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PTP.12 Analysis of Financial Statements—CBSE XII

Answers to Practice Test Paper 4

1. It will be shown under Investing Activity as Extraordinary item.
2. It will be shown under Operating Activity, it being its business.
3.
Item Main Head Sub-head
(i) Employees Stock Option Shareholders’ Funds Reserves and Surplus
Account
(ii) Deferred Tax Liabilities Non-current Liabilities As a Line Item
(iii) Bank Overdraft or Cash Credit Current Liabilities Short-term Borrowings
(iv) Investment in Shares Non-current Assets Non-current Investments

4. (a) Debt to Equity Ratio = 1 : 1.
(b) Inventory Turnover Ratio = 10 Times.
Interpretation: Ajmera Ltd. is definitely very efficient because its Inventory Turnover
Ratio is just double to that of industry.
` 50,00,000
5. Working Capital Turnover Ratio (2024) = = 3.33 Times.
` 15,00,000
` 30,00,000
Working Capital Turnover Ratio (2023) = = 2.4 Times.
` 12,50,000
6. Cash Used in Operating Activities = ` 3,70,000;
Cash Used in Investing Activities = ` 3,00,000;
Cash Flow from Financing Activities = ` 7,70,000;

Net Increase in Cash and Cash Equivalents = ` 1,00,000.