Financial Statement Analysis Medical Devices

Question: Give the Brief Assessment of Financial Statement Analysis for Medical Devices. Answer: Income Statement for the year ended 31 December 2013 Particulars Note 2013 ($) Revenue Sales 230,00,000 Other Income 2,00,000 Total Revenue (a) 232,00,000 Expenses - Cost of Goods Used 81,00,000 - Salaries 37,00,000 - License Fee 27,50,000 - Insurance 20,00,000 - Advertisement 20,00,000 - Depreciation 36,00,000 - Preliminary Expenses 2,875 Total Expenses (b) 221,52,875 Earnings Before Interest and Income Tax Expense (a-b) 10,47,125 Finance Cost 3,00,000 Profit Before Income Tax 7,47,125 Income Tax Expense - Profit from operations 7,47,125 Calculation of Cost of Goods Sold Total Inventories Purchased 60,00,000 Total Consumables Purchased 30,00,000 Less: Inventories not yet used 9,00,000 81,00,000 Balance Sheet as at 31 December 2013 Particulars Note 2013 ($) Assets Current Assets Cash and Cash Equivalents 195,97,125 Receivables 96,00,000 Inventories 9,00,000 Prepaid Expenses 2,50,000 Total Current Assets 303,50,000 Non-Current Assets Property, plant and equipment 120,00,000 Trademark 90,00,000 Capital WIP 20,00,000 Total Non-Current Assets 230,00,000 Total Assets 533,50,000 Liabilities Current Liabilities Accounts Payables 30,00,000 Total Current Liabilities 30,00,000 Non-Current Liabilities Interest bearing loans and borrowings 60,00,000 Total Non-current liabilities 60,00,000 Total Liabilities 90,00,000 Net Assets 443,50,000 Share Holders Fund Share Capital (200,00,000 shares of $2 each) 400,00,000 Profit and Loss Account 7,47,125 Revaluation Reserve 36,00,000 Total Fund 443,50,000 Cash Flow Statement for the year ended 31st December 2013 Amount Cash Flow from operating activities Net Profit Before Tax and Extra ordinary items 7,47,125 Adjustments for : Depreciation 36,00,000 Interest Debited 3,00,000 Interest Credited (2,00,000) Operating Profit Before changes in working capital 44,47,125 Adjustments for : Debtors (96,00,000) Creditors 30,00,000 Inventories (9,00,000) Prepaid Expenses (2,50,000) Net Cash from Operating Activities (a) (33,02,875) Cash flow from Investing Activities Purchase of Machine (150,00,000) Investment in Capital WIP (20,00,000) Interest income earned 2,00,000 Net Cash from Investing Activities (b) (168,00,000) Cash Flow from Financing Activities Cash from Issue of Share Capital 340,00,000 Cash from Loan taken 60,00,000 Interest expenses (3,00,000) Net Cash from Financing Activities ( c) 397,00,000 Cash Balance at the end of the year (a+b+c) 195,97,125 Notes: The effect of the agreement with the organiser of International Fair for Medical Devices 2014 has not been considered in the books as there is no liability attached to the given contract. The revaluation in trademark value has been considered net of depreciation for the current year. The depreciation on the upward valuation has been set off from the revaluation account as per the accounting norms. Depreciation has been charged on machine on straight line basis.