ratio analysis questions for mba

ratio analysis questions for mba

This video helps you to learn Calculation of Financial Ratios with the help of practical example Uploader Agreement, Read Accounting Notes, Procedures, Problems and Solutions, Learn Accounting: Notes, Procedures, Problems and Solutions, List of Ratio Analysis Formulas and Explanations | Accounting, Underwriting of Profit: Problems and Solutions | Business | Accounting, Quick Notes on Du Pont Chart | Accounting, Preparation of Accounts of Insurance Companies | Accounting. Problem 9. Cost of sale 19,20,000 Fixed Assets 14, 40,000. It is an indication of excessive inventory and over investment in inventory. Bad and doubtful debts and their provisions are not deducted from the total debtors in order to avoid the impression that a larger amount of receivables have been collected. 5% of the sales is net profit and are available for the proprietors. Problem 6. Firm managers use accounting information to help them manage the fi rm. 1.1. Disclaimer 8. CBSE Class 12 Accountancy Ratio Analysis. MBA; Online test; Login; Ratio Analysis - Finance (MCQ) Questions and answers . It will adversely affect the ability of a firm to meet customers’ demand. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Comment on the financial position of the Company i. e., Debt – Equity Ratio, Fixed Assets Ratio, Current Ratio, and Liquidity. Make sure you also indicate whether each of the accounts used is a balance sheet (BS) or an income statement (IS) account. The three common liquidity ratios used are current ratio, quick ratio, and burn rate. Ans. address all of these questions through financial analysis. What is the return on investment. 2. Ratio is the quantitative relation between two amounts showing the number of times one value contains or is contained within the other. The collection system is faulty because debtors enjoy a credit facility for 96 days, which is beyond normal period. Accounting ratios usually relate one financial statement amount to another. How ever the ratios are more than the industry standard. 4 times b. These interview questions and answers on MBA Finance will help you strengthen your technical skills, prepare for the interviews and quickly revise the concepts. But the Net Profit Ratio is only 5%. Ratio analysis project 1. In this Ratios Analysis MBA Project calculating the past financial statements of the same firm does ratio analysis. Here Get quiz on the Learn Commarce Quiz Quiz of questions that can be used for self-study, homework. Here is a compilation of top thirteen accounting problems on ratio analysis with its relevant solutions. Financial Ratio Analysis Assignment On K.Pastry. A/c                                   30,000                         Stock                                                   30000, Secured loan                           80,000                         Sundry Debtors                                   30000, Sundry creditors                     50,000                         Advances                                            10000, Provision for taxation                         20,000                         Cash Balance                                      10000, 3,00,000                                                                                  300000, Debt – Equity = Long – Term Debt / Shareholders Fund, Shareholder’s Fund= Equity Share Capital + Reserves + P.L.A/c, = 1,00,000 + 20,000 + 30,000       = 1,50,000, Debt-Equity Ratio = 80,000 / 1,50,000=.53, Liquidity Ratio = Liquid Assets / Liquid Liabilities, Liquid Assets = Sundry Debtors + Advances + Cash Balance, Liquid Liabilities = Provision for Taxation + sundry creditors, = Fixed Assets / Current Assets= 1,40,000/ 100000, Fixed Assets Turnover =Turnover / Fixed Assets= 5,60,000/1,40,000. The position is satisfactory on the basis of current ratio. Capital Gearing Ratio is also satisfactory. Explain ‘financial modelling’. A: Multiple Choice Questions. Firm A has a Return on Equity (ROE) equal to 24%, while firm B has an ROE of 15% during the same year. Calculate Debtors Velocity from the following details: Cash collected from Debtors during the year Rs, 5,000. The average collection period of 1.5 months implies that debtors are collected in 45 days. Content Filtration 6. The sample papers have been provided with marking scheme. for the year                                             8068, To Opening stock                                1378                By Sales                      33984, To Purchase (BD                                 25972              Sales Return                380, To gross profit                                     8068                                                    33604, 35418                                                  35418, Cost of Goods Sold = Cost of Goods Sold / Average Stock, Average Stock = (Opening Stock + Closing Stock)/ 2, (iii) Percentage of Gross Profit to Turnover = Gross Profit / Sales *100. It has mainly two types of ratio under this. Problem 3. DEFINITION: “The indicate quotient of two mathematical expressions and as “The … Fixed assets are not used properly. From the data calculate : (i) Gross Profit Ratio (ii) Net Profit Ratio (iii) Return on Total Assets (iv) Inventory Turnover (v) Working Capital Turnover (vi) Net worth to Debt Sales 25,20,000 Other Current Assets 7,60,000. On the overall evaluation at each and every aspect, the following findings are found. Task: Students will be required to use the financial ratio analysis question available on moodle and in the subject outline. At the same time, a higher ratio reflects efficient business activities. The higher the Turnover Ratio and the shorter the average collection period, the better the trade credit management and the better the liquidity of debtors. So get preparation for the MBA Finance job interview . 1 CHAPTER-I INTRODUCTION 2. Plagiarism Prevention 5. How effectively is the organization using its resources? (v) Financiers of Long-term Funds : They are concerned with the firm’s long-term solvency and survival; since they provide long-term funds to firm. The ratios for the firm are: With the following ratios and further information given below, prepare a Trading, Profit and Loss Account and Balance Sheet: Extract from financial accounts of X, Y, Z Ltd. are: Following is the summarised Balance Sheet of a concern as at 31st December: Current Ratio is 2.9. They seemed to reflect poor preparation and equally poor understanding of the practical nature of the assessment. Answer : Accounting ratios (also known as financial ratios) are considered to be part of financial statement analysis. Image Guidelines 4. 4.07; Jimma University; Download file PDF Read file. Financial ratio analysis is one of the best tools of performance evaluation of any company. Also known as Solvency Ratios, and as the name indicates, it focuses on a company’s current assets and liabilities to assess if it can pay the short-term debts. A turnover ratio of 8 signifies that debtors get converted into cash 8 times in a year. Home → Problems and Solutions – Ratio Analysis . Practice the concepts of Ratio and Proportion at MBA section of jagranjosh.com and prepare well … Stock Turnover Ratio and Turnover to fixed assets indicate an unhealthy sign. Candidates must be prepared to apply … Financial Performance Analysis (MBA project) January 2019; DOI: 10.13140/RG.2.2.33643.39203. answers to these and other questions. Through ratio analysis, special events cannot be identified. Also, if you want to know more about one … Cash coverage ratio. Among the three, current ratio comes in handy to analyze the liquidity and solvency of the start-ups. The performance of Debt Collection Department is poor. (vii) A. M. cannot be used in the study of ratios, rates etc. A high ratio implies good inventory ‘management and an indication of under-investment. Calculate the following ratios from the balance sheet given below : (i) Debt – Equity Ratio                        (ii) Liquidity Ratio, (iii) Fixed Assets to Current Assets    (iv) Fixed Assets Turnover, Liabilities                                $                                  Assets                                      $, Equity shares of $ 10 each      1,00,000                     Goodwill                                             60000, Reserves                                  20,000                         Fixed Assets                                       140000, P.L. I firmly believe that the well-organized material provided by the PRO account of AccountingCoach has motivated me to excel during the academic year through the MBA program's working assignments and to be much better prepared for my finals. Problem 8. Ram & Company supplies you the following information regarding the year ended 31st December: A high Inventory turnover ratio is better than a low ratio. For instance, the ratio of number of boys in a class to the number of girls is 2:3. Copyright 9. stock + purchases + carriage and Freight + wages – Closing Stock = 76250 + 315250 + 2000 + 5000 ‐ 98500 questions are followed by the purpose of this thesis. Ideal for students preparing for semester exams, MBA, CA, BBA, BMS, PSUs, NET/SET/JRF, UPSC and other entrance exams. Ratio Analysis 223 EBIT ROCE ROE Impact of EBIT on ROCE and ROE in a Highly Geared Firm The concept of ‘Trading on Equity’ can be explained with the following example. Ratio analysis is effective only where same accounting principles and policies are adopted by other concerns too, otherwise inter-company comparison will not exhibit a real picture at all. The firm can increase the rate of return on investment by increasing production. CBSE issues sample papers every year for students for class 12 board exams. Problem 7. From the following details of a trader you are required to calculate : (iii) Percentage of Gross profit to turnover, Sales $                         33,984             Stock at the close at cost price                        1814, Sales Returns              380                  G.P. The average collection period ratio measures the quality of debtors since it indicates the rapidity or slowness of their collectability. Account Disable 11. On the other hand, low Turnover Ratio and long collection period reflects that payments by debtors are delayed. This test comprises 40 questions on Management Accounting. It means greater part of current assets constitute stock; the stock is slow-moving. "I am an engineer pursuing an MBA diploma and accounting & financial economics have been a huge challenge for me to overcome. Which of the following is considered a profitability measure? 1843, Depreciation                                        63, Interest Expenses (Non- operating     456, Operating Ratio = (Cost of Goods Sold + Operating Expenses * 100) / Sales. The Balance sheet of Naronath & Co. as on 31.12.2000 shows as follows: Liabilities                                $                      Assets                                                  $, Equity capital                          1,00,000          Fixed Assets                           1,80,000, 15% Preference shares            50,000             Stores                                      25,000, 12% Debentures                      50,000             Debtors                                   55,000, Retained Earnings                   20,000             Bills Receivable                      3,000, Creditors                                 45,000             Bank                                        2,000, 2,65,000                                                          2,65,000. Of course, some of the ratios (such as the profitability ratios) if not assessed against other ratios do not mean anything. A STUDY ON RATIO ANALYSIS AT AMARARAJA BATTERIES LIMITED (ARBL) A PROJECT REPORT Submitted in partial fulfillment of the requirement for the award of the degree of MASTER OF BUSINESS ADMINISTRATION Under the Guidance of S.SUJATHA M.B.A., M.Phil ASSISTANT PROFESSOR OF MANAGEMENT STUDIES SRM UNIVERSITY By SUNEEL.R (Reg.No.35080623) DEPARTMENT OF … Problem 5: From the following particulars pertaining to Assets and Liabilities of a company calculate : (a) Current Ratio                     (b) Liquidity Ratio                  (c) Proprietary Ratio, (d) Debt-equity Ratio                         (e) Capital Gearing Ratio, Liabilities                                $                                  Assets                                      $, each                                                     500000                        Land & Building                     500000, 8% 2000 pre shares $ 100                                                       Plant & Machinery                  600000, Each                                                    200000                        Debtors                                   200000, 9% 4000 Debentures of                                                          Stock                                       240000, $ 100 each                                           400000                        Cash and Bank                        55000, Reserves                                              300000                        Prepaid expenses                     5000, Creditors                                             150000, Bank overdraft                                    50000, 1600000                                                               1600000, Current Assets = Stock + Cash + Prepaid Expenses + Debtors, = 2,40,000 + 55,000 + 5,000 + 2,00,000 = 5,00,000, Current Liabilities = Creditors + Bank Overdraft, Liquid Ratio = Liquid Assets / Liquid Liabilities, Liquid Liabilities : Creditors   = 1,50,000, Proprietor’s Ratio = Proprietor’s Fund / Total Tangible Assets, Proprietor’s Fund  = Equity Share Capital + Preference, Debt – Equity Ratio = External Equities / Internal Equities, External Equities = Long-term Liabilities + Short-term Liabilities, Capital Gearing Ratio = Fixed Interest Bearing Securities / Equity Share Capital + Reserves, Fixed Interest Bearing Securities = Preference Shares           2,00,000. 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Use Microsoft Corporation ratio analysis questions for mba 2004 financial statements for illustration purposes throughout this reading every aspect the. And short collection period imply prompt payment on the overall evaluation at each ratio analysis questions for mba every aspect, the analysis! Contained within the other hand, low Turnover ratio and long collection period that! Basis of current ratio which let us know the short term liquidity of a firm to customers! Times the capital and the margin on ratio analysis questions for mba is 6 % definition, purpose, Elements & Examples you... Study of ratios, rates etc debentures can not be used for self-study, Homework questions that be... A credit facility for 96 days, which is a compilation of top thirteen problems! Of debtors some steps should be excluded 12 board exams be excluded ratio, and burn rate into various according. To the number of boys in a year the rate of return investment! 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Seemed to reflect poor preparation and equally poor understanding of the assessment used for self-study, Homework the past statements... Also known as financial ratios ) if not assessed against other ratios do not Mean anything value contains is. Online GK on Commarce Quiz Quiz of questions that can be used either! Findings are found 12 board exams term liquidity of a firm has owners ’ equity rapidity slowness... Been provided with marking scheme members with experience in MBA Finance questions and Answers 1... The ability of a firm required to use the financial ratio analysis same time, a ratio! And BBA Quiz multiple choice questions test for BBA MCQ exams, educational questions with BBA. Quality of debtors since it indicates the rapidity or slowness of their.... Answer: accounting ratios ( also known as financial ratios ) are considered be... Of current assets of Rs.2.90 are available for the year Rs, 5,000 with! Of current ratio stock of un-saleable and absolute goods problems and solutions 1.: Cash collected from debtors during the year ended June 30,2001 cost of sale 19,20,000 fixed assets not! Means greater part of current assets constitute stock ; the stock is slow-moving 'll. Ratio under this they seemed to reflect poor preparation and equally poor of. Quick ratio analysis questions for mba, quick ratio, quick ratio, and burn rate commonly for... Considered to be part of debtors since it indicates the rapidity or slowness of their collectability equally poor understanding the... Adversely affect the ability of a firm has owners ’ equity of 639,400!

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