mba

5/26/2018 mba

1/85

1 | P a g e

Financial Analysis

Of

Hero Motocorp LimitedA

Project Report

Presented to

Dr. Ashwin Modi

Faculty Member,

s.k.school of business management,

North Gujarat university.

On

Octomber,2013

In Partial fulfilment of the requirement for the

Managerial Accounting-1 Course in the

Master of Business Administration Programme

By:

Mihir Dave (06)

Yogesh Parmar(26 )

5/26/2018 mba

2/85

2 | P a g e

Chapter 1

Introduction of the company

5/26/2018 mba

3/85

3 | P a g e

1.1 Company profileHero is the brand name used by the Munjal brothers for their flagship company, Hero

Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was

established in 1984 as the Hero Honda Motors Limited at Dharuhera, India. Munjal family

and Honda group both owned 26% stake in the Company. In 2010, it was reported that Honda

planned to sell its stake in the venture to the Munjal family.

During the 1980s, the company introduced motorcycles that were popular in India for their

fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it

Shut itForget it' that emphasised the motorcycle's fuel efficiency helped the company grow

at a double-digit pace since inception. The technology in the bikes of Hero Honda for almost26 years (19842010) has come from the Japanese counterpart Honda.

Hero MotoCorp has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana

and at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million

bikes per year.[12] Hero MotoCorp has a large sales and service network with over 3,000

dealerships and service points across India. Hero Honda has a customer loyalty program since

2000,[13] called the Hero Honda Passport Program.

The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million

two-wheelers by 201617. This in conjunction with new countries where they can now

market their two-wheelers following the disengagement from Honda. Hero MotoCorp hopes

to achieve 10 per cent of their revenues from international markets, and they expected to

launch sales in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand

over the coming half decade, the company is coming up with their fourth factory in

Neemrana, Rajasthan while their fifth factory is planned to be set up in Gujarat.

1956Formation of Hero Cycles in Ludhiana(majestic auto limited)

1975Hero Cycles becomes largest bicycle manufacturer in India.

1983Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed Shareholders

Agreement signed

1984Hero Honda Motors Ltd. incorporated

1985Hero Honda motorcycle CD 100 launched.

5/26/2018 mba

4/85

4 | P a g e

1989Hero Honda motorcycle Sleek launched.

1991Hero Honda motorcycle CD 100 SS launched.

1994Hero Honda motorcycle Splendor launched.

1997Hero Honda motorcycle Street launched.

1999Hero Honda motorcycle CBZ launched.

2001Hero Honda motorcycle Passion and Hero Honda Joy launched.

2002Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition launched.

2003Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus, HeroHonda motorcycle Passion Plus and Hero Honda motorcycle Karizma launched.

2004Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ* launched.

2005Hero Honda motorcycle Super Splendor, Hero Honda motorcycle CD Deluxe, Hero

Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero Honda Scooter

Pleasure.

2007New Models of Hero Honda motorcycle Splendor NXG, New Models of Hero Honda

motorcycle CD Deluxe, New Models of Hero Honda motorcycle Passion Plus and Hero

Honda motorcycle Hunk launched.

2008New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour, Glamour

Fi and Hero Honda motorcycle Passion Pro launched.

2009New Models of Hero Honda motorcycle Karizma:KarizmaZMR and limited edition

of Hero Honda motorcycle Hunk launched

2010New Models of Hero Honda motorcycle Splendor Pro and New Hero Honda

motorcycle Hunk and New Hero Honda Motorcycle Super Splendor launched.

2011New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ Xtreme,

Karizma launched. New licensing arrangement signed between Hero and Honda. In August

Hero and Honda parted company, thus forming Hero MotoCorp and Honda moving out of the

Hero Honda joint venture. In November, Hero launched its first ever Off Road Bike NamedHero "Impulse".

5/26/2018 mba

5/85

5 | P a g e

2012-New Models of Hero Motocorp Maestro the Musculine scooter and Ignitor the young

generation bike are launched.

2013-New Karizma ZMR 2014 launched in Macau with EBR engines.

5/26/2018 mba

6/85

6 | P a g e

1.2 Board of Directors

PROFILE OF DIRECTORS

Dr. Brijmohan Lall MunjalChairman &

Whole Time Director

Mr. Pradeep DinodiaNon Executive &

Independent Director

Gen. (Retd.)

V. P. MalikNon Executive &

http://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-v-p-malik.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pradeep-dinodia.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-brijmohan-lall-munjal.html

5/26/2018 mba

7/85

7 | P a g e

Mr.Suman

Kant MunjalNon Executive Director

Mr. Paul EdgerleyNon Executive Director

Dr. Anand C. BurmanNon Executive &

http://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/dr-anand-c-burman.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-paul-edgerlley.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-suman-kant-munjal.html

5/26/2018 mba

8/85

8 | P a g e

Mr. Sunil Kant MunjalJt. Managing Director

Mr. M. DamodaranNon Executive &


Dr. Pritam SinghNon Executive &

http://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pritam-singh.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-me-leveeti-damodaran.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-sunil-kant-munjal.html

5/26/2018 mba

9/85

9 | P a g e

Mr. Ravi NathNon Executive &


Mr. Pawan MunjalManaging Director

& CEO
http://www.heromotocorp.com/en-in/board-of-directors/mr-pawan-munjan.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-ravi-nath.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pawan-munjan.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-ravi-nath.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pawan-munjan.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-ravi-nath.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pawan-munjan.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-ravi-nath.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pawan-munjan.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-ravi-nath.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-pawan-munjan.htmlhttp://www.heromotocorp.com/en-in/board-of-directors/mr-ravi-nath.html

5/26/2018 mba

10/85

10 | P a g e

1.3 About Company

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largestmanufacturer of two - wheelers, based in India.

In 2001, the company achieved the coveted position of being the largest two-wheelermanufacturing company in India and also, the 'World No.1' two-wheeler company interms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues tomaintain this position till date.

VISIONThe story of Hero Honda began with a simple vision - the vision of a mobile and an

empowered India, powered by its two wheelers. Hero MotoCorp Ltd., company's new

identity, reflects its commitment towards providing world class mobility solutions

with renewed focus on expanding company's footprint in the global arena.

MISSIONHero MotoCorps mission is to become a global enterprise fulfilling its customers'needs and aspirations for mobility, setting benchmarks in technology, styling and

quality so that it converts its customers into its brand advocates.

The company will provide an engaging environment for its people to perform to their

true potential. It will continue its focus on value creation and enduring relationships

with its partners.

5/26/2018 mba

11/85

11 | P a g e

STRATEGYHero MotoCorps key strategies are to build a robust product portfolio across

categories, explore growth opportunities globally, continuously improve itsoperational efficiency, aggressively expand its reach to customers, continue to invest

in brand building activities and ensure customer and shareholder delight.

BRANDThe new Hero is rising and is poised to shine on the global arena. Company's newidentity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus onmobility and technology and creating global footprint.Building and promoting new brand identity will be central to all its initiatives,

utilizing every opportunity and leveraging its strong presence across sports,entertainment and ground-level activation.

5/26/2018 mba

12/85

12 | P a g e

MANUFACTURINGHero MotoCorp two wheelers are manufactured across 3 globally benchmarkedmanufacturing facilities. Two of these are based at Gurgaon and Dharuhera which arelocated in the state of Haryana in northern India. The third and the latest

manufacturing plant is based at Haridwar, in the hill state of Uttrakhand.

DISTRIBUTIONThe Company's growth in the two wheeler market in India is the result of an intrinsicability to increase reach in new geographies and growth markets. Hero MotoCorps

extensive sales and service network now spans over to 5000 customer touch points.These comprise a mix of authorized dealerships, service & spare parts outlets, anddealer-appointed outlets across the country.

5/26/2018 mba

13/85

13 | P a g e

1.4 Listing information

Hero motocorp has been growing in leaps & bounds.

Heres a sneak peak.

Hero MotoCorp Ltd. is actively traded on the bourses and is included in the omputation of theBSE-100, BSE-200, BSE-500, S&P CNX Nifty and S&P CNX 500. The scrip is traded on

the nationwide network of terminals of the following

Stock Exchanges:

BOMBAY STOCK EXCHANGE LIMITED

Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.Telephone: 022-2272 1233/34Facsimile: 022-2272 1919e-mail:Website: www.bseindia.com

BSE Code: 500182

NATIONAL STOCK EXCHANGE LIMITED

Exchange Plaza, Plot No C/1,G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.Telephone: 022-2659 8100-114Facsimile: 22-2659 8120e-mail:Website: www.nseindia.comBSE Code: 500182
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]

5/26/2018 mba

14/85

14 | P a g e

1.5 Analysis of directors speech

Word 2007 2008 2009 2010 2012 2013 Total

Company 27 24 17 15 21 23 127

Performance 6 4 4 5 8 6 33

Increase 5 7 7 9 8 3 39

Your company 15 14 12 12 8 17 78

Sales 7 9 6 8 12 15 57

Profit 4 3 2 1 5 6 21

Product 15 18 11 11 20 13 88

Growth 20 12 11 17 20 16 96

Advantage 4 8 6 10 12 4 44

Loss 0 0 0 0 0 0 0

Decrease 0 0 0 0 0 0 0

5/26/2018 mba

15/85

15 | P a g e

Chapter 2

Trend Analysis

5/26/2018 mba

16/85

16 | P a g e

2.1 Trend Analysis of Balance Sheet

particulars Mar-11 Mar-12 Mar-13

I EQUITY AND LIABILITIES

1 Shareholders funds

(a) Share capital 100 100 100

(b) Reserves and surplus 100 146 170

2 Non - current liabilities

(a) Long term liabilities 100 69 21

(b) Deferred tax liabilities (Net) 100 84 54

(c) Long - term provisions 100 107 85

3 Current liabilities

(a) Trade payables 100 111 90

(b) Other current liabilities 100 34 31

(c) Short - term provisions 100 101 135

Total 100 92 90

II ASSETS

1 Non - current assets(a) Fixed assets

(i) Tangible assets 100 108 117

(ii) Intangible assets 100 83 48

iii) Capital work-in-progress 100 78 124

(b) Long term investments, non- current 100 145 132

c) Long - term loans and advances 100 156 228

d) Other non- current assets 100 158 222

2 Current assets(a) Current investments 100 71 65

(b) Inventories 100 129 121

(c) Trade receivables 100 209 509

(d) Cash and cash equivalents 100 107 253

(e) Short - term loans and advances 100 138 161

(f) Other current assets 100 110 87

Total 100 92 90

5/26/2018 mba

17/85

17 | P a g e

2.2 Interpretation of trend analysis of balance sheet

2.2.1 Shareholdersfunds

PARTICULARS Mar-11 Mar-12 Mar-13Shareholders funds 100 145 169

Interpretation:

This chart shows the share holders fund which contains a) share capital b) reserves and

surplus. In base year share holders fund is 100 which is rapidly increase in next two year. In

2012 it become 145 and in 2013 it become 169. With respect to the base year it is increase so

that we can say that company is good in the share capital.

0

20

40

60

80

100

120

140

160

180

Shareholders funds

shareholders' funds

Mar-11

Mar-12

Mar-13

5/26/2018 mba

18/85

18 | P a g e

2.2.2 Non - current liabilities

PARTICULARS Mar-11 Mar-12 Mar-13

Non - current liabilities 100 72 27

Interpretation:

This chart shows the Non - current liabilities which contains (a) Long term liabilities (b)

Deferred tax liabilities (Net) (c) Long - term provisions. In base year Non - current liabilities

is 100 which is rapidly decrease in next two year. In 2012 it become 72 and in 2013 it

become 27. With respect to the base year it is decrease so that we can say that company is

good in management of non-current liabilities.

0

20

40

60

80

100

120

Non - current liabilities


Mar-11

Mar-12

Mar-13

5/26/2018 mba

19/85

19 | P a g e

2.2.3 Current liabilities


Current liabilities 100 72 69

Interpretation:

This chart shows the current liabilities which contains (a) Trade payables (b) Other current

liabilities (c) Short - term provisions. In base year share holders fund is 100 which is rapidly

decrease in next two year. In 2012 it is become 72 and in 2013 it become 69. With respect to

the base year it is decrease so that we can say that company is good in the current liabilities.

As per the data we can say that company is now at very good position.

0

20

40

60

80

100

120

Current liabilities

Current liabilities

Mar-11

Mar-12

Mar-13

5/26/2018 mba

20/85

20 | P a g e

2.2.4 Fixed assets

PARTICULARS MAR-11 MAR-12 MAR-13Fixed assets 100 93 76

Interpretation:

This chart shows the situation of fixed assets in the company. Fixed assets contain (i)

Tangible assets (ii) Intangible assets (iii) Capital work-in-progress. In base year share holders

fund is 100 which is decrease in next two year. It is shows that company is going to decrease

their fixed assets as per the technology change. As per the data we can say that company is onright way.

0

20

40

60

80

100

120

Fixed assets

Fixed assets

Mar-11

Mar-12

Mar-13

5/26/2018 mba

21/85

21 | P a g e

2.2.5 long term investment

PARTICULARS Mar-11 Mar-12 Mar-13Long term investments, non- current 100 145 132

Interpretation:

This chart shows the long term investment is more in 2012 as compare to the base year. Then

in 2013 it is slide decrease and become 132 which were 145 in 2012. Company has invested

more and more in outside market. Its good for the share holders to invest in the company.

0

20

40

60

80

100

120

140

160

Long term investments, non- current

long term investment

Mar-11

Mar-12

Mar-13

5/26/2018 mba

22/85

22 | P a g e

2.2.6 Long - term loans and advances


Long - term loans and advances 100 156 228

Interpretation:

This chart represents increasing trend of long term loans and advances. It is quite high in

2013. As per the base year it is constantly increase in 2012 it was 156 which is now 228 in

2013. This situation shows that company gain more and more loan and advances from outside

which is not so good for the company.

0

50

100

150

200

250

Long - term loans and advances

Long - term loans and advances

Mar-11

Mar-12

Mar-13

5/26/2018 mba

23/85

23 | P a g e

2.2.7 Current assets

Interpretation:The above chart of current assets shows the fluctuating trend. The current assets of the

company decreased 100 in 2011 to 84 in 2012. Then after it is increase and become 88 in

2013. Current assets increase or decrease because of the inventories in this case company

decrease their inventories as compare to the base year.

75

80

85

90

95

100

105

Current assets

Current assets

Mar-11

Mar-12

Mar-13


Current assets 100 84 88

5/26/2018 mba

24/85

24 | P a g e

2.3 Trend Analysis of profit and loss account

Particular Mar-11 Mar-12 Mar-13I revenue from operations(a) Gross sales of products 100 121 123

Less: Excise duty 100 117 133

(b) Other operating revenue 100 138 121

Net revenue from operations 100 122 123

Ii other income 100 126 138Iii total revenue (i + ii) 100 122 123

Iv expenses:

(a) Cost of materials consumed 100 123 123

(b) Changes in inventories of finished goods and work in-progress

100 348 136

(c) Employee benefits expenses 100 119 133

(d) Finance costs 100 140 79

(e) Depreciation and amortization expenses 100 273 284

(f) Other expenses 100 95 110

TOTAL EXPENSES 100 123 126

V profit before exceptional items and tax (iii - iv) 100 115 102

Vi exceptional items 100 0 0

Vii profit before tax (v - vi) 100 119 105

Viii tax expenses:

(a) Current tax 100 120 106

(b) Minimum alternate tax 100 48 17

(c) Net current tax 100 137 127

(d) Deferred tax 100 41 81

IX PROFIT FOR THE YEAR (VII-VIII) 100 123 110

X BASIC AND DILUTED EARNINGS PER EQUITY SHARE 100 118 106

5/26/2018 mba

25/85

25 | P a g e

2.3.1 Gross sales of products

Interpretation:

The chart of sales shows increasing trend throughout the years. As in 2011 it was 100 which

was increase in 2012 by 121 then after it is increase and become 123 in 2013. This situation

of the company is good for the company because it shows the demand of company is increase

day by day.

0

20

40

60

80

100

120

140

Gross sales of products

Mar-11

Mar-12

Mar-13

PARTICULAR Mar-11 Mar-12 Mar-13Gross sales of products 100 121 123

5/26/2018 mba

26/85

26 | P a g e

2.3.2 Other operating revenue

0

20

40

60

80

100

120

140

160

Other operating revenue

Mar-11

Mar-12

Mar-13

PARTICULAR Mar-11 Mar-12 Mar-13

Other operating revenue 100 138 121

5/26/2018 mba

27/85

27 | P a g e


Other income 100 126 138

This chart represents the trend of other income in base year 2011 it was 100. Then after it is

rapidly increase in 2012 it is 126 and then after it is become 138. Over all comparison of

chart says that other income is increase which is good for company and shareholders also.

0

20

40

60

80

100

120

140

160

OTHER INCOME

Mar-11

Mar-12

Mar-13

5/26/2018 mba

28/85

28 | P a g e


(a) Cost of materials consumed 100 123 123

Interpretation:

This chart represents the trend of cost of materials consumed in base year 2011 it was 100.Then after it is rapidly increase in 2012 it is 123 and then after it is become 123. Over all

comparison of chart says that cost of material consumed is increase which is good for

company because the consumption of row material is increase when production is increase it

is represent the increment of sales.

0

20

40

60

80

100

120

140

(a) Cost of materials consumed

Mar-11

Mar-12

Mar-13

5/26/2018 mba

29/85

29 | P a g e


(b) Changes in inventories of finished goods and work in-progress 100 348 136

0

50

100

150

200

250

300

350

400

(b) Changes in inventories of finished goods and workin-progress

Mar-11

Mar-12

Mar-13

5/26/2018 mba

30/85

30 | P a g e


(c) Employee benefits expenses 100 119 133

This chart represents the trend of Employee benefits expenses in base year 2011 it was 100.

Then after it is rapidly increase in 2012 it is 119 and then after it is become 133. Over all

comparison of chart says that cost of Employee benefits expenses is increase which is good

for employee of company but not for the company obviously production is increase and profit

also increase but company have to pay more for it which is not so good.

0

20

40

60

80

100

120

140

(c) Employee benefits expenses

Mar-11

Mar-12

Mar-13

5/26/2018 mba

31/85

31 | P a g e


(d) Finance costs 100 140 79

0

20

40

60

80

100

120

140

160

(d) Finance costs

Mar-11

Mar-12

Mar-13

5/26/2018 mba

32/85

32 | P a g e


(e) Depreciation and amortization expenses 100 273 284

The chart of depreciation shows increasing trend throughout the three years. As in 2011 it

was 100 which is base year then after it becomes 273 then in 2013 it is become 284. This

situation of company shows that the company increase their assets every year because of it

depreciation is increasing every year.

0

50

100

150

200

250

300

(e) Depreciation and amortization expenses

Mar-11

Mar-12

Mar-13

5/26/2018 mba

33/85

33 | P a g e


(f) Other expenses 100 95 110

This chart represents the trend of other expenses in base year 2011 it was 100. Then after it is

decrease in 2012 and become 95 and then after it is become 110. Over all comparison of chart

says that other expenses are increase which is not so good for company. Company should

have control their expenses.

85

90

95

100

105

110

115

(f) Other expenses

Mar-11

Mar-12

Mar-13

5/26/2018 mba

34/85

34 | P a g e


PROFIT BEFORE TAX 100 119 105

This chart shows the profit before tax is more in 2012 as compare to the base year. Then in2013 it is decrease and become 105 which were 119 in 2012. The sales and expenses are

increasing and decreasing year by year so that fluctuation is made in PBT.

90

95

100

105

110

115

120

125

PROFIT BEFORE TAX

Mar-11

Mar-12

Mar-13

5/26/2018 mba

35/85

35 | P a g e


PROFIT FOR THE YEAR (PAT) 100 123 110

The chart of PAT shows the fluctuating trend. As in 2011 PAT of the company is 100 which

is increase in 2012 by 123 then after it is again increase and become 110 in 2013. As compare

to the base year performance of the company is good but compare to the year 2012 in 2013 it

is bad. So that we can say that company should have concentrate on their profit and take right

decision.

0

20

40

60

80

100

120

140

PROFIT FOR THE YEAR (PAT)

Mar-11

Mar-12

Mar-13

5/26/2018 mba

36/85

36 | P a g e

Horizontal Analysis

Financial statement presents comparative information for the current year as

well as the previous year. A simple approach to financial statement analysis,

known as horizontal analysis, is to calculate the amount and percentage changes

from the previous year to the current year.

5/26/2018 mba

37/85

37 | P a g e

Horizontal analysis of balance sheet


EQUITY AND LIABILITIES


(a) Share capital 0% 0% 0%

(b) Reserves and surplus 0% -45.74% -70.31%

2 Non - current liabilities 0% 28.28% 73.50%

(a) Long term liabilities 0% 31.25% 79.46%

(b) Deferred tax liabilities (Net) 0% 15.61% 46.34%

(c) Long - term provisions 0% -6.50% 15.47%

3 Current liabilities 0% 27.84% 30.68%

(a) Trade payables 0% -10.60% 9.64%

(b) Other current liabilities 0% 65.62% 69.37%

(c) Short - term provisions 0% -0.64% -34.85%

Total 0% 46.54% 47.87%

II ASSETS

1 Non - current assets

(a) Fixed assets 0% 7.41% 24.14%

(i) Tangible assets 0% -8.10% -17.32%

(ii) Intangible assets 0% 17.24% 52.21%

iii) Capital work-in-progress 0% 22.26% -24.28%

(b) Long term investments, non- current 0% -44.79% -32.01%

(c) Long - term loans and advances 0% -55.90% -127.9%

(d) Other non- current assets 0% -58.31% -121.8%

2 Current assets

(a) Current investments 0% 29.44% 35.47%

(b) Inventories 0% -28.70% -21.30%

(c) Trade receivables 0% -108.52% -409.2%

(d) Cash and cash equivalents 0% -7.41% -153.1%

(e) Short - term loans and advances 0% -37.97% -60.58%

(f) Other current assets 0% -9.70% 13.29%

Total 0% 33.44% 35.10%

5/26/2018 mba

38/85

38 | P a g e

This chart shows the horizontal analysis of share holders fund. In 2012 it is -45.74 and in

2013 it is become 70.31. Which is interpret that the share holders fund decrease by 45.74% as

compare to the 2011 and 70.31% decrease in 2013.

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Shareholders funds

Mar-11

Mar-12

Mar-13

5/26/2018 mba

39/85

39 | P a g e

This chart shows the horizontal analysis of non-current liabilities. In 2012 it is 28.28and in

2013 it is become 73.50. Which is interpret that the share holders fund increase by 28.28% as

compare to the 2011 and 73.50% increase in 2013.

0%

10%

20%

30%

40%

50%

60%

70%

80%



Mar-11

Mar-12

Mar-13

5/26/2018 mba

40/85

40 | P a g e

This chart shows the horizontal analysis of current liabilities. In 2012 it is 27.84 and in 2013

it is become 30.68. Which is interpret that the share holders fund increase by 27.84% as


0%

5%

10%

15%

20%

25%

30%

35%

Current liabilities

Current liabilities

Mar-11

Mar-12

Mar-13

5/26/2018 mba

41/85

41 | P a g e

This chart shows the horizontal analysis of non-current asset. In 2012 it is 2.23 and in 2013 it

is become 15.27. Which is interpret that the share holders fund increase by 2.23% as compare

to the 2011 and 15.27% increase in 2013.

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%


Mar-11

Mar-12

Mar-13

5/26/2018 mba

42/85

42 | P a g e

This chart shows the horizontal analysis of non-current asset. In 2012 it is 16.30and in 2013 it

is become 12.03. Which is interpret that the share holders fund increase by 16.30% as


Horizontal Analysis of profit and loss

account

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Current assets

Mar-11

Mar-12

Mar-13

5/26/2018 mba

43/85

43 | P a g e

PARTICULAR MAR-11 MAR-12 MAR-13

I REVENUE FROM OPERATIONS

(a) Gross sales of products 0.00% -21.11% -23.29%

Less: Excise duty 0.00% -16.84% -33.47%

(b) Other operating revenue 0.00% -37.99% -21.24%

Net revenue from operations 0.00% -21.55% -22.53%

II OTHER INCOME 0.00% -25.88% -37.55%

III TOTAL REVENUE (I + II) 0.00% -21.62% -22.75%

IV EXPENSES:

(a) Cost of materials consumed 0.00% -22.85% -22.85%

(b) Changes in inventories of finished goods and work

in-progress

0.00% -248.46% -36.33%

(c) Employee benefits expenses 0.00% -18.83% -32.63%

(d) Finance costs 0.00% -40.41% 21.49%

(e) Depreciation and amortization expenses 0.00% -172.71% -183.75%

(f) Other expenses 0.00% 5.46% -10.20%

Total Expenses 0.00% -22.53% -25.78%

V PROFIT BEFORE EXCEPTIONAL ITEMS AND

TAX (III - IV)

0.00% -15.30% -1.80%

VI EXCEPTIONAL ITEMS 0.00% 100.00% 100.00%

VII PROFIT BEFORE TAX (V - VI) 0.00% -19.13% -5.17%VIII TAX EXPENSES:

(a) Current tax 0.00% -19.76% -5.64%

(b) Minimum alternate tax 0.00% 51.93% 83.08%

(c) Net current tax 0.00% -37.16% -27.18%

(d) Deferred tax 0.00% 59.04% 19.33%

IX PROFIT FOR THE YEAR (VII-VIII) 0.00% -23.35% -9.87%

X BASIC AND DILUTED EARNINGS PER EQUITY

SHARE

0.00% -18.46% -5.51%

PARTICULAR MAR-11 MAR-12 MAR-13

TOTAL REVENUE 0% -21.62% -22.75%

5/26/2018 mba

44/85

44 | P a g e

Total Expenses 0% -22.53% -25.78%

PROFIT BEFORE EXCEPTIONAL ITEMS ANDTAX

0% -15.30% -1.80%

PROFIT BEFORE TAX 0% -19.13% -5.17%

PROFIT FOR THE YEAR (PAT) 0% -23.35% -9.87%

This chart shows the horizontal analysis of total revenue. In 2012 it is -21.62 and in 2013 it is

become -22.75. Which is interpret that the total revenue fund decrease by 21.62% as compare

to the 2011 and 22.75% decrease in 2013.which is not so good for company.

-25%

-20%

-15%

-10%

-5%

0%Jan/11 Jan/12 Jan/13

TOTAL REVENUE

TOTAL REVENUE

5/26/2018 mba

45/85

45 | P a g e

This chart shows the horizontal analysis of total expenses. In 2012 it is -22.53 and in 2013 it

is become -25.78. Which is interpret that the total expenses decrease by 22.53% as compare

to the 2011 and 25.78% decrease in 2013.which is good for company.

-30%

-25%

-20%

-15%

-10%

-5%

0%

Jan/11 Jan/12 Jan/13

Total Expenses

Total Expenses

5/26/2018 mba

46/85

46 | P a g e

This chart shows the horizontal analysis of profit before tax. In 2012 it is -19.13 and in 2013

it is become -5.17. Which is interpret that the profit before tax decrease by 19.13% as

compare to the 2011 and 5.17% decrease in 2013.

-25%

-20%

-15%

-10%

-5%

0%


PROFIT BEFORE TAX

PROFIT BEFORE TAX

5/26/2018 mba

47/85

47 | P a g e

This chart shows the horizontal analysis of profit after tax. In 2012 it is -23.35 and in 2013 it

is become -9.87. Which is interpret that the profit before tax decrease by 23.35% as compare

to the 2011 and 9.87% decrease in 2013.

Vertical Analysis: Balance Sheet

-25%

-20%

-15%

-10%

-5%

0%




5/26/2018 mba

48/85

48 | P a g e


I EQUITY AND LIABILITIES


(a) Share capital 0.22 0.40 0.41

(b) Reserves and surplus 15.77 42.98 51.51


(a) Long term liabilities 7.95 10.23 3.13

(b) Deferred tax liabilities (Net) 1.33 2.11 1.37

(c) Long - term provisions 0.19 0.38 0.31


(a) Trade payables 11.21 23.19 19.43

(b) Other current liabilities 15.67 10.07 9.21

(c) Short - term provisions 5.65 10.64 14.62

Total 100 100 100

II ASSETS


(a) Fixed assets 27.80 38.67 32.50

(i) Tangible assets 10.85 17.63 19.62

(ii) Intangible assets 16.61 20.65 12.23

iii) Capital work-in-progress 0.34 0.39 0.64

(b) Long term investments, non- current 3.13 6.82 6.37

(c) Long - term loans and advances 2.30 5.40 8.09

(d) Other non- current assets 0.11 0.26 0.38

2 Current assets

(a) Current investments 31.39 33.27 31.21

(b) Inventories 3.53 6.83 6.60

(c) Trade receivables 0.88 2.75 6.90

(d) Cash and cash equivalents 0.48 0.78 1.88

(e) Short - term loans and advances 2.32 4.81 5.74

(f) Other current assets 0.25 0.41 0.33

Total 100 100 100

EQUITY AND LIABILITIES

5/26/2018 mba

49/85

49 | P a g e

Share capital

Reserves and

surplus

Long term liabilities

Deferred tax

liabilities (Net)Long - term

provisions

Other current

liabilities

Trade payables

Short - term

provisions

Mar-2011

Share capital

Reserves and

surplus

Long term liabilities

Deferred tax

liabilities (Net)

Long - term

provisions

Trade payables

Other currentliabilities

Short - termprovisions

Mar-2012

5/26/2018 mba

50/85

50 | P a g e

Share capital

Reserves and

surplus

Long term

liabilities

Deferred tax

liabilities (Net)

Long - term

provisions

Trade payables

Short - term

provisions

Other current

liabilities

Mar-2013

5/26/2018 mba

51/85

51 | P a g e

ASSETS

Fixed assets

Long term

investments, non-

current

Long - term loans

and advances

Other non-

currentassets

Current investments

Inventories

Trade receivablesCash and cash

equivalents

Short - term loans

and advancesOther

current

assets

Mar 2011

5/26/2018 mba

52/85

52 | P a g e

Fixed assets

39%

Long term

investments, non-

current

7%Long - term loans

and advances

5%

Other non- current

assets

0%

Current investments

33%

Inventories

7%

Trade receivables

3%

Cash and cash

equivalents

1%

Short - term

loans and

advances

5%

Other current assets

0%

Mar 2012

5/26/2018 mba

53/85

53 | P a g e

Fixed assets

39%

Long term

investments, non-

current

4%

Long - term loans

and advances3%

Other non- current

assets

0%

Current investments

44%

Inventories

5%

Trade receivables

1%Cash and cashequivalents

1%

Short - term

loans and

advances

3% Other current

assets

0%

Mar 2013

5/26/2018 mba

54/85

54 | P a g e

Vertical Analysis: Profit and Loss Account

This chart shows the vertical analysis of profit and loss account year of 2011. This chart

shows the part of the income is where gone. Here total sales is 100 which is base from this

100 other income get1.49, total expenses get 88.68 profit before tax get 12.40 and at last

profit after tax get 9.94. As per the data we can say that company get 9.94% profit from the

sales of items which is good for the company.

OTHER INCOME

Total Expenses

PROFIT BEFORE TAX

PROFIT FOR THE

YEAR (PAT)

Mar-11


REVENUE FROM OPERATIONS(SALES) 100 100 100

OTHER INCOME 1.49 1.55 1.68

Total Expenses 88.68 89.40 91.03

PROFIT BEFORE TAX 12.40 12.15 10.64

PROFIT FOR THE YEAR (PAT) 9.94 10.09 8.91

5/26/2018 mba

55/85

55 | P a g e

This chart shows the vertical analysis of profit and loss account year of 2012. This chartshows the part of the income is where gone. Here total sales is 100 which is base from this

100 other income get 1.55, total expenses get 89.40 profit before tax get 12.15 and at last

profit after tax get 10.09. as per the data we can say that company get 10.09% profit from the

sales of items which is good for the company. As compare to the last Year Companys profit

is increase.

OTHER INCOME

Total Expenses

PROFIT

BEFORE TAX

PROFIT FOR THE

YEAR (PAT)

Mar-12

5/26/2018 mba

56/85

56 | P a g e

This chart shows the vertical analysis of profit and loss account year of 2012. This chart

shows the part of the income is where gone. Here total sales is 100 which is base from this

100 other income get 1.68, total expenses get 91.03 profit before tax get 10.64 and at lastprofit after tax get 8.91. As per the data we can say that company get 8.91% profit from the

sales of items which is good for the company. As compare to the last Year Companys profit

is decrease which is not so good for the company as well as share holders.

OTHER INCOME

Total Expenses

PROFIT BEFORE TAX

PROFIT FOR THE

YEAR (PAT)

Mar-13

5/26/2018 mba

57/85

57 | P a g e

RATIO ANALYSISINTRODUCTION

Financial analysis is the process identifying financial strength and weakness of the firm by

properly established relationship between the item of the balance sheet and profit and loss accounts.

Ratio analysis is powerful tool to financial. Ratio is definded as the indicated quotient of two

mathematical expression and the relationship two or more thing.

Ratio analysis involves establishing a relevant financial relationship between components of

financial statement. Using a ratio analysis we can easily conclude the position of industryies. The ratio

can be classified as follows.

PROFITABILITY RATIO

LIQUIDITY RATO

ASSETS TURNOVER RATIO

FINANCE STRUCTURE RATIO

VALUATION RATIO

PROFITABILITY RATIO

5/26/2018 mba

58/85

58 | P a g e

Analysisshould earn profit to survive and grow over a long period of time. It would

be wrong to assume that every action initiated by management of company should be aimed

at maximization profit. Irrespective of social as well as economic consequence it is fact that

sufficient must be earned to sustain the operation of the business to be eble to obtain fund

from investor for expanses and grow and to contribution toward the welfare of the society in

business environment and globalization.

Profitability ratios are as under

(1) Gross profit ratio(2) Net profit ratio(3) Operating profit ratio(4) Rate of return on investment(5) Rate of return on equity.

(1) GROSS PROFIT RATIOGross profit ratio = gross profit /sales*100

Years 2011 2012 2013

Gross profit 3939.25 5115.3 4984.47

Sales 19397.93 23579.03 23768.11

Gross profit ratio 20.31% 21.69% 20.97%

5/26/2018 mba

59/85

59 | P a g e

Inter pretation :

We have following the above details company gross profits increase in every year and that is position

good for the company in future. Here company 2013 comparison 2012 low gross profit but good

position in the present market condition

NET PROFIT RATIO:

Net profit ratio = Net profit / sales * 100

Years 2011 2012 2013

Net profit 2118.16 2378.13 1927.9

Sales 19397.93 23579.03 23768.11

Net profitratio

8.91% 10.09% 9.94%

19.50%

20.00%

20.50%

21.00%

21.50%

22.00%

2011 2012 2013

grossprofit

5/26/2018 mba

60/85

60 | P a g e

Inter pretation :

Net profit ratio shows the value of net income of the company against total sales. We have seen the

above details than decide compare for 20012 to2013 not good for a company net profit. But all over

result of the company far far batter and future expansion is also good.

Operating profit ratio :

Operating profit ratio = Operating profit/sales*100

Years 2011 2012 2013

Operatingprofit

3191.03 3535.32 2557.94

Sales 19397.93 23579.03 23768.11

Operatingprofit ratio

13.43% 14.99% 13.19%

8.2

8.4

8.6

8.8

9

9.2

9.4

9.6

9.8

10

10.2

2011 2012 2103

net profit ratio

5/26/2018 mba

61/85

61 | P a g e

INTERPRETATION

It is not actual or gross profit. But like total profit hand during the year. There is a record ofday to day expenses cone by the company mainly on selling & administrative basis.

Companys operating profit ratio was increased in 2012 and then decreased in 2013 to 2011

to 2013 because of high expenses and low market condition.

We look at the above calculation compare to last year of the company is decrease theoperating profit approximately 10% that is not good position of the company.

Rate of Return on Equity

Years 2011 2012 2013Profit for the equity 1927.9 2378.13 2118.16

12

12.5

13

13.5

14

14.5

15

15.5

2011 2012 2013

operatin profit ratio

RROE = PAT/Net Worth *100

5/26/2018 mba

62/85

62 | P a g e

New worth 2956.06 4289.83 5006.24

Raturn on equity

ratio

65.22 55.44 42.31

INTERPRETATION

RROE indicate how the resources of the owners have been used. This ratio is one of the

most important to the financial analysis. This ratio measures the efficiency with which

shareholders funds are employed.

Shareholders expected managers to earn a ROE higher than the firms cost of capital.

Competitors try and replace a companys special advantages in production offerings and

burden .in the present situation company position on batter because company ROE can

degrees for the 2011 to 2013

0

10

20

30

40

50

60

70

2011 2012 2013

Column2Column1

ROE

5/26/2018 mba

63/85

63 | P a g e

Rate of Return on Investment

Years 2011 2012 2013

EBIT 2419.93 2886.01 2541.11

TOTAL ASSETS 14856.5 9888.92 9641.65

Rate of return onequity

16.29% 29.18% 26.36%

Interpretation

Here company gives more return on investment. RROI ratio is related to the investors. Here

company gives more return on investments. This year RROI is less compared to the previous

year.

We look at the above details company comparative decrease RROI in comparison 2011 to

2013 low in the present situation far far lose.it means company prostitution is not a good for

2013.

0

5

10

15

20

25

30

35

2011 2012 2013

Column2

RRE

Column1

RROI = EBIT/Total assets *100

5/26/2018 mba

64/85

64 | P a g e

LIQUIDITY RATIO

Liquidity ratio is the ratio, which given then liquidity for the company i.e. they are company

for seeing whether is capable of meeting its short term obligation form its short-term

resources. The failure of the company to meet its obligation due to lack of the sufficient

liquidity will result in reducing the creditworthiness of the company. In addition, a very high

degree of the liquidity ration is because the idle assets earn nothing and also the companys

fund will be unnecessarily tide up in current assets. Therefore, the liquidity ration should bein the proper rate. The different types of liquidity ratio are calculating as under and are

interpreted

Liquidity ratio includes the followings ratio

Current ratio Quick ratio Net working ratio Cash generated per rupee of sales

5/26/2018 mba

65/85

65 | P a g e

Current Ratio

Current ratio= Current Assets /Current Liablities

Years 2011 2012 2013

Current assets 5771.84 4830.96 5077.61

Current liability 6016.71 4341.44 4170.68

Current ratio 0.95 1.11 1.22

2013 2012 2011

company 1.22 1.11 0.96

Industry 0.97 0.86 0.66

Interpretation

It is widely used indicator of companys ability to pay its debts in the short-term. It shows the

amount per rupee of current liabilities.

current ratio shows the relation between current assets and current liabilities. As per the data

companys current ratio in 2013 is 1.22 and industry s ratio is 0.97 company is better than

industry because the standard value of current ratio is 2:1 here company is more capable to

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2011 2012 2013

company

industry

5/26/2018 mba

66/85

66 | P a g e

pay its liabilities then the industry. Similarly in other years situation is same in 2012

companys ratio is 1.11 and industrys ratio is 0.86 in 2011 companys ratio is 0.96 and

industrys ratio is 0.66. so that we can say that company is good in maintain their assets and

liabilities.

Quick Ratio

Years 2011 2012 2013

Quick asset 5246.91 4155.39 4440.85

Quick liability 6016.71 4341.44 4170.68

Quick assets ratio 0.87 0.96 1.06

2013 2012 2011

Company 1.06 0.96 0.87

Industry 0.7 0.59 0.46

0

0.2

0.4

0.6

0.8

1

1.2

2011 2012 2013

company

industry

QR = QA/QL

5/26/2018 mba

67/85

67 | P a g e

InterpretationThis ratio is the expression of current assets less inventories to current liabilities. It is a part of

liquidity ratio. This ratio established the relationship between quick and liquid if it can be converted

into cash immediately or reasonable soon without a loss of value cash in the most liquid assets than

other assets which are considered to be relatively liquid and includes in the quick assets are book debt

and marketable security. It is also constantly decreased in all financial years and proves to be bad

condition between quick assts and quick liabilities.

Quick ratio shows the capacity of company to pay liabilities in short time. It shows the quickness of

company to pay liabilities. There are some quick assets are available in company like cash on hand,

bank balance, debtors, etc. as per the data in 2013 quick ratio of the company is 1.06 and the industry

is 0.7 the company is much better than the industry because the ideal Quick ratio should be 1:1. so

that we can say that company maintain their assets and liabilities. In 2012 it is 0.96 in 2011 it is 0.87

in 2009 it is 1.91 and in 2008 it is 1.64 this is near to the ideal ratio so that we can say that it is good

for the company.

Net Working Capital Ratio

Years 2011 2012 2013

Total current assets 2068.25 1540.66 1108.55

Total current liability 4170.68 4341.44 6016.71Net working capital -2102.43 2800.78 4908.16

Interpretation

Net working capital means the different between total current assets and total current liabilities. A

positive net working capital is good indicator of liabilities position of the company. Here, as indicated

for all five financial years the NWCR going to be negative. This means that the company is not

increasing its safety stock properly.

NWCR = Total CATotal CL

5/26/2018 mba

68/85

68 | P a g e

Bank Finance gap ratio

75%(CA-CL)

Years 2011 2012 2013

Total current assets 5246.91 4155.39 4440.85

Total current liability 6016.71 4341.44 4170.68

Bank financial gap

ratio

-768.8 -186.05 270.17

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

6000

2011 2012 2013

NWCR

5/26/2018 mba

69/85

69 | P a g e

ASSETS TURNOVER RATIO

In is basically is basically ratio which measure the output produced from the given input deployed.

This includes

Total assets turnover Net fixed assets turnover Inventory turnover Debtors turnover

5/26/2018 mba

70/85

70 | P a g e

Total Assets Turnover

Years 2011 2012 2013

Sales 19245.03 23368.05 23582.74

Total assets 14856.5 9888.92 9641.65

Total assets turnover

ratio

1.3 times 2.36 times 2.45 times

0

0.5

1

1.5

2

2.5

3

2011 2012 2013

Total assets turnover ratio

TAT = Total sales / Total assets

5/26/2018 mba

71/85

71 | P a g e

Interpretation

This is a measure of the efficiency with which the assets are utilized. It indicates how many

times the assets were turned over in a period. This ratio states utilization of assets which is done

in a proper manner or not. It is shown in the graph that it is decreased in all the years so; the

company has to maintain it good to run its business successively.

we have solve the above calculation of the company total assets are good for the

company because than increase2.45 times compare the previous year and total assets more

increased than the reason about the company future is good.

Net Fixed Assets Turnover

Years 2011 2012 2013

Sales 19245.03 23368.05 23582.74

Net fixed assets 4130.24 3824.35 3133.07Net fixed assetsturnover ratio


NFAT = Total sales / Net fixed assets

5/26/2018 mba

72/85

72 | P a g e

Interpretation

It is calculated by sale to net fixed assets. If it is higher than it means a company better selling in

market and if it is low then the company has no more selling in the market as compared to the other

companies. According to the above graph this ratio is increased in all years. And it will affects to theinvestment of the company.

Fixed assets turnover ratio shows the relationship between net revenue or sales and fixed asset. It

shows the part of the fixed assets return in the sales. Here it is 4.66times in the 2011, 6.11 times in

2012 and 7.33 times in 2013 years. It means company good position to fixed assets turnover compare

to previous year.

NET WORKING CAPITAL TURN OVER RATIO:

NFAT = Total sales / Net fixed assets

Years 2011 2012 2013Sales 19245.03 23368.05 23582.74

0

1

2

3

4

5

6

7

8

Net fixed assets turnover ratio

2011

2012

2013

NWCT = Total sales / Net

5/26/2018 mba

73/85

73 | P a g e

Net working assets 4138.36 2614.73 2372.60

Net working capitalturnover ratio


Interpretation

This ratio shows the number of times a companys working capital is turnover in to sales. The lesser

the working capital, the greater the cash available for the meeting operating needs. In recent years,

many company not operating cycle time decreased but in this company working capital turn over ratio

is comparative increase in 2011 to 2013 in the 2011 WCTR is 4.65 times in the compare 2013 double

like a 9.94 times.

Inventory Turnover

Avg. Inventory= opening inventory + closing inventory /2

Years 2011 2012 2013

Sales 19245.03 23368.05 23582.74

inventory 524.93 675.57 636.76

Inventory turnoverratio


0

2

4

6

8

10

12

Net working capital turnover ratio

2011

2012

2013

IT = Total sales / Avg. inventory

5/26/2018 mba

74/85

74 | P a g e

Interpretation

Inventory turnover ratio shows amount blocked in stock and how fast it can be converted into sales

and finally in cash. The ratio also shows the no. of times the companys inventory is turned into sales.

Efficiency of the company is indicating by this. Stock turnover is high in 2011 as compared to

2013and lower as compared to the 2012 years. But in the present year is a good turn over in the past

data far far batter.

Debtors Turnover Ratio

Years 2011 2012 2013

Sales 19245.03 23368.05 23582.74Avg. debtors 1119.49 2011.45 1821.655

33

33.5

34

34.5

35

35.5

36

36.5

37

37.5

Inventory turnover ratio

2011

2012

2013

DTR = Sales / Avg. debtors

5/26/2018 mba

75/85

75 | P a g e

Debtors turnover ratio 17.19times 11.62 times 12.95 times

Interpretation

The debtors ratio is very important for all the companies because the company made its payment

only according when its debtors paid it. It indicates efficiency of the company in management of

account receivables. Here debtors turnover ratio is fluctuating all over the years. It indicate in how

many times the debtors is moving in a particular year in respect to sales. Here it is showing decline in

the current year from the previous year. Which means the collection period is declining or the credit

sales is declining.Company position is year 2011 ,17 times turn over comparative not good for 2013

13 times turnover. But future expansion of the company is batter per performance than batter position.

FINANCIAL STRUCTURE RATIO

Financial structure ratioincludes the relative mix or blending of owners fund and outsiders debt

fund in the total capital employed in the business. It should be noted that equity funds are the prime

funds are supplementary funds and are added at the discretion off the management. Management

0

2

4

6

8

10

12

14

16

18

20

Debtors turnover ratio

2011

2012

2013

5/26/2018 mba

76/85

76 | P a g e

prefers to choose debt only when it helps in enhancing the earning of equity. The debt funds carry

fixed committed interest rate. When debt funds are used to generate ROIgreater then interest cost on

debt, the equity earnings are enhanced, but if the interest cost is higher then include the ROI, it

adversely affects the earnings of owners.

It includes the following ratios

Equity ratio Debt equity ratio Debt ratio Interest coverage ratio

4.5.1 Equity Ratio

Years 2011 2012 2013

Net worth 6685.07 6308.26 5538.46

Total capital employed 12023.63 11647.48 10001.24

ER = Net Worth / total capital employed

5/26/2018 mba

77/85

77 | P a g e

Equity ratio 0.55 0.54 0.55

Interpretation

Equity ratio shows the owners fund in total capital employed. High equity ratio means company is

more relaying on internal funds and less on external debts. All three years ratios are given in table. It

means in every Rs. 1 company have out of that 55% ownership equity fund. It is lower in the year

2012 as compared to other financial years. But this is not lower a equity it most preferable company

high to others.

Debt Equity Ratio

Years 2011 2012 2013

Net worth 6685.07 6308.26 5538.46

Total long term debt 1743.49 1257.65 864.73

DER 3.83 5.02 6.04

0.534

0.536

0.538

0.54

0.542

0.544

0.546

0.548

0.55

0.552

Equity ratio

2011

2012

2013

DER = Total long term debt/ Net Worth

5/26/2018 mba

78/85

78 | P a g e

Interpretation

This ratio indicates the position as debt compared to equity. The general or standard debt equity ratio

is 2:1. it indicates borrowing capacity of organization and emphasis that more the borrowing the more

rate of return is. This ratio states that when company is unable to pay debts the ratio gets higher. Here

the ratio first increasing a future .2011 3.83, 2012 is a 5.02 and 2013 is a 6.04 ratio position is 2 but

company far far batter.

3 Debt Ratio

Years 2011 2012 2013

Long term debt 5410.63 5357.84 4500.55

Total capital employed 12023.63 11647.48 10001.24

DR 0.45 0.46 0.45

0

1

2

3

4

5

6

7

DER

2011

2012

2013

DR = long term debt / Total capital employed

5/26/2018 mba

79/85

79 | P a g e

Interpretation

Debt ratio is the clear indication of whether the company has debtors or not, and if dependent then

how much of it. As mention above, this ratio is moreover fluctuated within these three financial years.

Company is debt 0.45:1 it means that 45% borrowed to other public it is a good position of the

company.

Interest Coverage Ratio

Years 2011 2012 2013

PBIT 2416.67 2886.01 2544.37

Interest 11.91 21.3 15.17

ICR 202.91 135.49 167.72

0.444

0.446

0.448

0.45

0.452

0.454

0.456

0.458

0.46

0.462

DR

2011

2012

2013

ICR = PBIT / Interest

5/26/2018 mba

80/85

80 | P a g e

Interpretation

The ratio shows whether the company has sufficient income to cover its interest requirement by a

wide margin. If it goes higher then it means the company is very healthy to fulfil its interest burden

even if its EBIT decline. This ratio indicates ability to meet current interest & instalment due. In

2011company has not greater ability to pay its interest with compared to PAT. In 2011 the company

has required higher loan.

0

50

100

150

200

250

ICR

2011

2012

2013

5/26/2018 mba

81/85

81 | P a g e

DU-PONT Chart:

ROI (in %)

2011: 16.29

2012: 29.18

2013: 26.36

5/26/2018 mba

82/85

82 | P a g e

_____

Profit Margin (%)

2011-8.91

2012-10.09

2013-9.94

Total Assets

Turnover(times)

2011-1.3

2012-2.36

2013-2.45

EBIT

2011-2416.67

2012-2886.01

2013-2544.37

Total Sales

2011-19245.03

2012-23368.05

2013-23582.74

Sales + Non Operating

Expenses

2011-24238.14

2012-24019.3

2013-19791.38

Operating Expenses

2011-20107.05

2012-19603.44

2013-16446.54

Investments

2011-524.93

2012-675.57

2013-636.76

Net Working Capital

2011-3070.98

2012-3785.51

2013-4080.28

Net Fixed Assets

2011-4130.24

2012-3824.35

2013-3133.07

5/26/2018 mba

83/85

83 | P a g e

___ ___

Balance sheet


I Liabilities

1 EQUITY AND LIABILITIES


(a) Share capital 39.94 39.94 39.94

b) Reserves and surplus 4966.3 4249.89 2916.12


(a) Long term liabilities 302.16 1011.39 1471.04(b) Deferred tax liabilities (Net) 132.41 208.26 246.77

Total Fixed Assets

2011-4130.24

2012-3824.35

2013-3133.07

Accumulated

Depreciation

2011-402.38

2012-1097.34

2013-1141.75

Total Current

Assets

2011-4663.29

2012-3290.3

2013-3009.36

Current Liability +

Provision

2011-6016.71

2012-4341.44

2013-4170.68

5/26/2018 mba

84/85

84 | P a g e

(c) Long - term provisions 30.16 38 35.68


(a) Trade payables 1873.34 2293.17 2073.3

(b) Other current liabilities 887.64 996.2 2898.02

(c) Short - term provisions 1409.7 1052.07 1045.39

Total 9641.65 9888.92 10726.26

II ASSETS


(a) Fixed assets

(i) Tangible assets 1891.76 1743.14 1,612.53

(ii) Intangible assets 1179.22 2042.37 2,467.75

iii) Capital work-in-progress 62.09 38.84 49.96

(b) Long term investments, non- current 614.47 673.96 465.46

c) Long - term loans and advances 780.06 533.64 342.29

d) Other non- current assets 36.44 26.01 16.43

2 Current assets

(a) Current investments 3009.36 3290.3 4,663.29

(b) Inventories 636.76 675.57 524.93

(c) Trade receivables 665 272.31 130.59

(d) Cash and cash equivalents 181.04 76.82 71.52

(e) Short - term loans and advances 553.55 475.6 344.72(f) Other current assets 31.9 40.36 36.79

Total 9641.65 9888.92 10726.26

P&L Account

Particular Mar 2013 Mar 2012 Mar 2011I REVENUE FROM OPERATIONS

(a) Gross sales of products 25474.54 25024.04 20662.39

Less: Excise duty 1891.8 1655.99 1417.36

(b) Other operating revenue 185.37 210.98 152.9

Net revenue from operations 23768.11 23579.03 19397.93

II OTHER INCOME 398.38 364.57 289.62

III TOTAL REVENUE (I + II) 24166.49 23943.6 19687.55

IV EXPENSES:

(a) Cost of materials consumed 17364.86 17365.41 14135.17

(b) Changes in inventories of finished goods and workin-progress 32.8 83.84 24.06

5/26/2018 mba

85/85

85 | P a g e

(c) Employee benefits expenses 820.92 735.52 618.95

(d) Finance costs 11.91 21.3 15.17

(e) Depreciation and amortization expenses 1141.75 1097.34 402.38

(f) Other expenses 2265.05 1943.16 2055.34

Total Expenses 21637.29 21078.89 17202.95

V PROFIT BEFORE EXCEPTIONAL ITEMS

AND TAX (III - IV)

2529.2 2864.71 2484.6

VI EXCEPTIONAL ITEMS 0 0 79.84

VII PROFIT BEFORE TAX (V - VI) 2529.2 2864.71 2404.76

VIII TAX EXPENSES:

(a) Current tax 502.61 569.76 475.76

(b) Minimum alternate tax 15.72 44.67 92.92

(c) Net current tax 486.89 525.09 382.84

(d) Deferred tax 75.85 38.51 94.02

IX PROFIT FOR THE YEAR (VII-VIII) 2118.16 2378.13 1927.9

X BASIC AND DILUTED EARNINGS PER

EQUITY SHARE

106.07 119.09 100.53

mba

Documents