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Model Test Papers M.353

Working Note:
Particulars 31st March, 2017 (`) 31st March, 2018 (`)
Other Income ` 24,00,000 × 20/100 = ` 4,80,000 ` 36,00,000 ×12/100 = ` 4,32,000
Expenses ` 24,00,000 × 60/100 = ` 14,40,000 ` 36,00,000 × 70/100 = ` 25,20,000

Or
(a) Time Series Analysis involves comparison of ratios of one period with those of
earlier periods for the same enterprise.
(b) Cross Sectional Analysis is the comparison of ratios of one firm with other similar
firm(s) belonging to the same industry or industry average at the same point of time.
(c) Objectives of Financial Analysis:
1. Assessing the profitability or earning capacity of the firm as a whole as well as
its different departments so as to assess the financial health of the firm.
2. Assessing the operating efficiency with which resources are utilised in
generating revenue.
23. CASH FLOW STATEMENT for the year ended 31st March, 2018

Particulars ` `
A. Cash Flow from Operating Activities
Net Profit before Tax and Extraordinary Items (WN 1) 7,50,000
Add: Depreciation on Fixed Assets 1,70,000
Loss on Sale of Fixed Assets 20,000
Interest on Debentures (WN 2) 88,000
Operating Profit before Working Capital Changes 10,28,000
Less: Increase in Current Assets and Decrease in Current Liabilities
Inventories 1,50,000
Trade Receivables 50,000
Trade Payables 1,50,000 3,50,000
Cash Generated from Operating Activities 6,78,000
Less: Tax Paid 1,00,000
Cash Flow from Operating Activities 5,78,000
B. Cash Flow from Investing Activities
Proceeds from Sale of Machinery (WN 3) 10,000
Purchase of Machinery (WN 3) (6,00,000)
Proceeds from Sale of Non-current Investment 1,00,000
Cash Used in Investing Activities (4,90,000)
C. Cash Flow from Financing Activities
Interim Dividend Paid (1,00,000)
Final Dividend Paid (2016–17) (1,50,000)
Bank Overdraft Raised 50,000
Interest on Debentures (88,000)
Cash Proceeds from Long-term Borrowings 2,00,000
Cash Used in Financing Activities (88,000)
D. Net Increase/Decrease in Cash and Cash Equivalents (A + B + C) NIL
E. Add: Opening Cash and Cash Equivalents (Cash and Bank Balances) 3,00,000
F. Closing Cash and Cash Equivalents (Cash and Bank Balances) (D + E) 3,00,000