THAKUR COLLEGE OF SCIENCE & COMMERCE
BY RAJESHRI SONI
Vertical Statement
FORMAT
Particular
|
Rs.
|
Rs.
|
Rs.
|
Sales
| |||
Cash sales
|
XX
| ||
Credit sales
|
XX
|
XX
| |
(-) Sales Return
|
(XX)
|
XX
| |
Less: Cost of Goods Sold
| |||
Opening Stock
|
XX
| ||
Purchase
|
XX
| ||
(-) Purchase Return
|
(XX)
|
XX
| |
Direct Expenses
|
XX
| ||
Factory Expenses
|
XX
| ||
XX
| |||
(-) Closing stock
|
(XX)
|
(XX)
| |
Gross Profit
|
XX
| ||
Add : Operating Income
| |||
Discount Received
|
XX
| ||
Commission Received
|
XX
| ||
Bad Debt Recovery
|
XX
|
XX
| |
XX
| |||
Less: Operating Expenses
| |||
a) Office and administrative expenses
| |||
Salaries
|
XX
| ||
Insurance
|
XX
| ||
Rent
|
XX
|
XX
| |
b) Selling and Distribution expenses
| |||
Travelling expenses
|
XX
| ||
Advertisement
|
XX
| ||
Carriage outward
|
XX
|
XX
| |
c) Finance expenses
| |||
Bad Debts
|
XX
| ||
Interest paid
|
XX
| ||
Discount allowed
|
XX
|
XX
|
(XX)
|
Net Operating Profit
|
XX
| ||
Add: Non operating Income
| |||
Interest Received
|
XX
| ||
Profit on sale of Investment
|
XX
| ||
Dividend Received
|
XX
|
XX
| |
XX
| |||
Less: Non operating expenses
| |||
Loss by fire /theft
|
XX
| ||
Loss on sale of Investment .Fixed Assets
|
XX
| ||
Donation given
|
XX
|
(XX)
| |
Net Profit Before Tax
|
XX
| ||
Less: Income Tax
|
(XX)
| ||
Net Profit After Tax
|
XX
| ||
Add: Opening Balance
|
XX
| ||
XX
| |||
Les: Appropriations Transfer to Reserve
|
XX
| ||
Dividend
|
XX
|
(XX)
| |
Closing Balances (Retained earning)
|
XX
|
Calculation of Cost of Goods Sold and Gross Profit for Manufacturer
Particular
|
Rs.
|
Rs.
|
Rs.
|
Sales
| |||
Cash Sales
|
XX
| ||
Credit Sales
|
XX
|
XX
| |
(-) Sales Returns
|
(XX)
|
XX
| |
Less: Cost of Goods Sold
| |||
Raw Material Consumed
| |||
Opening stock of Raw Material
|
XX
| ||
(+) Purchases (Raw Material)
|
XX
| ||
(-) Closing stock of Raw Material
|
(XX)
|
XX
| |
Direct Expenses
|
XX
| ||
Factory Expenses
|
XX
| ||
XX
| |||
(+) Opening stock of work in progress
|
XX
| ||
(-) Closing stock of work in progress
|
(XX)
| ||
(-) Sales scrap
|
(XX)
| ||
COST OF PRODUCTION
|
XX
| ||
(+) Opening stock of finished goods
|
XX
| ||
(-) Closing stock of finished goods
|
(XX)
|
(XX)
| |
GROSS PROFIT
|
XX
|
Balance Sheet as on
Particular
|
Rs.
|
Rs.
|
Rs.
|
I) SOURCES OF FUNDS
| |||
A) PROPRITORS FUNDS
| |||
a) Share Capital
| |||
Equity share capital
|
XX
| ||
Preference share capital
|
XX
|
XX
| |
b) Reserves and Surplus
| |||
General Reserve
|
XX
| ||
Reserve Fund
|
XX
| ||
Capital Reserve
|
XX
| ||
Share Premium
|
XX
| ||
Capital Redemption Reserve
|
XX
| ||
Profit and Loss A/c
|
XX
| ||
XX
| |||
(-) Miscellaneous Expenditure
| |||
(to the extent of not written off)
|
(XX)
|
XX
|
XX
|
B) BORROWED FUNDS
| |||
a) Secured Loans
| |||
Debentures
|
XX
| ||
Bank Loan
|
XX
|
XX
| |
b) Unsecured Loans
| |||
Loan from Directors
|
XX
| ||
Public Deposit
|
XX
|
XX
|
XX
|
CAPITAL EMPLOYED
|
(A+B)
|
XX
| |
II) APPLICATION OF FUNDS
| |||
A) FIXED ASSETS
| |||
Land and Building
|
XX
| ||
Plant and Machinery
|
XX
| ||
Vehicles
|
XX
| ||
Furniture
|
XX
| ||
Goodwill
|
XX
| ||
Patents / Patterns
|
XX
|
XX
| |
B) INVESTMENTS
| |||
Long term Investment
|
XX
| ||
Trade Investment
|
XX
|
XX
| |
C) WORKING CAPITAL
| |||
a) Current Assets
| |||
Debtors XX
| |||
(-) R.D.D XX
|
XX
| ||
Stock
|
XX
| ||
Bills Receivable
|
XX
| ||
Short term Investment
|
XX
| ||
Advance Tax
|
XX
| ||
Cash / Bank
|
XX
|
XX
| |
Less: b) Current Liabilities
| |||
Creditors
|
XX
| ||
Bills Payable
|
XX
| ||
Outstanding Expenses
|
XX
| ||
Bank overdraft
|
XX
| ||
Proposed Dividend
|
XX
| ||
Provision for Tax
|
XX
|
(XX)
|
XX
|
CAPITAL EMPLOYED
|
(A+B+C)
|
XX
|
RATIO ANALYSIS
THEORY
NO.
|
NAME
|
FORMULA
|
INDICATES, STD. ETC.
|
1)
|
GROSS PROFIT RATIO
|  |
Profitability, Higher Favourable
|
2)
|
NET PROFIT RATIO
|  |
Profitability, Higher Favourable
|
3)
|
OPERATING RATIO OR OPERATING COST RATIO
|  |
Operating efficiency, Lower favourable, indicates better cost control.
|
4)
|
EXPENSES RATIO
|  |
Effect of ind. Department, lower favourable
|
5)
|
STOCK TURN-OVER RATIO
|  |
Activity Ratio Higher favourable, Replacement of stock in Times.
|
6)
|
STOCK VELOCITY
|  |
Duration of Replacement
|
7)
|
CURRENT RATIO OR WORKING CAPITAL RATIO OR BANKERS RATIO
|  |
Short term solvency, standard 2:1
|
8)
|
QUICK RATIO OR LIQUID RATIO OR ACID TEST RATIO
| 
QA = CA – STOCK - PREPAYMENTS
QL = CL – BANK OVERDRAFT
|
Liquidity OR Immediate Solvency, standard 1:1
|
9)
|
STOCK TO WORKING CAPITAL RATIO
|  |
Liquidity or immediate solvency, Pref. less than 100%.
|
10)
|
PROPRIETORY RATIO
|  |
Long term stability and solvency preferable between 65% to 70%
|
TOTAL ASSETS = FIXED ASSETS + INVESTMENTS + CURRENT ASSETS
| |||
11)
|
DEBT EQUITY RATIO
|  |
Capital structure standard 2:1
|
12)
|
CAPITAL GEARING RATIO
|  |
Capital structure lower favourable
|
13)
|
DEBTORS TURN-OVER RATIO
|  = ___ TIMES
(AV. DEBTORS + AV. BR)
|
Activity Ratio No. of times good sold and money received Higher favourable
|
14)
|
DEBTORS VELOCITY OR AVERAGE COLLECTION PERIOD
|  |
Quickness in coll. Dues from drs. Lower favourable.
|
15)
|
CREDITIORS TURNOVER RATIO
| 
(AV. CREDITOR + AV. BP)
|
Activity Ratio N of times goods pursnokey paid
Favourable.
|
16)
|
CREDITORS VELOCITY DR AV. PAYMENT PERIOD
|  |
Quickaess in payment Lower favourable
|
17)
|
RETURN ON CAPITAL EMP. OR INVESTMENT
|  |
Profitability Higher favourable
|
18)
|
RETURN ON PROP. FUND OR NET WORTH/EQUITY
|  |
Profitability favourable
|
19)
|
RETURN ON EQUITY CAPITAL
|  |
Profitability
Favourable
|
20)
|
EARNING PER SHARE (E.P.S.)
|  |
Profitability Higher favourable
|
21)
|
RETURN ON TOTAL RESOURCES (T.A.)
|  |
Profitability Higher favourable Earned capital used in business
|
22)
|
DEBT SERVICE RATIO OR INTEREST COVERAGE RATIO
|  |
Capital of business to pay interest Higher favourable
|
23)
|
DEBT SERVICE COVERAGE RATIO
|  |
Ability of business to pay interest as well as loan instal Higher favourable.
|
24)
|
PRICE EARNING RATIO
|  |
Valuation Ratio
|
25)
|
DIVIDEND PAYOUT RATIO
|  |
Valuation Ratio
|
26)
|
DIVIDEND YIELD RATIO
|  |
Valuation Ratio
|
