2016
(May)
COMMERCE
(Speciality)
Course: 602
(Financial Statement Analysis)
Full Marks:
80
Pass Marks: 32
Time: 3 hours
The figures in the margin indicate full
marks for the questions
1. (a) Fill in the blanks with appropriate word(s): 1x5=5
i.
Comparative statement analysis is also known as
____ (vertical analysis/static analysis/horizontal analysis)
ii.
The ____ of a company has primary responsibility
for the corporation’s external financial reporting functions
(management/members/board of directors).
iii.
At present ASB of ICAI formulates the AS based
on ____ (GAAP/IFRS/IAS).
iv.
Ratio of net profit before interest and taxes to
sales is ____ ratio (net profit/profit/operative profit)
(b) State whether
the following statements are True or False: 1x3=3
i.
Analysis of financial statements ignores the
issue of price level changes.
ii.
Capital gearing is a term used to express the
relationship between ordinary share capital and fixed interest bearing
securities of a company.
iii.
The IRDA was incorporated as statutory body in
April 1999.
2. Write short notes on the following (any four): 4x4=16
a)
Common size statement.
b)
Trend analysis.
c)
Acid test ratio.
d)
Financial Accounting Standard Board (FASB)
e)
Sustainability reporting.
3. (a) Explain the concept of interpretation and criticism of
Financial Statement. What are the significances of Financial Statement
Analysis? 5+6=11
Or
(b) Critically
examine the merits and demerits of various techniques used for interpreting Financial
Statements. What are the limitations of such tools? 6+5=11
4. (a) Discuss ratio analysis as a tool and technique of
financial management. State the ratios which may be very useful for studying
efficiency of a manufacturing concern and also explain how these will be used. 6+6=12
Or
(b) The following
is the Balance Sheet of Jagjeevan Industries Ltd. as on 31st March,
2016:
|
Particulars
|
Figures as at the end of current period
(in Rs.)
|
|
I. Equity and Liabilities:
Shareholder’s Fund
Equity Share
Capital
Reserve and
Surplus
Non Current
Liabilities:
10% Debentures
Current
Liabilities:
Bank Overdraft
Sundry Creditors
|
22,50,000
9,00,000
7,50,000
3,00,000
18,00,000
|
|
|
60,00,000
|
|
II. Assets:
Non-Current
Assets:
Fixed Assets
Current Assets:
Investments (short
term)
Stock-in-Trade
Sundry Debtors
Cash
|
24,75,000
2,40,000
13,65,000
18,60,000
60,000
|
|
|
60,00,000
|
Other Information:
Sales – Rs. 1,11,60,000
Gross Profit – Rs. 11,16,000
You are required to calculate the following ratios: 3x4=12
a)
Debt-Equity Ratio.
b)
Proprietary Ratio.
c)
Debtors’ Turnover Ratio.
d)
Stock Turnover Ratio.
5. (a) Write a note on Corporate Social Reporting. What are
the essentials of a perfect corporate social responsibility report? 5+6=11
Or
(b) Define
Financial Reporting. What are the benefits derived from Financial Reporting? 4+7=11
6. (a) Discuss the important provisions need to be
considered for financial reporting of Banking Companies and Insurance
Companies. 6+5=11
Or
(b) Discuss the
guidelines of IRDA regarding disclosure of financial statements of Insurance
Companies. Explain the RBI’s guidelines on the Financial Reporting of NBFCs. 6+5=11
7. (a) “Accounting Standards aim to protect the users of
financial reports in providing reliable and comparable accounting information.”
Explain how these Accounting Standards do help accountants and auditors. 6+5=11
Or
(b) Discuss the
need of International Financial Reporting Standards (IFRS). What are the
differences between International Financial Reporting Standards and Accounting
Standards? 5+6=11
Financial Statements Analysis Question Papers Dibrugarh University
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