(i) Read the extract given below and answer the question that follows:
Unilever Plc (ULVR.L) said on Thursday (Feb. 9, 2023): It would continue to raise prices for its detergents, soaps and packaged food to offset rising input costs, and ease up those hikes in the second half of 2023.
Which one of the following is the reason for the decision taken by Unilever Plc?
(a) To repair the company’s Debt-Equity Ratio so that it can derive the benefits of trading on equity. (b) To repair the company’s Trade Receivables Ratio in order to reduce the risk of bad debts. (c) To repair the company’s gross margin as the industry has been battling with COVID-era supply chain issues and raw material expenses. (d) To repair the company’s Inventory Turnover Ratio as the cost of warehousing had increased due to accumulation of stocks.
(ii) While preparing a Cash Flow Statement, which one of the following will be added to the Net Profit for the year to get Net Profit before Tax?
(a) Sale of Plant & Machinery (b) Interest received on Investments (c) Increase in Trade Payables (d) Increase in General Reserve
(iii) Sunshine Ltd. had a Current Ratio of 0·7:1; its Current Assets being ₹ 2,00,000 and Current Liabilities being ₹ 2,50,000.
What will be the revised Current Ratio of Sunshine Ltd., after it dishonours one of its Bills Payable of ₹ 30,000?
(iv) The books of accounts of Zebra Ltd. showed:
• Change in inventories of raw materials (₹ 70,000). • Opening inventory of ₹ 2,40,000.
(a) You are required to give the formula used by the company to calculate the change in inventories. (b) You have been provided with one component for calculating the change in inventories. Calculate the other component.
(v) Mention whether accrued interest on investments would result in inflow, outflow or no flow of cash.
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