Vinyl Chemicals (India) Limited, a Parekh Group company, is a medium-sized, intermediate organic chemicals manufacturer. We present the balance sheet and income statement of the company in brief, for two financial years of 12 months each.

Given the limited information, you are to prepare its funds flow statement as given below (i.e., fill in the blanks wherever appropriate). You may like to look at Annexure 4.1 on the OLC on Funds Flow Statement before answering this case.

Based on the funds flow statement above, answer the following questions about Vinyl Chemicals (India):

(a) Comment on the statement (stating whether you agree or disagree with the same) - ‘Vinyl Chemicals (India) has essentially tapped short-term sources of financing for its long-term requirements’.

(b) The funds generated from operations were not sufficient to fund its increase of other assets - Do you agree or disagree? Comments.

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Assets Side Cash & Bank Balances Accounts Receivable Loans and Advances Inventories Fixed Assets Other Assets (includes investments) Total Assets Liabilities Side Current Liabilities & Provisions Long-term Liabilities Net Worth Total Liabilities Vinyl Chemicals (India) Limited Balance Sheet for the financial years... (all figures in million) Current Year Previous Year 33 145 21 141 3 101 444 Current Year 342 11 91 444 10 34 19 119 3 25 210 Previous Year 163 11 36 210