Description

SYLLABUS

(1)     Analysis and Interpretation of Financial Statements: 

• Study of Balance Sheet of Limited Companies, Schedule VI (New). Study of Manufacturing, Trading, Profit and Loss A/c of Limited Companies, Schedule VI (New).
• Vertical Form of Balance Sheet and Profit & Loss A/c – Trend Analysis, Comparative Statement and Common Size.

(2)     Ratio Analysis and Interpretation:

Ratio Analysis and Interpretation (based on Vertical Form of Financial Statements) including Conventional and Functional Classification restricted to:

• Balance Sheet Ratios: Current Ratio, Liquid Ratio, Stock Working Capital Ratio, Proprietory Ratio, Debt Equity Ratio, Capital Gearing Ratio.
• Revenue statement ratios: Gross Profit Ratio, Expenses Ratio, Operating Ratio, Net Profit Ratio, Net Operating Profit Ratio, Stock Turnover Ratio, Debtors Turnover Ratio, Creditors Turnover Ratio.
• Combined Ratios: Return on Capital Employed (including Long Term Borrowings), Return on Proprietors Fund (Shareholder Fund and Preference Capital), Return on Equity Capital, Dividend Payout Ratio, Debt Service Ratio.
• Different Modes of Expressing Ratios: Rate, Ratio, Percentage, Number. Limitations of the use of Ratios.

(3)     Cash Flow Statement:   

Preparation of Cash Flow Statement (Accounting Standard – 3 (Revised)).

(4)     Working Capital:                   

• Working Capital: Concept, Estimation of Requirements in Case of Trading and Manufacturing Organisations.
• Receivables Management: Meaning and Importance, Credit Policy Variables, Methods of Credit Evaluation (Traditional and Numerical – Credit Scoring); Monitoring the Debtors Techniques [DSO, Ageing Schedule].