Following information are available for SRK Co. along with various ratios relevant to the particular industry which it belongs.

Balance Sheet As at 31.03.2014

Liabilities

Amount

Assets

Amounts

Equity Share Capital

2,400,000.00

Fixed Assests

1,210,000.00

10% Debenture

460,000.00

Cash

440,000.00

Sundry Creditors

330,000.00

Sundry Debtors

550,000.00

Bills Payable

440,000.00

Stocks

1,650,000.00

Other Current Liabilities

220,000.00

3,850,000.00

3,850,000.00

Statement of Profitability for the year ending 31.03.2014

Particulars

Rs.

Rs.

Sales

5,500,000.00

Less: Cost of Good Sold:

Material

2090000

Wages

1320000

Factory Overheads

649000

44,059,000.00

Gross Profit

1,441,000.00

Less: Selling and Distribution Cost

550000

Admin Cost

614000

1,164,000.00

Earning before Interest and Taxes

277,000.00

Less: Interest Charges

46,000.00

Earning before Taxes

231,000.00

Less: Tax @50%

115,500.00

Net Profit(PAT)

115,500.00

Industry Norms

Current Assets/Current liabilities

2.5

sales/Debtors

8.0

Sales/Stocks

9.0

Sales/Total Assets

2.0

Net Profit/Sales

3.5%

Net Profit/Total Assets

7.0%

Net Profit/ Net Worth

10.5%

Total Debt/Total Assets

60.0%

1. Find out the relevant ratios relating to SRK Co

2.Give your comments on Strengths and Weakness of SRK Co.

3. Compare its ratios with industry Norms