Cochin University of Science and Techology (CUST) 2006 M.B.A Financial Analysis - Question Paper

MBA.F.2/06.4(b)

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M.B.A. DEGREE (FT) U SEMESTER EXAMINATION, MAY 2006

FINANCIAL ANALYSIS    _y

(Old scheme)

Maximum marks: 50

(Answer ALL questions)

(AH questions cany EQUAL marks)

(5x 10 = 50)

I. A. Explain the need for interpretation and analysis of financial statement.

OR ;

B. Explain the different tools and techniques of financial analysis.

II. A. Explain the ratios you would calculate to analyse the solvency, profitab lity and activity position of a firm.

OR

B. Using the following information, complete the balance sheet give below:

Total debit to net worth    0.5 to 1

Turn over of total assets (based on year end figures)    2

Gross profit    30%

Average collection period (based on 36) day year)    40 days

Inventory turn over (based on cost of goods sold and year-end inventory)    3 times

Acid test ratio    0.75 to 1

Balance Sheet

Liabilities Rs. Assets Rs. Notes and accounts payables Share capital Retained earnings Cash Accounts receivab e Inventory Plant and equipme it 2,00,000 3,00,0&0 Total Total

III. A. Describe the procedure followed for tie preparation of fund flow stat< ment. Explain the utility of fund flow analysis.

OR

B. Balance sheets of AUA on 1.1.2005 and 31.12.2005 were as follows:

Liabilities Rs. Assets Rs. . 2004 . 2005 2004 2005 Share capital 3,00,000 4,00,000 Cash 12,000 14,000 Profit and loss A/c. 1,00,000 1,20,000 Bills receivable 10,000 8,000 Loan from bank 2,00,000 2,50,000 Debtors 28,000 30,000 Creditors 55,000 30,000 Stock 25,000 30,000 Bills payables 30,000 12,000 Long term investtne its 30,000 25,000 Machineiy 80,000 55,000 Land 2,00,000 2,50,000 Building 3,00,000 4,00,000 Total 6,85,000 8,12,000 Total 6,85,000 8,12,000

During the year machine costing Rs. 10,000/- (accumulated depreciatioi Rs.3,000/-) was sold for Rs.5,000/-. The provisions for depreciation against machinery as on 1.1.2)05 was Rs.25,000/- and on 31.12.2005 Rs.40,000/-. Dividend paid during the year amounted to Rs.10,000/-. Prepare cash flow statement.

IV. A. Enumerate the managerial uses of break even analysis.

OR

B. A company has just purchased patent rights to a new milling process for I .s.60,000/-. The patents are to run for a period of 3 years, after which they are to be renewed. The flture earnings after taxes are given below:

Years EAT

1    Rs. 10,000/-

2    Rs.10,000/-

3    Rs. 10,000/-Compute the following:

(i)    Pay back period

(ii)    Average rate of return

(iii)    Internal rate of return

(iv)    Net present value at 15% rate of discount

What are the basic strategies of efficient cash management ? Illustrate with suitable examples the effects of these on the operating cash requirements of a firm.

OR

Justify the need for speedy receivable> collection. In this context biiefly explain concentration banking and lock box system.

at r

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Attachment: cochin-university-of-science-and-techology--cust--2006-m-b-a-37408-1.pdf

Earning:   Approval pending.