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3.20 Analysis of Financial Statements—CBSE XII
Working Note: ` `
Debt = Long-term Borrowings + Long-term Provisions
2024 = ` 8,00,000 + ` 2,00,000 10,00,000
2023 = ` 4,00,000 + ` 1,00,000 5,00,000
Equity or Shareholders’ Funds = Share Capital + Reserves and Surplus
2024 = ` 10,00,000 + ` 5,00,000 15,00,000
2023 = ` 7,50,000 + ` 2,50,000 10,00,000
Alternatively: Equity = Non-current Assets + Current Assets – (Non-current Liabilities – Current Liabilities)
2024 = ` 14,00,000 + ` 18,00,000 – ` 8,00,000 – ` 2,00,000 – ` 7,00,000 15,00,000
2023 = ` 9,50,000 + ` 9,00,000 – ` 4,00,000 – ` 1,00,000 – ` 3,50,000 10,00,000
Illustration 15.
Following is the Balance Sheet of Financial Services Ltd. as at 31st March, 2024. You are
required to calculate Current Ratio and Liquid Ratio for the two years.

BALANCE SHEET as at 31st March, 2024
Particulars Note 31st March, 31st March,
No. 2024 (`) 2023 (`)
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
(a) Share Capital 7,50,000 7,50,000
(b) Reserves and Surplus 3,00,000 2,00,000
2. Non-Current Liabilities
Long-term Borrowings 4,50,000 5,00,000
3. Current Liabilities
(a) Short-term Borrowings 2,00,000 1,00,000
(b) Trade Payables 4,50,000 3,50,000
(c) Other Current Liabilities 1 1,50,000 1,00,000
Total 23,00,000 20,00,000
II. ASSETS
1. Non-Current Assets
(a) Property, Plant and Equipment and Intangible Assets:
—Property, Plant and Equipment 7,50,000 7,00,000
(b) Non-current Investments 2,00,000 2,00,000
2. Current Assets
(a) Inventories 2 4,50,000 3,50,000
(b) Trade Receivables 5,00,000 4,50,000
(c) Cash and Cash Equivalents 2,00,000 2,00,000
(d) Other Current Assets 3 2,00,000 1,00,000
Total 23,00,000 20,00,000

Notes to Accounts
Particulars 31st March, 31st March,
2024 (`) 2023 (`)
1. Other Current Liabilities
Expenses Payable 1,00,000 1,00,000
Current Maturities of Long-term Debt 50,000 ...
1,50,000 1,00,000
2. Inventories
Raw Materials 3,00,000 2,25,000
WIP 1,00,000 75,000
Stores and Spares 50,000 50,000
4,50,000 3,50,000
3. Other Current Assets
Prepaid Expenses 50,000 25,000
Advances to Staff 1,50,000 75,000
2,00,000 1,00,000