Answer to Question #176239 in Financial Math for roma vaz

Question

. Following information is available in respect of A Ltd Particulars As on 31.3.2019 (Rupees. In Lacs) As on 31.3.2020 (Rupees. In Lacs) Investment in Financial Assets - 100 Equity Share Capital 150 160 Long term Loans taken 100 200 Dividend paid - 26 Dividend received - 10 Interest received - 15 a. Prepare the cash flow from financing activities from the above information and give reasons for each element whether these elements belongs to financing activities or not 

b. Calculate the relationship between the debt and equity for the year 2019 and 2020, and comment 

Answer 1

Operating activities on 31.03.2020

Dividend received = 10

interest paid = (15)

cash used in operating activities = 25

investing activities on 31.03.2020

investment on financial assets = (100)

cash used in investing activities

Financing activities on 31.03.2019

long term long taken = 150

dividend paid = (100)

cash used in financing activities = 250

Financing activities on 31.03.2020

long term long taken = 160

dividend paid = (200)

cash used in financing activities = 360

debt = 415

equity = 320

$debt-equity ratio= \frac{debt}{equity}= \frac{450}{320}= 1.296875$

1.296875 shows the financial average of the firm. The firm is operating on more debts than equity