Mandalika has Published 473 Articles

What is Accounting Rate of Return in discounted cash flow technique in capital budgeting?

Mandalika

Mandalika

Updated on 11-Aug-2020 11:32:21

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ARR stands for Accounting Rate of Return. It is one of the Non- Discounted cash flow techniques used for calculating capital budgeting.ARR is the average net income of an asset (anticipated) divided by its average capital cost. It is generally expressed as an annual percentage. ARR does not take in ... Read More

Define NPV in discounted cash flow technique in capital budgeting.

Mandalika

Mandalika

Updated on 11-Aug-2020 11:31:33

226 Views

Net present value (NPV) is the value of all future cash flows over the entire life of an investment discounted to the present. It is one of the most reliable techniques used in capital budgeting, because it is based on discounted cash flow approach. It may be positive, zero or ... Read More

What is capital budgeting in finance?

Mandalika

Mandalika

Updated on 11-Aug-2020 11:30:39

947 Views

Capital budgeting is a process a business undertakes to evaluate potential major projects or investments. It is a planning process used to decide the company’s long term investments like new machinery, new plants, new products, research development projects etc. are worth the funding through firm capitalisation. Primary objective of investments ... Read More

Calculate Ratio analysis for following table

Mandalika

Mandalika

Updated on 11-Aug-2020 11:29:49

103 Views

LiabilitiesRs.AssetsRs.Equity share capital15000Fixed assets (less depreciation Rs.12000)360007% preference share capital3500Reserves and surplus110006% mortgage debentures16500Current liabilitiesCurrent assetsCreditors1300Cash1790Bills payable2200Investments (12%)4055Outstanding expenses500Sundry debtors4740Stock6415Tax provision30005300053000Additional information − Net sales: Rs.55000, Cost of goods sold: Rs. 48600, Net income before Tax: Rs. 3500, Net income after Tax: Rs. 1400SOLUTIONThe solution is as follows −Short term ... Read More

Prepare cash flow statement for the following Balance sheet as on 31st March

Mandalika

Mandalika

Updated on 11-Aug-2020 11:28:43

236 Views

Liabilities20042005Assets20042005Share capital100000110000Land and building6000060000Profit and loss a/c Loans2000023000Plant and machinery3500045000Loans-1000stock2000025000Creditors1500018000Debtors1800028000Bills payable50004000Bills receivable20001000Cash500060001400001650005000165000SOLUTIONThe solution is as follows −InflowRs.OutflowRs.Balance b/d5000Purchase of plant10000Issued share capital10000Increase current AssetsLoan10000StockCash opening profit3000Decrease in bills payable5000Decrease in bills1000Balance c/d10000Receivable30001000Increase in creditors60003200032000Read More

Analyse the below table and prepare a common size balance sheet (one of the techniques used in financial statement analysis)

Mandalika

Mandalika

Updated on 11-Aug-2020 11:28:17

101 Views

Liabilities2003 (Rs)2004 (Rs.)Assets2003 (Rs.)2004 (Rs.)Capital54825482Cash and balance with RBI67058025543697Reserve and surplus69963008406754Balance with banks and money at call short notice37816115349090Deposits7354078879299033Investments4226011046435410Borrowings672177262960Advances5794769962502390other liabilities and provisions15147661632769Fixed assets369499401240Other assets408108640325228272951389606998115145807124264349solutionThe solution is as follows−PARTICULARS2003 (Rs.)Percentage2004 (Rs.)PercentageAssetsTotal current assetsCash and balance with RBI67058025.8255436974.46Balance with banks and money at call and short notice37816113.2853490904.30Total current assets104874139.10108927878.86Fixed assetsInvestments4226011036.704643541037.37Advances5794769950.336250239050.29Fixed Assets36949900.324012400.32Other Assets408108603.5540325223.25Total ... Read More

Prepare a schedule of changes in working capital and statements of funds of flowBalance sheet as on 31st March

Mandalika

Mandalika

Updated on 11-Aug-2020 11:27:31

2K+ Views

Liabilities20042005Assets20042005Share capital150000180000Land and building8500085000Profit and loss a/c Loans3500042000Plant and machinery5400070000Loans200015000stock3050050000Creditors1700023000Debtors2550045000Bills payable30001000Bills receivable50002000Cash70009000207000261000207000261000SOLUTIONThe solution is as follows −                    Working capital= current assets – current liabilitiesChanges in working capitalParticulars2004 (Rs.)2005 (Rs.)Incharge (Rs.)Decharge (Rs.)Current AssetsStock305005000019500Debtors255004500019500Bills Receivable500010002000Cash700090002000Total (X)68000106000Current liabilitiesCreditors17000230006000Bills payable300010002000Total (Y)2000024000430008000X-Y480008200035000Increase in W.C.34000340004300043000FUNDS FLOW STATEMENTSourceRs.ApplicationRs.Issued ... Read More

Analyse the following table and prepare a trend analysis (one of the techniques used in financialstatement analysis)

Mandalika

Mandalika

Updated on 11-Aug-2020 11:26:02

115 Views

YearDepositsAdvancesProfit199929585549782917751301120003834587510115298594580200146005530128007097382252002536681881428825076951620035878649015799280933680200463372248170362901181468SOLUTIONThe solution is as follows −For DepositsMake Base year as 1990 => 29585549 (100%)YearDepositsCTrend percentage (C*100)199929585549(D1)(D1/D1) = 1100200038345875(D2)(D2/D1) = 1.296129.6200146005530(D3)(D3/D1) = 1.555155.5200253668188(D4)(D4/D1) = 1.814181.4200358786490(D5)(D5/D1) = 1.987198.7200463372248(D6)(D6/D1) = 2.142214.2For Advances − Make Base year as 1990 => 7829177 (100%)YearAdvancesCTrend percentage (C*100)19997829177 (A1)(A1/A1)=1100200010115298 (A2)(A2/A1)= 1.292129.2200112800709 (A3)(A3/A1)= 1.635163.5200214288250 (A4)(A4/A1)= 1.825182.5200315799280 (A5)(A5/A1)= 2.018201.8200417036290 (A6)(A6/A1)= ... Read More

How to prepare comparative balance sheet?

Mandalika

Mandalika

Updated on 11-Aug-2020 11:21:46

162 Views

Liabilities2003 (Rs.)2004 (Rs.)Assets2003 (Rs.)2004 (Rs.)Capital54825482Cash and balance with RBI67058025543697Reserve and surplus69963008406754Balance with banks and money at call short notice37816115349090Deposits7354078879299033Investments4226011046435410Borrowings672177262960Advances5794769962502390Other liabilities and provisions15147661632769Fixed assets369499401240Other assets408108640325228272951389606998115145807124264349SOLUTIONThe solution is as follows −ParticularsYear ending 31st marchIncreased/ DecreasedIncreased/ Decreased (%)2003 (Rs.)2004 (Rs.)Amount (Rs)Amount (Rs)AssetsTotal current assetsABA-B=C(C/A)*100Cash and balance with RBI670580255436971162410517.33Balance with banks and money at ... Read More

Explain various techniques used in financial statement analysis.

Mandalika

Mandalika

Updated on 06-Aug-2020 08:30:43

589 Views

Financial statement analysis is interpreted mainly to determine the financial operational performances of the business concern. Following are the common techniques that are widely used −Comparative statement analysis − These statements help to understand the comparative position of financial and operational period at different period of time. It is again ... Read More

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