Profit & Loss Account for the ye

A.
B.
C = ( A-B)
AA.
D
E = (C+AA-D)
F
G = (E-F)
H
I = (G-H)
J
K= (I-J)
L
M = (K-L)

Exercise No. 1
Compute Gross Profit: Profit Before Depreciation, Interest and Tax(PBDIT); Profit
Before Tax(PBT); Profit After Tax(PAT) and Retained Earnings (RE).
Particulars
Product Sales
Cost of Production
Miscellaneous Income
Selling & Distbn.
Expenses
Administrative expenses
Depreciation
Interest expenses
Dividend
Tax at 35 %

Profit & Loss Account for the year ended 3

Particulars
Operating Sales/Revenue/Income/Top line/Turnover

Cost of goods sold(Direct Material, Labour and Factory Overh

Gross Profit
Non-operational income / Other Income
Administrative / Selling & Distribution

Expenses

Profit before Depreciation, Interest and Taxes (PBDIT)

Depreciation
Profit before interest and taxes (PBIT)
Interest
Profit before tax
Tax
Profit after tax
Dividends
Retained earnings

No. 1

oss Profit: Profit Before Depreciation, Interest and Tax(PBDIT); Profit Before interest and t
BT); Profit After Tax(PAT) and Retained Earnings (RE).
Amount (Rs.)
100000
65000
10000
1000
15000
5000
1000
1000

2012

Amount
( Rs. In
Lakhs)
2000
1000
1000
200
100
1100
20
1080
10
1070
380
690
20
670

Profit & Loss Account for the ye

A.
B.
C = ( A-B)
AA.
D
E = (C+AA-D)
F
G = (E-F)
H
I = (G-H)
J
K= (I-J)
L
M = (K-L)
Exercise No. 1

Given the following data, compute Gross Profit: Profit Before Depreciation, Intere
interest and tax(PBIT); Profit Before Tax(PBT); Profit After Tax(PAT) and Retained
Particulars

Product Sales
Cost of Production
Miscellaneous Income
Selling & Distbn.
Expenses
Administrative expenses
Depreciation
Interest expenses
Dividend
Tax at 35 %

Profit & Loss Account for the year ended 3

Particulars
Operating Sales/Revenue/Income/Top line/Turnover

Cost of goods sold(Direct Material, Labour and Factory Overh

Gross Profit
Non-operational income / Other Income
Administrative / Selling & Distribution

Expenses

Profit before Depreciation, Interest and Taxes (PBDIT)

Depreciation
Profit before interest and taxes (PBIT)
Interest
Profit before tax
Tax
Profit after tax
Dividends
Retained earnings
No. 1

llowing data, compute Gross Profit: Profit Before Depreciation, Interest and Tax(PBDIT); P
tax(PBIT); Profit Before Tax(PBT); Profit After Tax(PAT) and Retained Earnings (RE).
Amount (Rs.)

100000
65000
10000
1000
15000
5000
1000
1000

2012
Amount (Rs.)
100000
65000
35000
10000
16000
29000
5000
24000
1000
23000
8050
14950
1000

450

13950

1430
1045

Solution :

Profit & Loss Account for the yea

Exercise No. 1

Given the following data, compute Gross Profit: Profit Before Depreciation, Intere
interest and tax(PBIT); Profit Before Tax(PBT); Profit After Tax(PAT) and Retained
Particulars
Product Sales
Cost of Production

Miscellaneous Income
Selling & Distbn.
Expenses
Administrative expenses
Depreciation
Interest expenses
Dividend
Tax at 35 %

on :

Profit & Loss Account for the year ended 31

Particulars

No. 1

llowing data, compute Gross Profit: Profit Before Depreciation, Interest and Tax(PBDIT); P
tax(PBIT); Profit Before Tax(PBT); Profit After Tax(PAT) and Retained Earnings (RE).
Amount (Rs.)
100000
65000
10000
1000
15000
5000
1000
1000

12
Amount (Rs.)

Balance Sheet as at 31/03

Liabilities

Amount
(Rs. In Lakhs)

Capital
Share Capital

100

Equity

70

Preference

30

Reserves and Surplus

1170

Opening Balance

500

Retained Earnings

670

Loans

130

Secured Loans

80

Unsecured Loans

50

Current
Liabilities

30

Creditors

10

Provisions

20

Total

1430

et as at 31/03/2012
Assets

Amount
(Rs. In Lakhs)

Fixed Assets

335

Land & Buildings

200

Plant & Machinery

100

Vehicles
Computers

30
5

Investments

50

Current Assets

1045

Cash

480

Inventories

435

Receivables

120

Loans and Advances

Total

10

1430

Exercise No. 2
Prepare Projected Cash Flow Statement of Aditya Enterprises

The Balance Sheet of Aditya Enterprises at the end of year n (the year which is just ove
Liabilities

Share Capital

Amount
(Rs. In Lakhs)

100

Reserves and Surplus

20

Secured Loans

80

Unsecured Loans

50

Current Liabilities

90

Provisions

20

Total

360

The projected income statement and the distribution of earnings for year n+1 is given be
Particulars

Amount
(Rs. In Lakhs)

Sales

400

Cost of goods sold

300

Depreciation

20

Profit before interest and

taxes (PBIT)

80

Interest

20

Profit before tax

60

Tax

30

Profit after tax

30

Dividends

10

Retained earnings

20

Other information : During n+1, the firm plans to

Particulars
Raise secured term loan
Repay a previous term loan
to the extent of
Increase unsecured loans
by
Current liabilities and
provisions remain
unchanged

Amount
(Rs. In Lakhs)
20
5
10

Acquire fixed assets worth

30

Increase its inventories by

10

Receivables are expected

to increase by

15

Other Assets would remain

unchanged
Pay equity dividend

10

Enterprises

end of year n (the year which is just over) is as follows:

Amount
(Rs. In Lakhs)

Assets

Fixed Assets

180

Investments

Current Assets

180
Cash

20

Receivables

80

Inventories

80

Total

tion of earnings for year n+1 is given below:

360

Projected Cash Flow Statement of Aditya En

A) Sources of Funds
Profit Before Interest and tax
Depreciation
Increase in secured loans
Increase in unsecured loans
Total (A)
B) Disposition / Application of Funds
Capital Expenditure
Increase in Working Capital
Repayment of Term Loan
Interest

Taxation
Dividends
Total (B)
Opening balance of cash in hand and at Bank
Net Surplus / defecit (A-B)
Closing balance of cash in hand and at Bank

The Balance Sheet of Aditya Enterprises at the end of year n+1 is as follows:

Liabilities

Share Capital
Reserves and Surplus
Secured Loans
Unsecured Loans
Current Liabilities
Provisions

Total

Aditya Enterprises
Amount
(Rs. In Lakhs)

80
20
20
10

130

30
25
5
20

30
10

120
20
10

30

lows:
Amount (Rs. In
Lakhs)

Assets

100 Fixed Assets

40 Investments
95 Current Assets
60
Cash
90
Receivables
20
Inventories

405

Total

30
95
90

Amou
nt
(Rs. In
Lakhs
)

190
0
215

405

Exercise No. 3

The Balance Sheet of Swaraj Limited at the end of year n (the year which is just over) i
Liabilities

Amount

Share Capital
Reserves and Surplus
Secured Loans
Unsecured Loans
Current Liabilities
Provisions
Total

5
4
4
3
6
1
23

The projected income statement and the distribution of earnings for year n+1 is given be
Particulars

Amount
(Rs. in
millions

Sales

25

Cost of goods sold

19

Depreciation

1.5

Profit before interest and

taxes (PBIT)

4.5

Interest

1.2

Profit before tax

3.3

Tax

1.8

Profit after tax

1.5

Dividends

1.0

Retained earnings

0.50

Other information : During n+1, the firm plans to

Particulars

Amount
(Rs. In
millions)

Raise a secured term loan

Repay a previous term loan
to the extent of

1
0.5

Current liabilities and provisions would

increase by 5 per cent
Acquire fixed assets worth

1.5

Raise its inventories by

0.5

Receivables are expected to increase by 5

per cent

Unsecured loan remains

unchanged
Given the above information, prepare the
following:
i) Projected cash flow statement
ii) Projected balance sheet

of year n (the year which is just over) is as follows:

(Rs. In millions)
Amount
(Rs. In Lakhs)

Assets

Fixed Assets
Investments
Current Assets
Cash
Receivables
Inventories
Total

tion of earnings for year n+1 is given below:

11
0.5
11.5
1
4
6.5
23

0.5

0.2

Projected Cash Flow Statement of Swaraj L

A) Sources of Funds
Profit Before Interest and tax
Depreciation
Increase in secured loans
Increase in unsecured loans
Increase in Liabilities for deferred payment
Total (A)
B) Disposition / Application of Funds
Capital Expenditure
Increase in Working Capital
Repayment of Term Loan
Interest
Taxation

Dividends
Total (B)
Opening balance of cash in hand and at Bank
Net Surplus / defecit (A-B)
Closing balance of cash in hand and at Bank

The Balance Sheet of Swaraj Limited at the end of year n+1 is as follows:
Liabilities

Share Capital
Reserves and Surplus
Secured Loans
Unsecured Loans
Current Liabilities
Provisions

Total

f Swaraj Limited
Amount
(Rs. In millions)

4.5
1.5
1
0
0.35

7.35

1.5
0.7
0.5
1.2
1.8

6.7
1
0.65

1.65

ws:
Amount
(Rs. In millions)

Assets

5 Fixed Assets
4.50 Investments
4.5 Current Assets
3

Cash

1.65

6.3

Receivables

4.2

1.05

Inventories

24.35

Total

Amount
(Rs. In
millions)

11
0.5
12.85

24.35

Net Present Value

Compute NPV @ 20 %, 25 % and 30 % profit margin. The discount rate is 10 %. The delivery
Year

No. of Aircraft

12

14

Solution:
Selling Price

Rs.

42.01

Computation of Cash Inflow

Year 1
Profit margin / No. of Aircraft

Year 2

12

14

20%

100.82

117.63

25%

126.03

147.04

30%

151.24

176.44

Computation of NPV

Profit Margin 20 %
Discount Rate - 10 %

Year 0

Cash
Outflow/
Inflow
-659.46

Present
value at
10 %
-659.46

Year 1

100.82

91.66

Year 2

117.63

97.21

Year 3

168.04

126.25

Year 4

210.05

143.47

Year 5

294.07

182.59

890.61

641.18

Total

Net Present Value

Remarks

-18.28
Negative NPV

Profit Margin 20 %
Discount Rate - 15 %

Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Total

Cash
Present
Outflow/
value at
Inflow
15 %
-659.46
-659.46
100.82
117.63
168.04
210.05
294.07
890.61

87.67
88.94
110.49
120.10
146.20
553.41

Net Present Value

Remarks

-106.05
Negative NPV

10 %. The delivery pattern is as under:

3

20

25

35
106

Crores

Year 3

Year 4

Year 5

20

25

35

168.04

210.05

294.07

890.61

210.05

262.56

367.59

1113.27

252.06

315.08

441.11

1335.92

Profit Margin 25 % Profit Margin 30 %

Cash
Present
Cash
Present
Outflow/ value at Outflow/ value at
Inflow
10 %
Inflow
10 %
-659.46

-659.46

-659.46

-659.46

Discount Factor

126.03

114.57

151.24

137.49

0.909

147.04

121.52

176.44

145.82

0.826

210.05

157.81

252.06

189.38

0.751

262.56

179.33

315.08

215.20

0.683

367.59

228.24

441.11

273.89

0.621

801.48 1335.92

961.78

1113.27

142.02
Positive NPV

302.32
Positive NPV

Profit Margin 25 % Profit Margin 30 %

Cash
Present
Cash
Present
Outflow/ value at Outflow/ value at
Inflow
15 %
Inflow
15 %
-659.46
-659.46
-659.46
-659.46
126.03
147.04
210.05
262.56
367.59
1113.27

109.59
151.24
111.18
176.44
138.11
252.06
150.12
315.08
182.76
441.11
691.76 1335.92

131.51
133.42
165.73
180.15
219.31
830.11

0.870
0.756
0.658
0.572
0.497

32.30
Positive NPV

170.65
Positive NPV

91.66

114.57

97.21

121.52

126.25

157.81

143.47

179.33

182.59

228.24

641.18

801.48

961.78

87.67

109.59

131.51

88.94

111.18

133.42

110.49

138.11

165.73

120.10

150.12

180.15

146.20

182.76

219.31

553.41

691.76

830.11

137.49
145.82
189.38
215.20
273.89

Given Data
Cash Outflow : Rs. 659.46 Crores
Selling Price

Rs.

42.01 Crores

Compute NPV @ 20 %, 25 % and 30 % profit margin. The discount rate is 10 %. The delivery pattern is as
under:
Year
1
2
3
4
No. of Aircraft

12

14

20

25

Solution:
Computation of Cash Inflow

Rs. In Crore
Year 1
Profit margin / No. of Aircraft

12

Year 2

Year 3

Year 4

14

20

25

20%

100.82

117.63

168.04

210.05

25%

126.03

147.04

210.05

262.56

30%

Computation of NPV

Profit Margin 20 %
Discount Rate - 10 %

Year 0

Year 1
Year 2
Year 3
Year 4
Year 5
Total

Cash
Outflow/
Inflow

Profit Margin 25 %

Present
Cash
Present
value at Outflow/ value at
10 %
Inflow
10 %

Net Present Value

Remarks

Profit Margin 20 %
Discount Rate - 15 %

Year 0

Year 1
Year 2
Year 3
Year 4
Year 5

Cash
Outflow/
Inflow

Profit Margin 25 %

Present
Cash
Present
value at Outflow/ value at
15 %
Inflow
15 %

Total
Net Present Value
Remarks

ivery pattern is as
5
35

Rs. In Crores
Year 5
35
294.07

890.61

367.59

1113.27

Profit Margin 30 %
Cash
Present
Outflow/ value at
Inflow
10 %

Discount Factor

0.909

0.00

0.00

0.826

0.00

0.00

0.751

0.00

0.00

0.683

0.00

0.00

0.621

0.00

0.00

0.00

0.00

0.00
0.00
0.00
0.00
0.00

0.00

Profit Margin 30 %
Cash
Present
Outflow/ value at
Inflow
15 %

0.870

0.00

0.00

0.756

0.00

0.00

0.658

0.00

0.00

0.572

0.00

0.00

0.497

0.00

0.00

0.00
0.00
0.00
0.00
0.00

0.00

0.00

0.00