The following information pertains to P Limited for the year ended 31st March, 2025 : Particulars Amount / Ratio Sales 3,60,00,000 Rate of Income…

CA Intermediate · Financial Management and Strategic Management · RTP · May 2026
The following information pertains to P Limited for the year ended 31st March, 2025 : Particulars Amount / Ratio Sales 3,60,00,000 Rate of Income Tax 40% Return on Net Worth 30% Share Capital to Reserves Ratio 6 : 4 Current Ratio 2 : 1 Percentage of Net Profit to Sales 8% Inventory Turnover (based on cost of goods sold) 12 Cost of goods sold 1,44,00,000 Sundry Debtors 12,00,000 Sundry Creditors 16,00,000 Interest on 14% debentures 3,36,000 You are required to CALCULATE: (i) Operating Expenses

Suggested Answer and Working Notes:

Operating Expenses ₹ Net Profit = 8% on Sales 28,80,000 = 8% x 3,60,00,000 Add: Income Tax = 40% x 28,80,000/60% 19,20,000 Profit Before tax 48,00,000 Add: Debenture Interest 3,36,000 Profit before interest and tax 51,36,000 Sales 3,60,00,000 Less: Cost of goods sold 1,44,00,000 Profit before interest & tax 51,36,000 1,95,36,000 Operating Expenses 1,64,64,000

Topics: Part-A: Financial Management

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