BMS (V) – Financial Management
N.B.
1) The paper is divided into 2 sections i.e. section A and B. Answers for both the sections to be written in same answer sheet.
2) Section A has 3 questions which should be compulsorily answered. In Section B out of 5 questions (4-8) any 3 needs to be answered.
3) Show all your workings and state assumptions clearly.
Section A (Compulsory) Marks: 30
1) Discuss wealth maximization and shareholder value maximization as objectives of financial management. (7)
2) Calculate from the following details furnished by Pardeshi Ltd : (16)
1) Current Ratio
2) Liquid Ratio
3) Creditor turnover ratio and average payment period
4) Debtor turnover ratio and age of debtors
5) Stock Turnover Ratio
Rs.
Stock 1, 00,000
Debtors 1, 40,000
Cash 60,000
Creditors 1, 60,000
Bank overdraft 30,000
Outstanding expenses 10,000
Total Purchases 6, 60,000
Cash purchases 20,000
Gross Profit ratio 33 1/3 %
Offer your overall comments on short term financial/solvency/liquidity/credit position of the company.
(3) What are advantages and shortcomings of trend analysis statements? (7)
Section B Marks: 30
4. The following are the balance sheets of Sharang Ltd as on 31st March, 2003 and 31st March 2004. (10)
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The following further for the year ending 31st March 2004 is given:
a) Debentures were redeemed at 5 % premium.
b) Profit on sale of investments is transferred to capital reserve.
c) Stock on 31.3.03 was valued at 10 % below cost but stock on 31.03.04 was valued at cost. It was decided that both opening and closing stock should be valued at cost.
d) Machinery having written down value of Rs.35, 000 was sold for Rs.30, 000. Depreciation on machinery for year ending 31.03.04 was Rs.1,...