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Taking into consideration extract of Profit and Loss Account and Balance Sheet of Reliable India Ltd. calculate Liquidity, Profitability and Solvency Ratios. Also, as
Taking into consideration extract of Profit and Loss Account and Balance Sheet of Reliable India Ltd. calculate Liquidity, Profitability and Solvency Ratios. Also, as a consultant guide your client whether he should purchase shares of this company or not. And secondly as a bank whether additional loan should be given to this company or not. Give proper reasons to justify your answer. Trading and Profit & Loss Account of Reliable India Ltd. for the year ended 31 March, 2021 Particulars Amount in Particulars By Sales By Closing Stock Opening To Stock To Purchases To Wages To Gross Profit Total To Salaries To Electricity To Misc. Expenses To Depreciation To Net Profit Rs 90,000 5,60,000 2,14,000 1,26,000 9,90,000 16,000 10,000 10,000 30,000 60,000 1,26,000 Total By Gross Profit Liabilities in Rs. Assets Equity Share 1,80,000 Capital Fixed Assets less Depreciation (5.40,000-1.50,000) 1,26,000 Balance Sheet of Reliable India Ltd.as on 31 March, 2021 Reserves and 1,20,000 Stock Surplus Secured 2,10,000 Debtors Loans Creditors 90,000 Cash 600,000 Amount in Rs. 9,00,000 90,000 9,90,000 1,26,000 in Rs. 3,90,000 90,000 1,05,000 15,000 600,000
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