I need the answer quickly Q.3Explain the concept of financial statement analysis. Why we do financial statement(04)analysis?Profit and Loss AccountParticularsTo Opening Stock:RsParticularsRsBy Sales1,000,000Raw Materials50,0003,00,0003,50,0001,50,0002,00,0002,00,000Add : PurchasesLess: Closing Stock of Raw MaterialsRaw Materials ConsumedTo WagesTo Factory ExpensesCost of ProductionAdd : Opening Stock of Finished1,00,0005,00,0001,00,000Goods6,00,0001,00,000Less : Closing Stock of Finished GoodsCost of Goods Sold5,00,000To Gross Profit c/d5,00,0001,000,0005,00,000To Administrative ExpensesTo Selling and Distribution ExpensesOperating ExpensesTo Operating Profit c/d1,000,00050,000 By Gross Profit b'd50,0001,00,0004,00,0002,50,00050,000 By Operating Profit10,000 bid2,50,0004,00,000To Loss on Sale of PlantTo Interest on DebentureBy Profit on Sale ofinvestment60,000 (Non-operating3,90,000 income)Non-operating Expenses50,000To Net Profit5,00,0005,00,000Balance SheetRs. Liabilites1,00,000 Creditors1,00,000 Bills PayableAssetsRs.Plant and MachineryLand and BuildingFurniture1,00,00050,00050,000Fixed AssetsBank BalancesSundry DebtorsLiquid AssetsStock of RawMaterialsStock of FinishedGoods2,50,000 Current Liabilities50,000 Working Capital150,0002,50,000100,000150,000 Capital Employed5.00.000150,000 Long-Term Debt:100,000| 12 % Debenture2,00,0004,00,000 Shareholders' FundLess: PreferenceShare CapitalEquity Shareholders'Fund or Net WorthNet Worth3,00,0001,00,000Current Assets2,00,000Represented by:Equity Share CapitalRetained EarningsEquity ShareholdersNet Worth1,00,0001,00,0002,00,000Calculate the following ratios:1) Gross profit ratio4) Operating ratio7) Absolute liquid ratio10) Debt equity ratio13) Current ratio16) Liquid ratio19) Proprietary ratio(21)02) Net profit ratio05) Return on investment ratio 06) Retum on capital employed ratio08) Stock turnover ratio11) Creditor's turnover ratio14) Fixed assets turnover ratio 15) Overall profitability ratio17) Capital turnover ratio20) Capital gearing ratio03) Operating profit ratio09) Earning per equity share ratio12) Working capital turnover ratio18) Net profit to net worth21) Debtor's turmover ratio

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Q.3 Explain the concept of financial statement analysis. Why we do financial statement (04) analysis? Profit and Loss Account Particulars By Sales Particulars Rs Rs To Opening Stock: 1,000,000 Raw Materials 50,000 Add : Purchases 3,00,000 3,50,000 1,50,000 2,00,000 2,00,000 1,00,000 5,00,000 1,00,000 Less: Closing Stock of Raw Materials Raw Materials Consumed To Wages To Factory Expenses Cost of Production Add : Opening Stock of Finished Goods Less : Closing Stock of Finished Goods Cost of Goods Sold To Gross Profit cld 6,00,000 1,00,000 5,00,000 5,00,000 1,000,000 50,000 By Gross Profit b'd 50,000 1,000,000 5,00,000 To Administrative Expenses To Selling and Distribution Expenses Operating Expenses To Operating Profit c/d 1,00,000 4,00,000 2,50,000 To Loss on Sale of Plant 2,50,000 4,00,000 50,000 By Operating Profit 10,000 bid To Interest on Debenture By Profit on Sale of investment 60,000 (Non-operating 3,90,000 income) 50,000 Non-operating Expenses To Net Profit 5,00,000 5,00,000

Q.3 Explain the concept of financial statement analysis. Why we do financial statement (04) analysis? Profit and Loss Account Particulars By Sales Particulars Rs Rs To Opening Stock: 1,000,000 Raw Materials 50,000 Add : Purchases 3,00,000 3,50,000 1,50,000 2,00,000 2,00,000 1,00,000 5,00,000 1,00,000 Less: Closing Stock of Raw Materials Raw Materials Consumed To Wages To Factory Expenses Cost of Production Add : Opening Stock of Finished Goods Less : Closing Stock of Finished Goods Cost of Goods Sold To Gross Profit cld 6,00,000 1,00,000 5,00,000 5,00,000 1,000,000 50,000 By Gross Profit b'd 50,000 1,000,000 5,00,000 To Administrative Expenses To Selling and Distribution Expenses Operating Expenses To Operating Profit c/d 1,00,000 4,00,000 2,50,000 To Loss on Sale of Plant 2,50,000 4,00,000 50,000 By Operating Profit 10,000 bid To Interest on Debenture By Profit on Sale of investment 60,000 (Non-operating 3,90,000 income) 50,000 Non-operating Expenses To Net Profit 5,00,000 5,00,000

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.2BE: Vertical analysis Income statement information for Einsworth Corporation follows: Sales 1,200,000...

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