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Chapter 4: Analysis of Financial Statements
NCERT solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements Chapter 4 Analysis of Financial Statements Short Answer Questions [Page 184]
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?
NCERT solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements Chapter 4 Analysis of Financial Statements Long Answer Questions [Page 184]
Describe the different techniques of financial analysis and 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.
NCERT solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements Chapter 4 Analysis of Financial Statements Numerical Questions [Pages 184 - 187]
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 | 2017 Rs. |
2016 Rs. |
| I. Equity and Liabilities |
|
|
|
Equity share capital |
4,00,000 | 3,00,000 |
|
Reserves and surplus |
1,50,000 | 1,00,000 |
|
Loan from IDBI |
3,00,000 | 1,00,000 |
|
Short-term borrowings |
70,000 | 50,000 |
|
Trade payables |
60,000 | 30,000 |
|
Short-term provisions |
10,000 | 20,000 |
|
Other current liabilities |
1,10,000 | 1,00,000 |
| Total | 11,00,000 | 7,00,000 |
| II. Assets |
|
|
|
Fixed assets |
4,00,000 | 2,20,000 |
|
Non-current investments |
2,25,000 | 1,00,000 |
|
Current investments |
80,000 | 60,000 |
|
Stock |
1,05,000 | 90,000 |
|
Trade receivables |
90,000 | 60,000 |
|
Short term loans and advances |
1,00,000 | 85,000 |
|
Cash and cash equivalents |
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% |
*There is a misprint in the book, this should be 2,00,000
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.
Chapter 4: Analysis of Financial Statements
NCERT solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements chapter 4 - Analysis of Financial Statements
NCERT solutions for Class 12 Accountancy - Company Accounts and Analysis of Financial Statements chapter 4 (Analysis of Financial Statements) include all questions with solution and detail explanation. This will clear students doubts about any question and improve application skills while preparing for board exams. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Shaalaa.com has the CBSE Class 12 Accountancy - Company Accounts and Analysis of Financial Statements solutions in a manner that help students grasp basic concepts better and faster.
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Concepts covered in Class 12 Accountancy - Company Accounts and Analysis of Financial Statements 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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