Q.1 Below are the financial reports of Zenith Ltd Zenith Ltd. Statement of financial position as at March 31, 20X2 USD. in million 20X2 20X1 EQUITY AND LIABILITIES Share capital * 300 300 Reserves and surplus 560 500 Equity 860 800 Non-current Liabilities Long-term borrowings** 420 400 Deferred tax liabilities(net) 75 70 Long-term provisions 70 60 Total 565 530 Current Liabilities Short-term borrowings 190 200 Trade payables 90 80 Other current liabilities 26 20 Short-term provisions 12 10 Total Current Liabilities 318 310 Equity & Liabilities 1743 1640 Non-current Assets Fixed assets 520 500 Non-current investments 101 90 Long-term loans and advances 22 20 Total Noncurrent Assets 643 610 Current Assets Current investments 50 80 Inventories 510 480 Trade receivables 480 420 Cash and cash equivalents 12 10 Short-term loans and advances 48 40 Total current assets 1,100 1,030 Total 1743 1640 Zenith Ltd. Statement of comprehensive income as at March 31, 20X2 USD,000 Revenue from operations 1000 Other income 30 Total revenues 1030 Expenses Material expenses 420 Employee benefits expenses 300 Finance costs 70 Depreciation and amortization expenses 50 Other expenses 28 Total expenses 868 Profit before tax 162 Tax expenses 42 Profit( loss for the period) 120 Dividends 60 Retained Earning 60

a) With Examples, differentiate between Vertical and Horizontal ratio analysis.(6 marks)

b) Discuss the objectives of financial statements analysis to organisations and potential investors. (10 marks)

c) Calculate and comment on the following ratios for the year 20X2

i) Liquidity Ratios (6 Marks)

ii) Profitability Ratios (6 Marks)

iii) Efficiency Ratios (6 Marks)

iv) Debt Capital Ratio (6 Marks) Total (40: Marks)