Question
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
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
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