1.8 FINANCIAL AND MANAGEMENT ACCOUNTING
1. How a financial statement helps the investors and creditors for a service based
company and manufacturing company. Give your views by taking any of the one
company of your choice on both the sector.
2. Identify the financial ratio on which type of Managerial of retail stores adopted.
Further analyse the various importance of those ratio and give your views. How
it will help the retail store.
3. Discuss various applications of the Break Even Chart. Enumerate the various
criticism usually levelled against Break Even Charts. Differentiate how this
Break Even chart helps the service sector and manufacturing sector.
4. From the following particulars, prepare the Balance Sheet of Sri Mohan Ram.
Current Ratio -- 2
Working Capital -- Rs. 4,00,000
Capital block to Current Assets -- 3:2
Fixed Asset to turnover -- 1:3
Sales Cash / Credit -- 1:2
Stock Velocity -- 2 months
Creditor’s velocity -- 2 months
Debtor’s velocity -- 3 months
Capital block Net Profit -- 10% of turnover
Debentures / Share Capital -- 1:2
Gras Profit Ratio -- 25% (to Sales)
Reserves -- 2.5% of turnover