N. S. Toor Solutions for Chapter: Financial Statements Analysis, Exercise 1: OBJECTIVE TYPE QUESTIONS

Which of the following is correct?

If a company revaluates its assets, the Net Worth or Tangible Net Worth and Debt Equity Ratio:-

A: Will improve.

B: Will remain unaffected.

C: Net Worth would change but not the Debt Equity Ratio.

D: Debt Equity Ratio would change but not Net Worth.

If a company issues bonus shares, the net worth of the company:

a. Will Increase.

b. Will not change.

c. Will decline.

d. None of these

With the issue of Rights shares, the Debt Equity Ratio:

a. Remains unchanged.

b. Improves.

c. Increases.

d. None of the above

A Joint-stock company's Total Assets are Rs.45 CR which include Intangible assets worth Rs.2 CR. Its liabilities other than share capital and reserves are Rs.40 CR. What is the amount of tangible net worth?

a. 3 CR

b. 7 CR

c. 5 CR

d: 2 CR

A firm has the following financial figures from its balance sheet:

Capital Rs.12 lac, Reserves Rs.4 lac, Unsecured loans Rs.5 lac, Current assets Rs.16 lac, Pre-operative Expenses Rs.2 lac. Its Net Worth would be:

a. Rs. 16 lac

b. Rs. 14 lac

c. Rs. I9 lac

d. Rs. 21 lac

e. Rs. 23 lac

A firm is having paid-up capital of Rs.2 lac, revaluation reserve of Rs.1 lac, current liabilities of Rs.1 lac, pre-paid expenses of Rs.0.20 lac and pre-operative expenses of Rs.0.30 lac. What will be its tangible net worth:-

a. Rs.2.50 lac

b. Rs.2.70 lac

c. Rs.3 lac

d. Rs.3.50 lac

A balance sheet shows total liabilities at Rs. 10 lac, current liabilities at Rs. 5 lac and long term debt Rs. 2 lac and debit balance of profit and loss account at Rs. 1 lac. The tangible net worth is: