From the following information related to Tanu Ltd, find out : (in Lakh) Net tangible assets 300.00 Operational Revenue 560.00 Employment Cost (including onetime payment of ₹20.00 lakh, not likely to occur in future) 110

CS Professional · Corporate Restructuring, Insolvency, Liquidation & Winding-up · PYQS · December 2021
From the following information related to Tanu Ltd, find out : (in Lakh) Net tangible assets 300.00 Operational Revenue 560.00 Employment Cost (including onetime payment of ₹20.00 lakh, not likely to occur in future) 110.00 Managerial Remunerations (to be increased by ₹10.00 lakh from next year) 40.00 Cost of goods sold 230.00 Finance charges 80.00 Depreciation/Amortization 30.00 Tax provision is to be made @ 25%. Expected rate of return on assets is to be assumed @ 20%. Find out: (c) Super profit

Answer & Explanation:

(c) Computation of Super Profit (i) Future Maintainable Profit Particulars Amount (₹ in lakhs) PBT 70.00 Add: Employment Cost one-time payment not likely to occur in future 20.00 Less: Increase in Managerial Remuneration from next year 10.00 80.00 Less: Taxes @ 25% 20.00 Future Maintainable Profit 60.00 (ii) Super Profit Particulars Amount (₹ in lakhs) Expected return on assets (₹300 lakh * 20%) 60.00 Less: Future Maintainable Profit 60.00 Super Profit NIL

Topics: Valuation

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