Analysis of Financial Statements – India Petro Ltd.
ANALYSIS OF FINANCIAL STATEMENTSQ.1 India Petro Ltd. presents the balance sheet with the request to convert it into common size into vertical form suitable for analytical purpose after incorporating the adjustments given there under.Balance Sheet as on 31st March, 2000LiabilitiesRs.AssetsRs.Share Capital13,00,000Fixed assets56,50,000Reserves22,25,000Investments2,25,000Debentures37,00,000Inventories12,00,000Creditors11,45,000Debtors12,05,000Loan from debtors2,00,000Cash and bank2,75,000Provision for tax1,70,000Loan and advances6,27,000Reserve for depreciation5,00,000Misc. Expenditure58,00092,40,00092,40,000Other information:
Loan and advance a sum of Rs.2 lacs advanced to a contractor assigned with erection of new plant of the company, currently in progress.1/3 of the investments are trade investments.½ of the loans from debtors are security deposits, not refundable in foreseeable future, but the remaining loan are adjustable against the running current account.Debtors not covered by any security are likely to realize only to the extent of 90% of their book balance.Q.2 From the following Balance Sheet presented by M/s Deepak Ltd. prepare comparative statements, suitable for analytical purpose and offer comments.Liabilities19992000Assets19992000Share capital1,35,0001,35,000Goodwill11,9504,450Reserves20,50034,000Preliminary Exp.2,000500Div. Eq. Res.10,00010,000Land and Bldg.32,40045,000Profit & Loss10,00010,000Machinery1,13,40085,00015% Debentures45,00045,000Furniture-40,500Public deposits67,95062,010Investments40,50049,500Creditors51,64029,920Debtors94,5001,14,120Bills payable15,000-Bank balance89,64011,610O/s Expenses5,0005,000Proposed dividend13,50016,200Provision for tax10,80012,6003,84,3903,50,7303,84,3903,50,730