Class 12 Accountancy

Chapter 4 Solutions — Analysis of Financial Statements

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Solutions

Overview

Step-by-step NCERT solutions for Analysis of Financial Statements (Chapter 4, CBSE Class 12 Accountancy) — every question and answer worked out in full, not just the final result. You can also read the Analysis of Financial Statements textbook chapter.

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What these solutions cover

All 17 questions in Analysis of Financial Statements are solved in the PDF. Here's what's inside, exercise by exercise:

Short & Long Answer Questions

List the techniques of Financial Statement Analysis.
Distinguish between Vertical and Horizontal Analysis of financial data.
State the meaning of Analysis and Interpretation.
State the importance of Financial Analysis.
What are Comparative Financial Statements?
What do you mean by Common Size Statements?
Describe the different techniques of financial analysis and explain the limitations of financial analysis.
Explain the usefulness of trend percentages in interpretation of financial performance of a company.
What is the importance of comparative statements? Illustrate your answer with particular reference to comparative income statement.
What do you understand by analysis and interpretation of financial statements? Discuss its importance.
Explain how common size statements are prepared giving an example.

Numerical Questions

1.
Following are the balance sheets of Alpha Ltd., as at March 31, 2016 and 2017. You are required to prepare Comparative Balance Sheet. Particulars | March 31, 2016 (Rs.) | March 31, 2017 (Rs.) I. Equity and Liabilities 1. Shareholders' Funds
- (a) Share Capital | 2,00,000 | 4,00,000
- (b) Reserve & Surplus | 1,00,000 | 1,50,000 2. Noncurrent Liabilities
- (a) Long Term Borrowings | 2,00,000 | 3,00,000…
2.
Following are the Balance Sheets of Beta Ltd., as at March 31, 2016 and 2017. Prepare comparative Balance Sheet. Particulars | March 31, 2016 (Rs.) | March 31, 2017 (Rs.) I. Equity and Liabilities 1. Shareholders' Funds
- (a) Share Capital | 4,00,000 | 3,00,000
- (b) Reserves and surplus | 1,50,000 | 1,00,000 2. Non-Current Liabilities
- (a) Long term IDBI | 3,00,000 | 1,00,000 3. Current Liabilities…
Prepare Comparative Statement of profit and loss from the following information. Particulars | 2015-16 (Rs.) | 2016-17 (Rs.) Freight Outward | 20,000 | 10,000 Wages (office) | 10,000 | 5,000 Manufacturing Expenses | 50,000 | 20,000 Stock adjustment | (60,000) | 30,000 Cash purchases | 80,000 | 60,000 Credit purchases | 60,000 | 20,000 Return inward | 8,000 | 4,000 Gross profit | (30,000) |…
Prepare Comparative Statement of Profit and Loss from the following information: Particulars | 2015-16 (Rs.) | 2016-17 (Rs.) Manufacturing expenses | 35,000 | 80,000 Opening stock | 30,000 | 60% of closing stock Sales | 9,60,000 | 4,50,000 Returns outward | 4,000 (out of credit purchase) | 6,000 (out of cash purchase) Closing stock | 150% of opening stock | 1,00,000 Credit purchases | 1,50,000 |…
Prepare a Common size statement of profit and loss of Shefali Ltd. with the help of following information: Particulars | 2015-16 (Rs.) | 2016-17 (Rs.) Revenue from operations | 6,00,000 | 8,00,000 Indirect expense | 25% of gross profit | 25% of gross profit Cost of revenue from operations | 4,28,000 | 7,28,000 Other incomes | 10,000 | 12,000 Income tax | 30% | 30%
Prepare a Common Size balance sheet from the following balance sheet of Aditya Ltd., and Anjali Ltd.: Particulars | Aditya Ltd. (Rs.) | Anjali Ltd. (Rs.) I. Equity and Liabilities 1. Shareholder's Funds a) Equity share capital | 6,00,000 | 8,00,000 b) Reserves and surplus | 3,00,000 | 2,50,000 2. Current liabilities | 1,00,000 | 1,50,000 Total | 10,00,000 | 12,00,000 II. Assets 1. Non current…

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