Caselets

Introduction

The data present in the caselets do not have any defined structure. One needs to read and understand what are the variables involved in order to crack the questions. The problem are designed to test out the students ability to shift out essential inputs leaving the unwanted data in a limited period of time.

Strategy for CAT LRDI

Example 1.1

Direction for questions 1- 6; refer to the caselet given below to answer questions that follow.

M.S. Dhoni has recently acquired four banks viz. Bank of Hololullu (BOH), Bank of Mayapur (BOM), Bank of Khandala (BOK), and Bank of Ajanta (BOA). He noticed that the sales of BOA are half that of BOH whereas the profits of BOA are double that of BOH. The expenses of BOK are 6 crores less than of BOA whereas the profit of BOM is Rs. 2 crores less than that of BOK. The expenses of BOH are three times that of BOA. It is also known that the sales of BOK are Rs.30 crores or ¼ that of BOM. All the figures are for 2002-03.

Note: sales – expenses = profit. An insider further informed Mr. Dhoni that the sales of BOA are Rs.50 crores and the expenses of BOH are 90% of its own sales.

1. The total sales of all the four companies is (Rs. Crores)

1. 300
2. 250
3. 325
4. 320

2. The expenses of BOH exceed that of BOK by (Rs. Crores)

1. 60
2. 70
3. 66
4. 62

3. Which company had the maximum profit?

1. BOH
2. BOM
3. BOK
4. BOA

4. The expenses of BOM exceed the profits of BOH by (Rs. Crores)

1. 102
2. 104
3. 106
4. 108

5. Total profits of the four companies is (Rs. Crores)

1. 25
2. 40
3. 30
4. 45

6. The profits of BOM form what percentage of the expenses of BOK?

12. 5%
13. 66%
14. 15%
15. 20%

Solution to example 1.1

It might seem a bit tedious to prepare the table, but once it is made all the answers will be self-evident. Thus, overall you will require LESS time. You should NOT only tey to solve this problem without preparing this table.

Example 1.2

Direction for questions 1 – 5:

As an investor, I have been studying the financial number of the four companies I invest in AAA Ltd, BB Ltd, CC Ltd and DDD Ltd. I notice a few interesting things. Sales of AAA Ltd are Rs. 100,000, which is equal to the cost of CC Ltd. As for companies BB Ltd and DDD Ltd, their asset-turnover ratio (ratio of sales to assets) is the same i.e. 3; however, the sales of BB Ltd are half that of DDD Ltd. The profit of CC Ltd is 25% of cost, which is equal to 2/3 of the profits of AAA Ltd. The profits of BB Ltd are equal to that of AAA Ltd which amount to 25% of BB Ltd sales. The last thing I noticed was that the costs of DDD Ltd is twice the sales of CC Ltd. Assume Profit = Sales – Cost

1. What is CC Ltd sales?

1. 250000
2. 100000
3. 125000
4. 75000

2. What is AAA Ltd costs?

1. 62500
2. 37500
3. 25000
4. 75000

3. What are DDD Ltd’s assets?

1. 300000
2. 100000
3. None of these
4. Can’t be determined

4. What are BB Ltd’s profits?

1. 62500
2. 37500
3. 25000
4. 75000

5.Which company is the most profitable, using the criterion of the profit percentage on sales?

1. AAA Ltd
2. BB Ltd
3. CC Ltd
4. DDD Ltd

Solution to example 1.2

Example 1.3

Tony Blair, a European investor, recently acquired a famous company Iraq Weapons Limited (IWL). He was browsing through the past record of IWL when he noticed that the sales of IWL have shown a steady increase (every year) of 20% over its value in 1996. The expenses of IWL have shown a steady decrease (every year) of 4% over its value in 1996. The employee strength of IWL has shown a steady increase (every year) of 2% over its value in 1996. The asset base of IWL has shown a steady increase (every year) of 5% over its value in 1996. The exports of IWL have shown a steady increase (every year) of 10% over its value in 1996.

The exports (Rs. Crores) of IWL in 1996 were 40 which was 10% of its asset base for the same year and the sales were Rs. 300 crores more than its asset base. The expenses were exactly 3/7 of its sales and number of employees was 300.

1. What is the asset base in the year 2000?

1. 420
2. 488
3. 480
4. None of these

2. What is the difference between asset base of 1999 and sales of 1997?

1. 380
2. 480
3. 360
4. 460

3. The exports of 1998 are what percentage of employees in 1996?

1. 15%
2. 21%
3. 66%
4. 16%

4. What is the sum of all exports during the year 1996 to 2000?

1. 230
2. 240
3. 220
4. None of these

5. The sales of 2000 is what percentage of employees in 1996?

1. 420%
2. 30%
3. 520%
4. 24%

Solution to example 1.3

Any question based on the given caselet can be easily be answered from the table prepared above.

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