In this Ratios Analysis MBA Project calculating the past financial statements of the same firm does ratio analysis. Prohibited Content 3. online gk on Commarce Quiz MBA and BBA Quiz, Accounting Terms. The collection system is faulty because debtors enjoy a credit facility for 96 days, which is beyond normal period. This chapter focuses on the interpretation and analysis of fi nancial statements. 2 times c. 6 times d. 8 times. Debt – Equity Ratio = Debt – Equity Ratio / Long – Term Debt, Shareholder’s Fund = Equity + Preference + Retained Earnings, Fixed Assets Ratio= Fixed Assets / Proprietor’s Fund= -1,80,000, Proprietor’s Fund=Equity Share Capital + Preference Share Capital+ Retained Earnings, Fixed Assets Ratio = 1,80,000 / 1,70,000= 1.05, Current Ratio = Current Assets / Current Liabilities, Current Assets = Stores + Debtors + BR + Bank= 25,000 + 55,000 + 3,000 + 2,000 = 85,000, Liquid Liabilities = Debtors + Bill Receivable + Cash=55,000 + 3,000 + 2,000 = 60,000. Also, if you want to know more about one … Here is a compilation of top thirteen accounting problems on ratio analysis with its relevant solutions. Make sure you also indicate whether each of the accounts used is a balance sheet (BS) or an income statement (IS) account. The following is the Trading and Profit and loss account of Mathan Bros Private Limited for the year ended June 30,2001. Current ratio which let us know the short term solvency of a firm. So there is no need to calculate the average stock. (v) Financiers of Long-term Funds : They are concerned with the firm’s long-term solvency and survival; since they provide long-term funds to firm. Uploader Agreement, Read Accounting Notes, Procedures, Problems and Solutions, Learn Accounting: Notes, Procedures, Problems and Solutions, List of Ratio Analysis Formulas and Explanations | Accounting, Underwriting of Profit: Problems and Solutions | Business | Accounting, Quick Notes on Du Pont Chart | Accounting, Preparation of Accounts of Insurance Companies | Accounting. Gross Profit Ratio is 20% which is a healthy sign. Stock Turnover Ratio and Turnover to fixed assets indicate an unhealthy sign. This test comprises 40 questions on Management Accounting. The firm can increase the rate of return on investment by increasing production. Task: Students will be required to use the financial ratio analysis question available on moodle and in the subject outline. A turnover ratio of 8 signifies that debtors get converted into cash 8 times in a year. So get preparation for the MBA Finance job interview . Ideal for students preparing for semester exams, MBA, CA, BBA, BMS, PSUs, NET/SET/JRF, UPSC and other entrance exams. For instance, the ratio of number of boys in a class to the number of girls is 2:3. Bills Receivable from the buyer of fixed assets, should be excluded. Financial analysis is the selection, evaluation, and interpretation of financial data, ... And we show how to interpret financial ratio analysis, warning you of the pitfalls that occur when it's not used properly. View Homework Help - Extra Ratio Analysis Questions MBA from FINANCE ea212 at Arab Academy for Science, Technology & Maritime Transport. A low inventory turnover ratio is dangerous. It means the firm is not dependent on outside liabilities. A/c 30,000 Stock 30000, Secured loan 80,000 Sundry Debtors 30000, Sundry creditors 50,000 Advances 10000, Provision for taxation 20,000 Cash Balance 10000, 3,00,000 300000, Debt – Equity = Long – Term Debt / Shareholders Fund, Shareholder’s Fund= Equity Share Capital + Reserves + P.L.A/c, = 1,00,000 + 20,000 + 30,000 = 1,50,000, Debt-Equity Ratio = 80,000 / 1,50,000=.53, Liquidity Ratio = Liquid Assets / Liquid Liabilities, Liquid Assets = Sundry Debtors + Advances + Cash Balance, Liquid Liabilities = Provision for Taxation + sundry creditors, = Fixed Assets / Current Assets= 1,40,000/ 100000, Fixed Assets Turnover =Turnover / Fixed Assets= 5,60,000/1,40,000. 4 Calculate the capital gearing from the following information: Rs. (ii) Estimates can be obtained using A. M. (iii) A. M. is used for different purposes by different persons like it is used for calculating average marks of the students. Explain ‘financial modelling’. Bad and doubtful debts and their provisions are not deducted from the total debtors in order to avoid the impression that a larger amount of receivables have been collected. It is an indication of excessive inventory and over investment in inventory. "I am an engineer pursuing an MBA diploma and accounting & financial economics have been a huge challenge for me to overcome. That is, high Turnover Ratio and short collection period imply prompt payment on the part of debtors. Financial Performance Analysis (MBA project) January 2019; DOI: 10.13140/RG.2.2.33643.39203. The shorter the average collection period, the better the quality of debtors. A low ratio may be result of inferior quality goods, stock of un-saleable and absolute goods. Question. PROBLEMS AND SOLUTIONS Type 1: Final Account to Ratio Problem 1. MBA Finance frequently Asked Questions by expert members with experience in MBA finance . Also known as Solvency Ratios, and as the name indicates, it focuses on a company’s current assets and liabilities to assess if it can pay the short-term debts. They analyze the firm’s profitability over time, its ability to generate cash to be able to pay interest and repay the principal amount. Fixed assets are not used properly. 1. From the data calculate : (i) Gross Profit Ratio (ii) Net Profit Ratio (iii) Return on Total Assets (iv) Inventory Turnover (v) Working Capital Turnover (vi) Net worth to Debt Sales 25,20,000 Other Current Assets 7,60,000. MBA Sales™ Degree Sample Test Questions Question 1 Selling involves: Choice-1: pushing the product in the market without any consideration for your customer's needs and wants Choice-2: trying to make your customer want what the company has to offer Choice-3: focus is on your product Choice-4: focus is on your customer Choice-5: Options 1, 2 and 3 Other hand, low Turnover ratio and long collection period ratio measures the quality of.! 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