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BRILLIANT’S Long Term Financing and Valuation of Goodwill & Shares 205

The following additional information is provided:
{ZåZ{b{IV A{V[a³V gyMZm Xr J¶r h¡…
(a) It is ascertained that all the customers will pay in full;
¶h nVm bJm¶m J¶m h¡ {H$ g^r J«mhH$m| H$mo nyam ^wJVmZ {H$¶m Om¶oJm>&

(b) Profits for the past three years have shown an increase of ` 80,000 annually;
{nN>bo VrZ dfm] Ho$ {bE bm^ Zo dm{f©H$ ê$n go < 80,000 H$s d¥{Õ Xem©¶r h¡&
(c) The prospects for 2016 are equally good for the company;
2016 Ho$ {bE n«m°ñno³Q²>g H§$nZr Ho$ {bE g‘mZ ê$n go AÀN>o h¢&
(d) Buildings are worth ` 3,92,000 and Furniture ` 25,000;
{~pëS>¨½g H$m ‘yë¶ <> 3,92,000 VWm ’$ZuMa H$m < 25000 h¡&
(e) The companies carrying on similar business show a profit earning capacity of 12%, on the
market value of the shares.
g‘mZ ì¶mnma g§Mm{bV H$aZo dmbr H§$nZrO eo¶g© Ho$ ~mOma ‘yë¶ na 12% H$s àm°{’$Q> A{ZªJ j‘Vm àX{e©V

H$aVr h¢& NPP
You are required to ascertain the fair value of each share giving the details of your calcula-
tion. / AmnH$mo AmnZr JUZm H$m {ddaU XoVo hþE à˶oH$ eo¶a Ho$ C{MV ‘yë¶ H$m nVm bJmZm h¡&

Solution:
Computation of Capital Employed

Particulars `

Sundry Assets:
Building 3,92,000
Furniture 25,000
Inventories 17,00,000
Debtors 13,00,000
Bank 2,80,000 36,97,000

Less: Current Liabilities
Sundry Creditors 1,92,000
(Income-tax payable (note 1) 2,60,000 4,52,000
Closing Trading Tangible Capital Employed 32,45,000
Less: ½ of adjusted current year's profit after tax (Note 2)
[1/2 × 50% × `(5,20,000 -76,000)] 1,11,000

Trading Tangible Capital Employed 31,34,000