Thursday, February 17, 2011

Fin621 Final Term Current Paper (Feb 2011)

Fin621 Final Term Current Paper (Feb 2011)

90% mcq were new. subjective portion was as follows:-

Q1. What info is contained in Balance sheet which is of interest to short term n long term creditors? 3marks.

Q2. What is vertical & common size analysis? What is its usefulness? 3marks

Q3. Differentiate between operating cycle & accounting cycle of a company. 3marks

Q4. ( Marks: 5 )

Following is the balance sheet of the ABC Company.

ABC Corporation

Balance Sheet

Mar. 31, 1991

Assets

Cash Rs. 12,500

Notes receivables 104,000

Accounts receivables (net) 68,500

Inventories at cost 50,000

Plan & equipment (net of depreciation) 646,000

Total assets Rs. 881,000

Liabilities & Stockholder's equity

Accounts payable Rs. 72,000

Notes payable 54,500

Accrued liabilities 6,000

Common stock (60,000 shares, Rs.

10par)

600,000

Retained earnings 148,500

Total liabilities and owner's equity Rs. 881,000

Requirement:

Calculate the current ratio and quick ratio for both years. (2.5+ 2.5)

Q5. Data given. Had to calculate quick n current ratio. Industry average was given for both ratios & we had to comment on company's financial position. 5marks

Q6. Using the following information, compute the price earning ratio to the nearest tenth.

Income Rs. 130,000

Beginning shares outstanding 250,000

Ending shares outstanding 270,000

Current price per share Rs. 7.50

Dividend per share Rs. 1.20
..........................

Another Paper:

only 8,9 mcq'z were new rest were from past pprz n quizzez

A firm's balance sheet consists of cash, marketable securities, receivables and inventory among other assets. Which of the following is the least valuable ratio for the firm? Give reasons. 

0. Cash ratio

1. Quick ratio

2. Current ratio 5

State and explain any five generally acceptable accounting principles. 5

Assume that company had total assets turnover of 1.5, net profit margin of 6% and assets of Rs. 5000,000 and liabilities of Rs. 3000,000.

Requirement: Calculate net sales and net income. 5

What is the effect of financial leverage on the earnings of the firm? When leverage is advantageous? 3

Debt is not always a bad thing. Explain 3

How horizontal analysis minimizes the problems of vertical analysis? 3

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