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MMPF 01 Solved Assignment MBA Ignou 2024-25

1. Discuss the Industry Norm Approach and Economic Modelling Approach to the determination
of working capital.
2. The Profit and Loss Account for the year ended 31st March, 2024 and the Balance Sheet as on
that date, for Alpha Ltd. is as follows:
Profit and Loss Account for the year ended 31st March, 2024
Particulars Rs. Lakhs Particulars Rs. Lakhs
Opening stock 1.75 Sales : Credit 12.00
Add: Manufacturing costs 10.75 Cash 3.00
12.50
Less: Closing stock 1.50
Cost of goods sold 11.00
Gross Profit 4.00
15.00 15.00
Administrative expenses 0.35 Gross Profit 4.00
Selling expenses 0.25 Other Income 0.09
Depreciation 0.50
Interest 0.47
Income –tax 1.26
Net Profit 1.26
4.09 4.09
Balance Sheet as on 31st March, 2024
Liabilities Rs. Lakhs Assets Rs. Lakhs
Equity shares of Rs. 10 each 3.50 Plant and machinery 10.00
10% Preference shares 2.00 Less: Depreciation 2.50
Reserves and Surplus 2.00 Net plant and machinery 7.50
Long-term loan (12%) 1.00 Goodwill 1.40
Debentures (14%) 2.50 Stock 1.50
Creditors 0.60 Debtors 1.00
Bills Payable 0.20 Pre-paid expenses 0.25
Accrued expenses 0.20 Marketable securities 0.75
Provision for tax 0.65 Cash 0.25
12.65 12.65
The market price of the shares of Alpha Ltd. on 31st March, 2024 is Rs. 45
(Rs. Lakhs)
Reserves at the beginning 1.465
Net Profit during the year 1.260
2.725
Preference dividends 0.200
Equity dividends 0.525
Reserves at the close of year 2.000
Calculate the following Ratios – (1) Current ratio (2) Quick ratio (3) Debt- equity ratio (4)
Interest coverage (5) Fixed charge coverage (6) Stock turnover (7) Debtors turnover (8) Average
collection period (9) Gross profit margin (10) Net profit margin (11) Operating ratio (12) Return
on capital employed (ROCE) (13) Earnings per share (14) Return on shareholders’ equity (15)
P/E ratio and (16) Earning yield.