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Financial Management Topics

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Financial Statement Analysis
1. Given below are the financial statements of Safal Enterprises. Using the tool of ratio analysis comment on profitability and liquidity position of the firm for the year 2014-15. The total number of shares outstanding for the firm is 2.69 crores. In view of growth opportunity in near future the firm has been maintaining a policy of 45% payout
Summarized P & L Account of Safal Enterprises
For the year ended 31 march
2014
2015
₹ in crores
Sales
132
144
Other Income
12
15
Cost of Sales
102.96
110.02
29.04
33.98
Gross Margin
Operating Expenses
Administrative
12.44
14.36
Selling & Distribution
4.42
5.36
24.18
29.26
EBIT (Earning Before Interest and Tax)
Interest
3.00
4.01
21.18
25.26
EBT (Earning Before Tax)
Provision for Tax
7.94
9.47
13.24
15.79
PAT (Profit after Tax)
Note: Gross Margin = Sales – Cost of sales = 132-102.96 = 29.04
PBIT = Gross Margin + Other Income – Admin Expenses – Selling and Distribution Expenses

Balance Sheet of Safal Enterprises
As on 31st March
2014

2015
₹ in crores

Assets
Fixed Assets (Net)
Current Assets
Inventory
Accounts receivable
Cash
Total Assets
Liabilities & Owner’s Equity
Share Capital
Reserves & Surplus
Debt (Long Term)
Current Liabilities:
Total

31.25

37.50

14.56
13.20
1.50

16.64
15.43
1.75

60.51

71.32

27.00
4.96
20.00
8.55
60.51

27.00
6.36
26.71
11.25
71.32

2. Calculate all the Ratios
Income Statement of ----------for the year ended 31st March
Year before previous year
(Rs. In lakhs)
7,053.20

Previous year

Current year

recurring)
Cost of goods sold
Depreciation
Administrative Expenses
Profit Before Taxes (PBIT)
Interest
Profit Before Tax (PBT)
Tax rate
Provision for Tax
Profit After Tax (PAT)

(Rs. In lakhs)
9,013.50

107.30

117.27

148.50

3,271.52
118.82
2,008.56
1,761.60
40.64
1,720.96
36.00%
619.55
1,101.42

Sales
Other incomes (non-operating and non-

(Rs. In lakhs)
8,015.00…...

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