Summary of a Balance sheet of XYZ Company Current Liabilities (in Crores) Cash Credit - 3200 Trad

Summary of a Balance sheet of XYZ Company Current Liabilities (in Crores) Cash Credit - 3200 Trade Creditors - 9500 Other Current Liabilities - 2000 Total Current Liabilities - 14700 Current Assets (in Crores) Cash - 5000 Inventory - 14000 Debtors - 4200 Other Current Assets - 2000 Total Current Assets - 25200 Find out 1. Current Ratio a. 1.61 b. 1.71 c. 1.81 d. 1.91 Ans - b Current Ratio = CA/CL = 25200/14700 = 1.71 2. Acid-Test Ratio a. 0.71 b. 0.76 c. 0.81 d. 0.86 Ans - b Acid-Test Ratio = Quick Assets/CL = (CA-Inv)/CL = (25200-14000)/14700 = 11200/14700 = 0.76 3. Net Working Capital a. 10000 b. 10500 c. 11000 d. 11500 Ans - b Net Working Capital = CA - CL = 25200 - 14700 = 10500 4. Working Capital Gap a. 12700 b. 13200 c. 13700 d. 14200 Ans - c Working Capital Gap = CA - (CL - BB) = 25200 - (14700 - 3200(CC)) = 25200 - 11500 = 13700 5. MPBF as per Tandon Committee - Method-I a. 10275 b. 10775 c. 13700 d. 17300 Ans - a MPBF as per Tandon Committee - Method-I = WCG - 25% of WCG = 13700 - 25% of 13700 = 13700 - 3425 = 10275 6. MPBF as per Tandon Committee - Method-II a. 6200 b. 6700 c. 7200 d. 7400 Ans - d MPBF as per Tandon Committee - Method-II = WCG - 25% of CA = 13700 - 25% of 25200 = 13700 - 6300 = 7400 7. Current Ratio as per Tandon Committee - Method-I a. 1.01 b. 1.06 c. 1.11 d. 1.16 Ans - d Current Ratio as per Tandon Committee - Method-I = CA / (MPBF + Trade Creditors + Other CL) = 25200 / (10275+9500+2000) = 25200 / 21725 = 1.16 8. Current Ratio as per Tandon Committee - Method-II a. 1.07 b. 1.09 c. 1.23 d. 1.33 Ans - d Current Ratio as per Tandon Committee - Method-II = CA / (MPBF + Trade Creditors + Other CL) = 25200 / (7400+9500+2000) = 25200 / 18900 = 1.33 9. Borrowing by the way of Cash Credit when compared with Tandon Committee - Method-I a. 7025 b. 7075 c. 7125 d. 7175 Ans - b Borrowing by the way of Cash Credit = 3200 MPBF as per Tandon Committee - Method-I = 10275 So, Borrowing by the way of Cash Credit is short by (10275 - 3200) = 7075 Crores 10. Borrowing by the way of Cash Credit when compared with Tandon Committee - Method-II a. 4200 b. 4600 c. 5000 d. 5400 Ans - a Borrowing by the way of Cash Credit = 3200 MPBF as per Tandon Committee - Method-II = 7400 So, Borrowing by the way of Cash Credit is short by (7400 - 3200) = 4200 Crores .............................................