Finance Answers

The following information has been collected from Ms. Divya the head of personnel

department of ART Limited for the year ended 31st March 2020

Number of workers at the beginning of the year 8000

Number of workers at the end of the year 9600

Number of workers left the company during the year 500

Number of workers discharged during the year 100

Number of workers replaced due to leaving and discharge 700

Additional workers employed for expansion during the year 1500

You are required to calculate the labour turnover rate by using separation method,

replacement method and flux method, further discuss each of them briefly

1.     Identify and discuss the audit evidence that currently exists for sales in Flanco

a man deposit 2000 in a bank today at a rate of 4% per annum. after 2 years he deposit another 4,000 in five years, he wil withdraw 6000, how much money does he have on the 6th year

Discuss measurement concept in order to measure the above-mentioned variables and discuss how you should measure all the variables that you have identified. Need proper justification for your proposed measurement technique as well.

Analytical and Application of Concept Based Comprehensive Problem

As the firms may have resource constraint, management is keen on knowing the most critical factors out of the list of factors that are discussed above so that they immediately can start addressing those areas. Hence, discuss how you can respond to this request of the management? 

Exclusive Footwear Ltd experiencing profit declining in recent times...

1. Discuss which type of research approach is appropriate and why? [Hint: Consider formal, qualitative, quantitative, exploratory, explanatory, causal, descriptive researches].

2. In the light of the above research, suggest a list of variables (e.g. IV, DV, or MV), develop conceptual model, and discuss their nature and potential relation to each other with proper justification. Develop relevant hypothesis for the variables.

3. Discuss measurement concept in order to measure the above-mentioned variables and discuss how you should measure all the variables that you have identified. Need proper justification for your proposed measurement technique as well.

4. As the firms may have resource constraint, management is keen on knowing the most critical factors out of the list of factors that are discussed above so that they immediately can start addressing those areas. Hence, discuss how you can respond to this request of the management?

Choose a company listed on a stock exchange and obtain its latest annual report. You can find

the latest annual reports on company website. Focus on the ‘cashflow statement’ part of the

annual report. Based on the information given in the cashflow statement, answer the

following questions:

(a) What does the cashflow from operating activities section tell you about your firm?

(b) What does ‘cash from investing activities’ section indicate about the financial health of

your firm?

(c) Does your company rely on outsiders for its financing? If so, is the company following a

particular capital structure theory when deciding on its financing?

Your answer should not only cover the numerical details of the cashflow statement but should

also provide an in-depth discussion of your observations on various parts of the cashflow

statement.

Cummins India Ltd has the following capital structure, which it considers optimal:

Debt 25%

Preference Shares 10%

Equity shares 65%

Total 100%

Applicable tax rate for the company is 25%. Risk free rate of return is 6%, average equity market investment has expected rate of return of 12%. The company’s beta is 1.10. Following terms would apply to new securities being issued as follows:

1. New preference can be issued at a face value of Rs. 100 per share, dividend and cost of issuance will be Rs. 10 per share and Rs. 2 per share respectively.

2. Debt will bear an interest rate of 9%

Calculate

A) component cost of debt, preference shares and equity shares assuming that the company does not issue any additional equity shares. 

B) WACC.

Cummins India Ltd has the following capital structure, which it considers optimal:

Debt 25%

Preference Shares 10%

Equity shares 65%

Total 100%

Applicable tax rate for the company is 25%. Risk free rate of return is 6%, average equity market investment has expected rate of return of 12%. The company’s beta is 1.10. Following terms would apply to new securities being issued as follows:

1. New preference can be issued at a face value of Rs. 100 per share, dividend and cost of issuance will be Rs. 10 per share and Rs. 2 per share respectively.

2. Debt will bear an interest rate of 9%