Directions for question
M/s Sespi Pvt Ltd, headquartered at Kolkata, started the business of bottling and selling Sparkling Water under the brand name of ‘Sespark Aqua’ from the beginning of 2017-18 with liquid assets worth Rs 40 crores.
The graphs given below give various details of the operations of M/s Sespi Pvt Ltd for the five years from 2017-18 to 2021-22, at the end of every year :
The Total cost of Production in a year = The Total Fixed Cost of Production in the year + The Total Variable Cost of Production in that year
Total Profit in a year = Total Sales Revenue in the year – Total cost of Production in the year
Liquid Assets at the end of a year = Liquid Assets at the beginning of the year + Total Profit in the year
Question
Had M/s Sespi Pvt Ltd sold all the cartons of Sespark Aqua it had produced in a year, in that year itself and no more, what would be the liquid assets of M/s Sespi Pvt Ltd at the end of 2021-22 (in Rs crores rounded to the nearest integer) ?
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Tabulating all the data about M/s Sespi Pvt Ltd given and the added information that M/s Sespi Pvt Ltd had sold all the cartons of Sespark Aqua it had produced in a year, in that year itself and no more, and henceforth calculating, we get :
|
2017-18 |
2018-19 |
2019-20 |
2020-21 |
2021-22 |
Production of Sespark Aqua (in cartons) |
440000/10 = 44000 |
540000/10 = 54000 |
600000/10 = 60000 |
480000/10 = 48000 |
520000/10 = 52000 |
Sales of Sespark Aqua (in cartons) |
44000 |
54000 |
60000 |
48000 |
52000 |
Cumulative Unsold Stock of Sespark Aqua (in cartons) |
NIL |
NIL |
NIL |
NIL |
NIL |
Total Sales Revenue (Rs crores) |
44000*2000 = Rs 8.8 crores |
54000*2200 = Rs 11.88 crores |
60000*2400 = Rs 14.4 crores |
48000*2600 = Rs 12.48 crores |
52000*2200 = Rs 11.44 crores |
Fixed Cost of Production (Rs crores) |
Rs 4 crores |
Rs 3 crores |
Rs 2.5 crores |
Rs 5 crores |
Rs 4 crores |
Variable Cost of Production (Rs crores) |
Rs 3.5 crores |
Rs 5 crores |
Rs 5.5 crores |
Rs 7 crores |
Rs 3.5 crores |
Total Cost of Production (Rs crores) |
4+3.5 = Rs 7.5 crores |
3+5 = Rs 8 crores |
2.5+5.5 = Rs 8 crores |
5+7 = Rs 12 crores |
4+3.5 = Rs 7.5 crores |
Total Yearly Profit (Rs crores) |
8.8 - 7.5 = Rs 1.3 crore profit |
11.88 - 8 = Rs 3.88 crore profit |
14.4 - 8 = Rs 6.4 crore profit |
12.48 - 12 = Rs 0.48 crore profit |
11.44 - 7.5 = Rs 3.94 crore profit |
Liquid Assets of M/s Sespi Pvt Ltd at the end of the year (Rs crores) |
40 + 1.3 = Rs 41.3 crores |
41.3 + 3.88 = Rs 45.18 crores |
45.18 + 6.4 = Rs 51.58 crores |
51.58 + 0.48 = Rs 52.06 crores |
52.06 + 3.94 = Rs 56 crores |
Hence, had M/s Sespi Pvt Ltd sold all the cartons of Sespark Aqua it had produced in a year, in that year itself and no more, the liquid assets of M/s Sespi Pvt Ltd at the end of 2021-22 would be exactly Rs 56 crores