FINANCIAL STATEMENTS ANALYSIS

• COMPARITIVE STATEMENTS• COMMONN SIZE STATEMENTS• TREND ANLYSIS• RATIO ANALYSIS• FUND FLOW STETEMENTS• CASH FLOW STATEMENTS

BALANCE SHEET 2006 2007 2006 2007 Rs. Rs. Rs. Rs. • Share Capital Fixed Assets• Equity share capital 1,00,000 2,50,000 Plant & Machinery 1,20,000 2,00,000• Preference share capital 2,00,000 2,00,000 Land & Buildings 80,000 3,50,000• Reserves and Surplus• General Reserve 50,000 80,000 Investments• Securities Premium 10,000 30,000 Investments In Shares 50,000 1,60,000 • Profit and Loss A/c 60,000 1,00,000 Currents Assets • Secured Loans Loans &Advances• 8% Debentures 1,50,000 3,00,000 Cash at Bank 1,30,000 1,70,000• Unsecured Loans Stock in trade 2,70,000 1,30,000• Bank loan 80,000 30,000 Sundry Debtors 40,000 60,000• Current Liabilities & Bills Receivable 80,000 10,000• Provisions Intangibles • Sundry Creditors 1,00,000 50,000 Goodwill 20,000 10,000 • Bills Payable 40,000 20,000 Misc. Expenses • Provision For Taxation 30,000 40,000 Preliminary Expenses 30,000 10,000 ------------------------- ------------------------- 8,20,000 11,00,000 8,20,000 11,00,000 ------------------------- -------------------------

A)WHY IS SHARE CAPITAL A LIABILITY?

B) WHY ASSETS ARE ALWAYS EQUAL TO LIABILITIES?

LIABILITIES SIDE: SOURCES OF FUNDS• A. SHARE CAPITAL• It represents the contribution made by the shareholders. There are

two types of shares.• Equity shares• Preference shares.• • Types of Preference shares

• Cumulative and Non-Cumulative• Redeemable and Irredeemable• Participating and Non-participating

• Terms associated with Share capital• Authorized Capital • Issued Capital• Subscribed Capital• Called up capital • Paid-up capital• Reserve Capital ( normally in banking cos )

B. RESERVES and SURPLUS a) DIVIDEND EQULISATION RESERVE b) EXCHANGE EQULISATION RESERVE c) ASSETS REPLACEMENT RESERVE d) GENERAL RESERVE C. Secured Loans D. Unsecured Loans E. Current Liabilities and Provisions

ASSETS SIDE : APPLICATION OF FUNDS

• Fixed Assets• Currents Assets• Investments• Intangible Assets• Fictitious Assets

INCOME STATEMENT

• 2003 2004 2003 2004• Rs. Rs. Rs. Rs.• To Opening Stock 1,53,000 3,60,000 By Sales 18,00,000 21,60,000 • ,, Purchases 9,00,000 9,90,000 ,, Closing Stock 3,60,000 4,05,000• ,, Wages 1,08,000 1,44,000 ,, Income from • ,, Salaries 75,000 1,15,000 Investments 21,600 27,000• ,, Rent, Rates 63,000 72,000 ,, Dividends• ,, Depreciation 72,000 1,08,000 received 9,000 13,500• ,, Selling Expenses 21,600 21,600• ,, Commission 9,000 12,000• ,, Loss on sale • of plant ---- 14,400• ,, Interest paid 21,600 25,200• ,, Net profit 7,66,800 7,42,500 • ------------------------- ----------------------------- • 21,90,600 26,05,500 21,90,600 26,05,500• ------------------------- -----------------------------

FUND FLOW STATEMENT

• Funds flow statement explains the various sources from which funds are raised and uses to which funds are put.

• It shows the change in assets and liabilities from the end of one period of time to the end of another period of time i.e. in between two Balance sheet dates.

• An analysis of the funds flow statement helps us in answering questions such as

• What is the amount of funds generated from operations?

• How were the fixed assets of an organization financed ?• Whether the liquid position of the organization

increased? Etc…

CASH FLOW STATEMENT (AS 3)

The cash flow statement provides information about historical changes in cash and cash equivalents , classifying the cash

flow from operating , investing and financing activities

BALANCE SHEETParticulars 2002 2003 Particulars 2002 2003

Equity Share Capital

20000 25000 Plant 46000 45000

Debentures 15000 12000 Sundry Debtors

9000 7000

Sundry Creditors

16000 18000 Stock 5000 9000

Profit & Loss A/c

11000 14000 Cash 12000 38000

General Reserve 30000 40000 B/ Receivable 20000 10000

Total 92000 109000 Total 92000 109000

Thank You