The above is the balance sheet and profit and loss account of A Cement Ltd for 3 years. The Company is exclusively engaged in cement business. The shares of the company are listed in stock exchange. From the figures given above calculate following for all the years in a table form : 1) EBIT or PBIT 2) EBIDTA or PBIDTA 3) Return on capital employed 4) Margin 5) Capital turnover ratio. 6) Fixed assets turnover ratio 7) Inventory and debtors turnover ratio 8) Cash turnover ratio 9) Current ratio 10)Analyse the results. Show your workings clearly.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![EQUITIES AND LIABILITIES (in Rs. crore)
SHAREHOLDER'S FUNDS
2019
2018
2017
Equity Share Capital
397.13
397.13
397.13
Reserves and Surplus
21,808.05
20,615.40
19,576.08
TOTAL SHAREHOLDERS FUNDS
22,205.18
21,012.53
19,973.21
NON-CURRENT LIABILITIES
Long Term Borrowings
35.28
39.68
24.12
Deferred Tax Liabilities [Net]
216.06
372.16
458.36
Other Long Term Liabilities
36.45
8.35
8.94
Long Term Provisions
50.34
38.53
35.23
TOTAL NON-CURRENT LIABILITIES
338.13
458.72
526.65
CURRENT LIABILITIES
Short Term Borrowings
0.00
0.00
0.00
Trade Payables
935.98
1,109.46
1,046.53
Other Current Liabilities
3,426.07
2,514.92
2,993.37
Short Term Provisions
85.37
91.05
87.08
TOTAL CURRENT LIABILITIES
4,447.42
3,715.43
4,126.98
TOTAL CAPITAL AND LIABILITIES
26,990.73
25,186.68
24,626.84
ASSETS
NON-CURRENT ASSETS
Tangible Assets
5,633.62
5,563.19
5,693.45
Intangible Assets
178.83
100.41
28.54
Capital Work-In-Progress
1,108.70
610.02
348.48
FIXED ASSETS
6,921.15
6,273.62
6,119.91
Non-Current Investments
11,789.01
11,813.76
11,844.70
Long Term Loans And Advances
62.90
60.34
66.52
Other Non-Current Assets
1,369.57
1,298.66
1,085.53
TOTAL NON-CURRENT ASSETS
20,142.63
19,446.38
19,116.66
CURRENT ASSETS
Inventories
954.07
1,277.76
1,052.50
Trade Receivables
513.22
470.26
307.97
Cash And Cash Equivalents
4,699.49
3,329.97
3,497.07
Short Term Loans And Advances
4.51
4.29
30.29
Other Current Assets
676.81
658.02
622.35
TOTAL CURRENT ASSETS
6,848.10
5,740.30
5,510.18
TOTAL ASSETS
26,990.73
25,186.68
24,626.84
P/L Account
Year
2019
2018
2017
Operating ReveUE
11,667.88
11,356.76
10,457.10
Other Income
426.52
374.98
359.09
TOTAL REVENUE
12,094.40
11,731.74
10,816.19
EXPENSES
Cost Of Materials Consumed
3,580.84
3,558.92
3,142.40
-72.87
-62.83
Changes In Inventories Of FG,WIP And
Stock-In Trade
42.80
Employee Benefit Expenses
672.63
679.57
661.37
Finance Costs
83.52
82.33
107.19
Depreciation And Amortisation
543.83
548.09
572.92
TOTAL EXPENSES
10,146.38
10,095.72
9,197.07
PROFIT/LOSS BEFORE TAX
1,948.02
1,506.07
1,619.12
The above is the balance sheet and profit and loss account of A Cement Ltd for 3 years. The Company is exclusively engaged in cement business. The
shares of the company are listed in stock exchange.
From the figures given above calculate following for all the years in a table form :
1) EBIT or PBIT
2) EBIDTA or PBIDTA
3) Return on capital employed
4) Margin
5) Capital turnover ratio.
6) Fixed assets turnover ratio
7) Inventory and debtors turnover ratio
8) Cash turnover ratio
9) Current ratio
10)Analyse the results.
Show your workings clearly.
11) The fixed asset and depreciation have remained stagnant. In the context how do you interpret and analyse the cement company's numbers in the
backdrop of economic situation of the country.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F611df1d7-534a-4d80-81f2-c14964b08b47%2F7efc6471-55b9-4b66-acbd-5cac9d019d65%2Fnjdfv6c_processed.jpeg&w=3840&q=75)
![Particulars
Rs
A. Sales
72,900
Less: Expenses
a) Production, Admn. And distribution 54,100
expenses
B. Total Expenses
58,900
PBT
[A-B]
13,000
Tax Provision
6,700
PAT
6,300
Relevant Balance sheet accounts at the end of 2019 and 2020 are given below:
Balances
2020
2019
Inventories
Rs 7400
Rs 4500
Debtors
8300
8900
Creditors
9800
14900
Tax payable
4800
3300
Prepare Cash flow from operation statement.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F611df1d7-534a-4d80-81f2-c14964b08b47%2F7efc6471-55b9-4b66-acbd-5cac9d019d65%2Fkhmt7pe_processed.jpeg&w=3840&q=75)
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