Master of Commerce (M.Com.) MCom Accountancy SEM III ADVANCE ACCOUNTANCY Advanced Accountancy Course III Advanced Financial Management Question Paper - Mumbai University | munotes

Questions asked in this paper

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1. Q2 Working notes and assumptions should forma part of your answer
2. Q3 Use of simple calculator is allowed
3. Q1 KAS Public Limited Company proposes to use the following accounting ratios to project its. Balance Sheet for next year. You are required to prepare the projected Balance Sheet for the Estimated Sales for next year Rs. 4,50,000 Sales to Net Worth 4 times Total Debt to Net Worth 0.65.1 Current Liabilities to Net Worth Sales to Inventory 5 times Average Collection Period 36 days (year at 360 days) Fixed Assets to Net Worth 75% 15 marks
4. Q1 Current Assets include Cash, Debtors and Stock only
5. Q1 The following is incomplete Balance Sheet of B Ltd. together with additional information. You are required to complete the missing figures in the Balance Sheet using ratio analysis Balance Sheet of B Ltd. as at March, 2019 15 marks
6. Q1 Ratio of long-term loan to net worth
7. Q4 Inventory Turnover :
8. Q5 Gross Profit Margin : 10% on cost of good sold
9. Q7 Credit Sales (Assume 360 days in year) : 50% the following capital structure as on March, 2019 : (15) The equity shares of the company are quoted at Rs.102 and the company is expected to declare a dividend of Rs.9 per share for the year ended March, 2019. Expected growth
   • a) Assuming tax rate applicable to the company at 50%, calculate weighted average cost of capital
   • b) The company wants to raise additional term loan at 12% of Rs. for expansion. The company's assessment is that, it will be able to pay dividend of Rs 10 per share, but market price per share will reduce to Rs.96. The expected growth rate will remain the same. Calculate the revised weighted average cost of capital Kayana Ltd. has Equity Share Capital of Rs.5,00,000 divided into share of Rs.100 each. It (15) wishes to raise further Rs. 3,00,000 for expansion-cum-modernization scheme The company plans the following financing alternatives:
   • a) By issuing equity shares only
   • b) Rs. 1,00,000 by issuing equity shares and through 10% debentures
   • c) By raising term loan only at 10% interest per annum
   • d) Rs.1,00,000 by issuing Equity Shares and Rs. 2,00,000 by issuing 8% Preference You are required to suggest on the basis of EPS, the best alternative giving your comment assuming that the estimated ‘Earnings Before Interest and Taxes (EBIT)’ after expansion is Rs.1,50,000 and corporate rate of tax is 35% following are the operating results of a firm: (15) No. of equity shares 10,000
10. Q2 Earnings before interest and tax
11. Q4 Operating leverage
12. Q5 Financial leverage
13. Q3 A firm sales, variable costs and fixed costs amount to Rs. 75,00,000, Rs. 42,00,000 and Rs. 6,00,000 respectively. It has borrowed Rs. 45,00,000 at 9 percent and its equity capital totals 15 marks
    • a) What is the firm’s ROI?
    • b) What are the operating, financial and combined leverage of the firm?
    • c) If the firm belongs to an industry whose asset turnover is 3, does it have a high or
    • d) Ifthe sales drop to what will be the new EBIT?
14. Q4 _ A) State whether the following statements are True or False. 8 marks
15. Q1 Dividend on preference shares is not fixed
16. Q2 Money has a time value
17. Q3 Current ratio is also known as working capital ratio
18. Q4 All sources of capital have the same cost
19. Q5 The capital structure need not be flexible
20. Q6 Financial leverage is calculated by dividing EBT by EBIT
21. Q7 Investors do not expect regular income
22. Q8 Public Deposit is unsecured loans
    • B) Match the columns. 7
23. Q5 Financial leverage e) Deciding present value of future amount
24. Q6 Share listed on stock exchange f) Proportion between two figures
25. Q4 Write Short Notes. (any three) 15 marks
26. Q1 Functions of Finance
27. Q2 Time Value of Money
28. Q3 Limitation of Ratio Analysis
29. Q5 Forms of Investment

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