmen compensation fund. Particulars Amount Amount Amount TOTAL FUNDS EMPLOYED AS OR APPLICATION OF FUNDS OR REPRESENTED BYA) Fixed Assets:-(i) Intangible:- a. Goodwill xxx b. Patents & Trade Mark xxx c. Lease tend right xxx d. Copy Rights xxx xxxLess Written Off xxx xxx(ii) Tangible:- a. Land & Bldg. xxx b. Plant & Machinery xxx c. Furniture & Fixture xxx d. Motor Car xxx e. Live Stock xxxGross Block (At cost) xxxLess: Provision for Dep. (upto date) xxxNet Block xxxAdd: Capital Work in Progress xxx A)Total Fixed Asset xxx B) Investments (Long Term) xxxTotal C/fd. Xxx 4
  • 5. M-Com Part – II, MMS, BMS, B.Com, BMMFinancial Management Notes compiled by Prof. M.B. ThakoorTotal B/fd. (A + B) xxx C) WORKING CAPITAL / NET CURRENT ASSETS(i) Current Assets:- (A) Quick Assets: Cash & Bank xxx Debtors xxx Bill receivable xxx Short term investment xxx Int. accrued on investment xxx xxx (B) Non quick assets Stock in trade xxx Prepaid expense xxx xxx i) Current Assets xxxLess: ii) Current Liabilities:- (A) Quick Liabilities Creditor xxx Bill payable xxx O/s. Expenses xxx Provision for Taxes xxx Proposed Dividend xxx Unclaimed Dividend xxx Accrued interest on loan taken xxx xxx Short Term Loan xxx (B) Non Quick Liabilities: Bank Overdraft xxx xxx ii) Current Liabilities xxx (i – ii ) = working capital = C xxx OR Net Current Assets 5

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