4. Balance Sheet Structure Short Term Loans Inventory: WIP, Finished Goods Accounts Payable Cash, Accounts Receivable Current Liabilities Current Assets Equity, Term Loans, Debentures Land, Buildings, Vehicles, Equipment Long Term Liabilities Fixed Assets Liabilities Assets

5. Financial Management Decisions Operating policy decisions Capital budgeting decisions Capital structure decisions Short Term Loans Inventory: WIP, Finished Goods Accounts Payable Cash, Accounts Receivable, Marketable Securities Current Liabilities Current Assets Equity, Term Loans, Debentures Land, Buildings, Vehicles, Equipment Long Term Liabilities Fixed Assets Liabilities Assets

11. A Typical Manufacturing Company Starts Operation Two promoters deposit Rs 5 lakhs in the company account as equity XYZ Private Limited Balance Sheet at April 1, 2001 5,00,000 Total 5,00,000 Total 5,00,000 Equity 5,00,000 Cash Liabilities Assets

12. A lathe is bought on cash basis Owner pays Rs 3 lakhs from the bank acount 3,00,000 Plant 5,00,000 Total 5,00,000 Total 5,00,000 Equity 2,00,000 Cash Liabilities Assets

13. Raw material worth Rs 80,000 bought on a 60 day credit basis No payment is done so cash position does not change 80,000 Inventory 80,000 Account Payable 3,00,000 Plant 5,80,000 Total 5,80,000 Total 5,00,000 Equity 2,00,000 Cash Liabilities Assets

14. Raw material worth Rs 40,000 processed and sold for Rs 50,000 with a 30 day credit No payment is done so cash position does not change, but inventory is reduced 50,000 Accounts Receivable 10,000 Retained Earnings 40,000 Inventory 80,000 Accounts Payable 3,00,000 Plant 5,90,000 Total 5,90,000 Total 5,00,000 Equity 2,00,000 Cash Liabilities Assets

15. Customer pays up after 20 days Payment deposited in bank so cash position changes 00,000 Accounts Receivable 10,000 Retained Earnings 40,000 Inventory 80,000 Accounts Payable 3,00,000 Plant 5,90,000 Total 5,90,000 Total 5,00,000 Equity 2,50,000 Cash Liabilities Assets

16. Supplier credit period is over and raw material is paid for after 60 days Payment done from bank so cash balance reduces 00,000 Accounts Receivable 10,000 Retained Earnings 40,000 Inventory 00,000 Accounts Payable 3,00,000 Plant 5,10,000 Total 5,10,000 Total 5,00,000 Equity 1,70,000 Cash Liabilities Assets

17. A new promoter buys 10,000 shares of Rs 10 face value at a premium of Rs 20 Payment done to bank so cash balance increases 2,00,000 Share Premium a/c 00,000 Accounts Receivable 10,000 Retained Earnings 40,000 Inventory 00,000 Accounts Payable 3,00,000 Plant 8,10,000 Total 8,10,000 Total 6,00,000 Equity 4,70,000 Cash Liabilities Assets

18. Profit & Loss Account (Income Statement) 30 % 1,50,000 PBITD 5 % 25,000 Interest + Tax + Depreciation 25 % 1,25,000 Net Profit 30 % 1,50,000 Operating Expenses 60 % 3,00,000 Gross Profit 40 % 2,00,000 Cost of Goods Sold 100 % 5,00,000 Total Revenues 1,00,000 Other Revenues 4,00,000 Sales Revenues

27. Balance Sheet of Three IT Companies at 31.03.2001 (in Rs Cr) (http://www.indiainfoline.com) 151.0 446.0 385.0 Cash & bank balance 475.0 600.0 430.0 Account receivable 288.0 902.0 600.0 Fixed Assets 985.0 2010.0 1383.0 Capital employed 172.0 45.0 0.0 Debt 813.0 1965.0 1383.0 Net Worth 670.0 1300.0 1030.0 Retained earnings 87.0 592.0 320.0 Share premium 56.0 47.0 33.0 Equity Satyam Wipro Infosys Company

28. Profit and Loss Statement of Three IT Companies for 12 Months Ending 31.03.2001 (in Rs Cr) Prior year adjusted 668.0 629.0 PAT 466.0 870.0 808.0 PBIDT 776.0 2252.0 1151.0 Total cost of sales 486.0 422.0 718.0 Employee cost 128.0 633.0 190.0 Comm + traveling cost 128.0 380.0 238.0 Cost of material 1242.0 3123.0 1959.0 Total income 22.0 69.0 59.0 Other income 1220.0 3054.0 1900.0 Sales Satyam Wipro Infosys Company