Comprehension

Answer the questions based on the following piecharts.

Question: 1

The operating profit in 1991-92 increased over that in 1990-91 by:

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Always check whether to round percentages in such problems; examiners may expect nearest integer or exact decimal.
Updated On: Aug 6, 2025
  • 23%
  • 22%
  • 25%
  • 24%
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The Correct Option is C

Solution and Explanation

Operating profit in 1991-92 = Rs. 160 lakh
Operating profit in 1990-91 = Rs. 130 lakh
\[ \text{% Increase} = \frac{160 - 130}{130} \times 100 = \frac{30}{130} \times 100 \approx 23.08% \] Rounding to the nearest option given, it matches most closely to 23%, but if precise rounding is avoided, actual increase is ~23.1%. However, considering typical exam rounding to nearest whole number, this should be 23%. If the question considers exact values, answer: 23%.
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Question: 2

The interest burden in 1991-92 was higher than that in 1990-91 by:

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When given percentages on pie charts, convert them to absolute values before making comparisons.
Updated On: Aug 6, 2025
  • 50%
  • Rs. 25 lakh
  • 90%
  • Rs. 41 lakh
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The Correct Option is B

Solution and Explanation

Interest in 1991-92 = 40% of 160 lakh = 64 lakh
Interest in 1990-91 = 30% of 130 lakh = 39 lakh
Difference = 64 - 39 = 25 lakh.
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Question: 3

If on average, 20% rate of interest was charged on borrowed funds, then the total borrowed funds used by this company in the given two years amounted to:

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Divide interest amount by interest rate to get principal (borrowed funds) when rate is known.
Updated On: Aug 6, 2025
  • Rs. 221 lakh
  • Rs. 195 lakh
  • Rs. 368 lakh
  • Rs. 515 lakh
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The Correct Option is C

Solution and Explanation

From Q162: Borrowed funds in 1991-92 = Interest / 0.20 = 64 / 0.20 = 320 lakh
Borrowed funds in 1990-91 = 39 / 0.20 = 195 lakh
Total borrowed funds over two years = 320 + 195 = 515 lakh.
However, if question asks “total borrowed funds used by the company” meaning average at a time, careful reading is neede(d) Here it sums across years: Rs. 515 lakh. Thus answer = Rs. 515 lakh.
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Question: 4

The retained profit in 1991-92, as compared to that in 1990-91 was:

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Percentage point change differs from percentage change; read the wording carefully.
Updated On: Aug 6, 2025
  • higher by 2.5%
  • higher by 1.5%
  • lower by 2.5%
  • lower by 1.5%
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The Correct Option is C

Solution and Explanation

Retained profit percentage in 1991-92 = 20% of operating profit
Retained profit percentage in 1990-91 = 25% of operating profit
Difference = 20% - 25% = -5 percentage points (i.e., 5% of OP). Relative change = decrease by \(\frac{5}{200} \times 100\) = 2.5% when compared proportionally.
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Question: 5

The equity base of these companies remained unchange(d) Then the total dividend earning by the shareholders in 1991-92 is:

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In pie chart problems, ensure whether question refers to “percentage of profit” or “percentage of equity” to avoid misinterpretation.
Updated On: Aug 6, 2025
  • Rs. 104 lakh
  • Rs. 9 lakh
  • Rs. 12.8 lakh
  • Rs. 15.6 lakh
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The Correct Option is D

Solution and Explanation

Dividend in 1991-92 = 8% of OP = 0.08 × 160 lakh = 12.8 lakh. But if equity base unchanged and dividend is per share, the total dividend earnings = actual dividend amount = Rs. 12.8 lakh.
However, if “earnings by shareholders” means cumulative equity return including retained profit allocated, it might change. Here, given only dividend slice, answer = Rs. 12.8 lakh.
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