2018 (May)
COMMERCE (Speciality)
Course: 602 (Financial Statement Analysis)
Time: 3 hours
The figures in the
margin indicate full marks for the questions
(NEW COURSE)
Full Marks: 80
Pass Marks: 24
1) Financial
statements are the end product of financial accounting process.
2) Liquidity
ratios indicate the firm’s ability to pay its current liability.
3) Financial
statements also disclose such facts which are not recorded in accounting books.
4) IFRS-4
is associated with insurance contracts.
5) Corporate
social responsibility reporting is not mandatory for any business in India.
(b)
Fill in the blanks with appropriate word(s): 1x3=3
1) Financial
statement analysis helps to measure _____ (operating efficiency/management
efficiency/employees efficiency).
2) Quick
assets are current assets less _____ and _____ expenses (stock, prepaid/debtor,
outstanding/bank overdraft, prepaid).
3) Compliance
of Corporate Governance was made mandatory by SEBI as listing requirement vide
_____ (Clause 49/Clause 32).
2.
Write short notes on the following (any four): 4x4=16
a) Objectives
of financial statement analysis.
b) Common
size statements.
c) Liquid
ratio.
d) Corporate
Financial Reporting.
e) RBI
guidelines regarding financial reporting by banks.
f) Trend
Analysis.
3.
(a) What are the constituents of Financial Statements? Give a brief note on
each of them. 14
Or
(b) What are the different techniques used for the analysis
and interpretation of Financial Statements? Explain in brief. 14
4.
(a) The following information are available for a firm: 14
Gross Profit Ratio – 25%
Net Profit/Sales – 20%
Stock Turnover – 10
Net Profit/Capital – 1/5
Capital/Total Liabilities –
1/2
Fixed Assets/Capital – 5/4
Fixed Assets/Current Assets –
5/7
Fixed Assets – Rs. 10,00,000
Closing Stock – Rs. 10,00,000
|
Find out:
1) Cost
of Sales.
2) Gross
Profit.
3) Net
Profit.
4) Current
Assets.
5) Capital.
6) Total
Liabilities.
7) Opening
Stocks.
Or
(b) “As a technique of financial analysis, ratios must be
used with great precautions.” In the light of the above statement, critically
examine the importance of rations and their limitations. 14
5.
(a) Discuss the current status of Corporate Governance Reporting in India. How
does Corporate Governance Reporting differ from Corporate Financial Reporting? 7+7=14
Or
(b) Give a brief note on mandatory and voluntary disclosures
on Corporate Social Responsibility Reporting. 14
6.
(a) Explain the recommendations of the report of the advisory groups on
accounting and auditing setup by Reserve Bank of India. Distinguish between
Financial Reporting by banks and NBFC. 8+6=14
Or
(b) Discuss the IRDA guidelines regarding the Financial
Reporting of Insurance Companies in India. 14
(OLD COURSE)
Full Marks: 80
Pass Marks: 32
1.
(a) State whether the following statements are True or False: 1x5=5
1) Financial
statements accomplish only internal reporting.
2) Current
ratio is also known as acid test ratio.
3) Corporate
financial reporting in fact is an effective communication of accounting
information between the management and the user groups of the financial
statements.
4) The
new name for standard issued by the FASB is International Financial Reporting
Standards (IFRS).
5) The
IRDA was incorporated as a statutory body in April 2000.
(b)
Fill in the blanks with appropriate words: 1x3=3
1) The
basic objective of financial statements is to _____ (provide accounting
information/meet legal requirement/show performance of management).
2) GAAP
stands for _____.
3) According
to IFRS, banking companies are to adopt _____ (fair value accounting/historical
value accounting).
2.
Write short notes on any four of the following: 4x4=16
a) Value-added
statement.
b) Limitation
of ratio analysis.
c) RBI
guidelines regarding financial reporting of banks.
d) IRDA.
e) Profitability
ratio.
f) Comparative
statements.
3.
(a) State the significance of analysis of Financial Statements towards the
stakeholder of the company. What are the limitations of Financial Statements? 5+6=11
Or
(b) “Analysis of Financial Statements is affected by the
window dressing and bias motive of analyst.” Explain. Also explain the tools
used for analysis financial statements. 5+6=11
4.
(a) Discuss the advantages and limitations of Ratio Analysis. 6+6=12
Or
(b) Prepare a projected Balance Sheet on the basis of the
following information: 12
Estimates Sales – Rs.
4,50,000
Sales to Net Worth – 2.5
times
Total Debt to Net Worth – 65%
Current Liabilities to Net
Worth – 25%
Current Ratio – 3.6
Sales to Inventory – 5 times
Average Collection Period –
36 days in a year of 360 days
Fixed Assets to Net Worth –
75%
|
5.
(a) Why is the financial reporting a mandatory requirement in the annual report
of a company? How is financial reporting differ from financial statements? 6+5=11
Or
(b) Disclosure of corporate governance practices followed by
Indian companies in their published annual reports is the best way to provide
information to its stakeholders. Comment. 11
6.
(a) Discuss about the convergence of Indian Accounting Standards with IFRS. 11
Or
(b) What are the benefits may enjoyed by a Nation’s economy
if there is a single set of Global Accounting Standards? State the steps to be
adopted by an entity for first-time adaptation of IFRS.
7.
(a) Discuss the important provisions needed to be taken into consideration for
financial reporting of Banking and Insurance Companies. 11
Or
(b) Discuss the guidelines of IRDA regarding disclosure of
financial statements of Insurance Companies. 11
Financial Statements Analysis Question Papers Dibrugarh University
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