Prepare the format of statement of profit and loss and explain its items.
Only the revenue or expenses related to the current year are debited or credited to profit and loss account. The profit and loss account starts with gross profit at the credit side and if there is a gross loss, it is shown on the debit side.
How will you disclose the following items in the Balance Sheet of a company;
(i) Loose tools
(ii) Uncalled liability on partly paid-up shares
(iii) Debentures redemption reserve
(iv) Mastheads and publishing titles (v) 10% debentures
(vi) Proposed dividend
(vii) Share forfeited account
(viii) Capital redemtion reserve
(ix) Mining rights
(x) Work-in-progress
The current ratio provides a better measure of overall liquidity only when a
firm’s inventory cannot easily be converted into cash. If inventory is liquid, the
quick ratio is a preferred measure of overall liquidity. Explain.
Explain the usefulness of trend percentages in interpretation of financial performance of a company.
The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?
What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover
What do you understand by analysis and interpretation of financial statements? Discuss its importance.
State the importance of financial statements to
(i) shareholders
(ii) creditors
(iii) government
(iv) investors
What are liquidity ratios? Discuss the importance of current and liquid ratio.
What is the importance of comparative statements? Illustrate youranswer with particular reference to comparative income statement.
What do you mean by Ratio Analysis?
What are important profitability ratios? How are these worked out?
The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?
Distinguish between Vertical and Horizontal Analysis of financial data.
Explain in detail about the significance of the financial statements.
How would you study the Solvency position of the firm?
Describe the different techniques of financial analysis and explain the limitations of financial analysis.
Prepare the format of balance sheet and explain the various elements of balance sheet.
Explain how common size statements are prepared giving an example.
What do you mean by Common Size Statements?
What do you mean by Ratio Analysis?