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RST Ltd. has the following profit and loss account for the year ended 31st December 2023: Particulars Amount () Sales 20,00,000 Cost of Goods Sold

RST Ltd. has the following profit and loss account for the year ended 31st December 2023:

Particulars

Amount (₹)

Sales

20,00,000

Cost of Goods Sold

12,00,000

Gross Profit

8,00,000

Operating Expenses

4,00,000

Operating Profit

4,00,000

Interest Expenses

50,000

Net Profit before Tax

3,50,000

Tax

1,00,000

Net Profit

2,50,000

  1. PREPARE the statement of retained earnings.
  2. CALCULATE the dividend payout ratio if ₹1,00,000 is paid as dividends.
  3. ANALYZE the impact on retained earnings if net profit increases by 15%.
  4. EVALUATE the effect of reducing operating expenses by 10% on net profit.
  5. DISCUSS the strategic importance of retained earnings for business growth.

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