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196 Corporate Finance BRILLIANT’S

Illustration 3.1.3
From the following information of X Ltd., Compute the value of its equity shares by earnings
yield method.
X {b{‘Q>oS> H$s {ZåZ{b{IV gyMZm go A{ZªJ ¶rëS> {d{Y Ûmam BgHo$ B{³dQ>r eo¶g© Ho$ ‘yë¶ H$s JUZm H$s{OE&
Balance Sheet of X Ltd. As on 31 December, 2015 / 31 {Xg§~a 2015 H$mo X {b{‘Q>oS> H$s ~¡b|g erQ>

Particulars Note No. Amount
({ddaU) (ZmoQ> g§.) (am{e)
(`)

I. EQUITY AND LIABILITIES / Bp³dQ>r VWm bm¶{~{bQ>rO
(1) Shareholder's Funds / eo¶ahmoëS>a H$m ’§$S>:
(a) Share Capital - 25,000 Equity Shares of ` 10 each fully
paid
eo¶a H¡${nQ>b- ` 10 à˶oH$ Ho$ ’w$br n¡S> 25,000 Bp³dQ>r eo¶g© 2,50,000
(b) Reserves and Surplus- Profit and Loss Account
[aOìg© VWm gaßbg - bm^ VWm hm{Z ImVm 75,000
(2) Share Application Money Pending Allotment:
eo¶a EpßbHo$eZ ‘Zr n|qS>J Abm°Q>‘|Q> –
(3) Current Liabilities / Zm°Z-H$a§Q> bm¶{~{bQ>rO:
(a) Long-term Borrowing-12% Debentures
bm§J-Q>‘© ~m°amoB§½g 12% {S>~|Mg© 2,50,000
(4) Current Liabilities / H$a§Q> bm¶{~{bQ>rO:
(a) Other Current Liabilities / Aݶ H$a§Q> bm¶{~{bQ>rO 2,25,000
TOTAL / Hw$b 8,00,000
II. ASSETS / AgoQ²>g
(1) Non-current Assets / Zm°Z-H$a§Q> AgoQ²>g:
(a) Fixed Assets / {’$³ñS> AgoQ²>g
(i) Tangible Assets / Q>¢{O~b AgoQ²>g 5,00,000

(2) Current Assets / H$a§Q> AgoQ²>g:
(a) Other Current Assets / Aݶ H$a§Q> AgoQ²>g 3,00,000
TOTAL / Hw$b 8,00,000

Year ending 31 December / 31 {Xg§~a H$mo g‘mßV df©

Particular ({ddaU) 2011 (`) 2012 (`) 2013 (`) 2014 (`) 2015 (`)
Sales / goëg 6,00,000 7,00,000 8,00,000 5,00,000 9,00,000