Question
Sunrise Companys balance sheet on March 31, 2019 and 2018 and statement of profit and loss for the year ended March 31, 2019 and 2018
Sunrise Companys balance sheet on March 31, 2019 and 2018 and statement of profit and loss for the year ended March 31, 2019 and 2018 are as follows:
Sunrise Company Limited Balance Sheet, March 31 | ||
Description | 2019 (Rs) | 2018 (Rs) |
Assets |
|
|
Non-current assets |
|
|
Property, plant and equipment | 675,000 | 650,000 |
Non-current investments | 25,000 | 25,000 |
Current assets |
|
|
Inventories | 42,500 | 35,000 |
Trade receivables | 75,000 | 67,500 |
Cash and cash equivalents | 62,500 | 50,000 |
Other current assets | 37,500 | 7,500 |
Total assets | 917,500 | 835,000 |
Equity and Liabilities |
|
|
Equity |
|
|
Equity share capital | 500,000 | 500,000 |
Reserves and Surplus | 187,500 | 127,500 |
Non-current liabilities |
|
|
Long Term Borrowings | 142,500 | 125,000 |
Current liabilities |
|
|
Trade payables | 87,500 | 82,500 |
Total equity and liabilities | 917,500 | 835,000 |
Sunrise Company Limited Statement of Profit and Loss For the year ended March 31 | ||
| 2019 (Rs) | 2018 (Rs) |
Net Sales | 1,500,000 | 1,275,000 |
Cost of goods sold | 1,050,000 | 1,025,000 |
Gross Profit | 450,000 | 250,000 |
Selling and administrative expenses | 195,000 | 175,000 |
Profit before interest and tax | 255,000 | 75,000 |
Interest expense | 45,000 | 22,500 |
Profit before tax | 210,000 | 52,500 |
Income tax | 100,000 | 22,500 |
Profit after tax | 110,000 | 30,000 |
Additional Information:
| 2019 (Rs) | 2018 (Rs) |
Market price per share | 2,200.00 | 300.00 |
Dividend per share | 25.00 | 12.50 |
Earnings per share | 55.00 | 15.00 |
On March 31, 2017 the company had inventories of Rs 32,500, receivables of Rs 50,000, total assets of Rs 675,000 and equity of Rs 622,500.
- Prepare a horizontal analysis of the statement of profit and loss and balance sheet showing amount and percentage changes from 2018 to 2019.
- Prepare a common size statement of profit and loss and balance sheet.
- Comment on the results found in Requirements 1 and 2.
- Compute profitability, liquidity, solvency and capital market standing ratios.
- Using the ratios computed in Requirement 4 above, evaluate companys profitability, liquidity, solvency and capital market standing.
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