Financial Analysis Submitted to Jawaharlal Nehru Technological University, Hyderabad
In fulfillment of Main Project for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION (MBA) Submitted by xxxxxxxxx H.T.No: 14xxxxxxx
Under the guidance of Mrs.A.Padma MBA(Ph.D),NET,SET,FET
DEPARTMENT OF BUSINESS MANAGEMENT KSHATRIYA COLLEGE OF ENGINEERING (Approved by AICTE, New Delhi and Affiliated to JNTU Hyderabad) 2016
(An ISO 9001:2008 CERTIFIED INSTITUTION) (Approved by AICTE New Delhi and Affiliated to JNTUH, Hyderabad) NH-16, Chepur-Armoor, Dist. Nizamabad 503224 (T.S.) India.Ph:08463 – 253155,253156, 253222. www.kcea.ac.in
email:
[email protected]
CERTIFICATE
Certified that the project report “FINANCIAL ANALYSIS OF AMAR RAJA BATTERIES LIMITED” is the bonafide work of“ERAVATHRI VANI, 14B41E0014” 2nd Year MBA of Kshatriya College of Engineering,Chepur-Armoor, carried out under supervision of Mrs. A. Padma, Head of Department of Business Management during 2014 to 2016
Signature of Head of the Department
Mrs. A. PADMA
Department of Business Management
Admin Office: NH-16, Chepur –Armoor, Nizamabad, (Telangana)503224www.kcea.ac.in
DECLARATION
I
hereby
declare
that
the
work
described
in
this
Project
report
entitled“FINANCIAL ANALYSIS”, which is being submitted by me in fulfillment for the award of degree of Master of Business Administration in the Dept. of Business Management ,Kshatriya College of Engineering, Chepur-Armoor to the Jawaharlal Nehru Technological University Hyderabad, Kukatpally, Hyderabad (A.P.) -500 085, is the result of investigations carried out by me under the Guidance of Mrs. A. PADMA, Head of Department of Business Management. The work is original and has not been submitted in full /partial for any Degree/Diploma of this or any other university or institution.
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Name of the Candidate: xxxxxxxx Hall Ticket No.: 14XXXXXX
ACKNOWLEDGEMENT
I wish to take this opportunity to express my deep sense of gratitude to all the people who have extended their co-operation in various ways during my project work. It is my pleasure to acknowledge the help of all those individuals.
I am very grateful to Mr. RAVI TEJA, a finance manager in “FINANCIAL ANALYSIS OF AMAR RAJA BATTERIES LIMITED”, ‘PANJAGUTTA’ for his timely guidance, support and encouragement in completing my project work.
I express my profound gratitude to my internal guide Mrs. A. PADMA, Head of Dept. of Business Management in Kshatriya College of Engineering, for her sagacious guidance, scholarly advice and the inspirations offered in an amiable and pleasant manner helping me in completing this project successfully.
I render my whole hearted thanks to Prof. M. Venkateshwarlu, Director, Kshatriya College of Engineering for his support and assistance in completion of my project
I am deeply indebted to express my thanks to Dr. M. Lakshmi Narayana, Principal of Kshatriya College of Engineering for his kind co-operation in completion of this project.
I render my whole hearted thanks to Prof. B. Ram Prasad, Dean, Kshatriya College of Engineering for his support in completion of my project.
I express my profound gratitude to Mrs. A. Padma, Head of the Department of Business Management, Kshatriya College of Engineering, for her support and encouragement in completing my project work.
I avail this opportunity to express my gratitude to Management, all faculty members of Department of Business Management and librarian of Kshatriya College of Engineering
I would like to express my sincere thanks to my parents my friends for there and moral support in finishing my project and all those who helped me directly and indirectly in completing my project work.
ERAVATHRI VANI
ABSTRACT
This project report entitled to “A Study On Financial Performance Of Amar Raja Batteries Limited” at Hyderabad. The main objective of the study is to analyze the financial performance of a company. It is the process of identifying the financial strength and weakness of the firm properly by establishing relationship between the items in balance sheet and profit and loss account. The details regarding the history and finance details of the company were collected through discussions with the company officers. Secondary data was based on annual reports of 2011-2015. The tool used for this study is Ratio Analysis. Charts and tables used for better understanding. Through Ratio Analysis the company should understand the Profitability, Liquidity, Leverage, Turnover positions of the firm. The company is following Liquidity ratios effectively because it is following that all the Current Ratios are greater than the standard 2:1 and Quick Ratios are greater than the standard 1:1. The firm is maintaining a low cash balance so that indicates all the cash payments are done. The Gross Profit Ratio, Net Profit Ratio is showing the increasing trends. So, finally the Profitability of the firm is increasing. So we can say that financial performance of the firm is very good and they will increase their business year by year by expanding their branches.
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TABLE OF CONTENTS
CONTENT
PAGE NO
Abstract
i
Index
ii - vii
List of Tables
viii
List of Charts
ix
I Chapter Introduction
1-3
1.1 Importance of Finance
1
1.2 Objectives of Finance Analysis
2
1.3 Significance of Financial Analysis
2
1.4 Advantages of Financial Analysis
3
1.5 Limitations of Financial Analysis
3
1.6 Data Collection Methods 1.6.1 Primary Data
3
1.6.2 Secondary Data
3
ii
II Chapter
Review of Literature
4 - 13
III Chapter
Company & Industry Profile
14 - 21
3.1 History of Company
IV Chapter
14
3.1.1 Culture and Environment
14
3.1.2 Quality Policy
15
3.1.3 Research and Development
15
3.2 Future plan of Action
16
3.3 Awards for the Company
17
3.4 Amar Raja Group of Companies
17
3.5 Industrial Battery Division (IBD)
18
3.6 Automatic Battery Division (ABD)
19
3.7 Major Users
20
3.8 Production Process
21
Theoretical Frame Work
23 - 37
4.1 Parties Interested in Financial Analysis
23
4.2 Methods of Analysis
23
4.2.1 Nature of Ratio Analysis
24
4.2.2 Standards of Comparison
24
iii
4.2.3 Time Series Analysis
25
4.2.4 Cross Sectional Analysis
25
4.2.5 Industry Analysis
25
4.3 Types of Ratios
26
Liquidity Ratios
26
4.3.1 Current Ratio
27
4.3.2 Quick Ratio
27
4.3.3 Cash Ratio
28
4.4 Leverage Ratios
28
4.4.1 Debt Equity Ratio
29
4.4.2 Debt Ratio
30
4.4.3 Interest Coverage Ratio
30
4.4.4 Proprietary Ratio
31
4.4.5 Capital Gearing Ratio
31
4.5 Activity Ratios
31
4.5.1 Total Capital Turnover Ratio
32
4.5.2 Working Capital Turnover
33
4.5.3 Fixed Assets Turnover Ratio
33
iv
4.5.4 Stock Turnover Ratio 4.6 Profitability Ratios
V Chapter
33 34
4.6.1 Gross Profit Ratio
35
4.6.2 Operating Profit Ratio
36
4.6.3 Net Profit Ratio
36
4.6.4 Return on Income
37
4.6.5 Earning Per Share
37
4.6.6 Operating Expenses Ratio
37
Data Analysis and Interpretation
38 - 72
Vertical and Horizontal Analysis
38
5.1 Liquidity Ratios
39
5.1.1 Current Ratio
39
5.1.2 Quick Ratio
41
5.1.3 Cash Ratio
43
5.1.4 Net Working Capital
45
v
5.2 Leverage Ratios
47
5.2.1 Debt Ratio
47
5.2.2 Debt Equity Ratio
49
5.2.3 Interest Coverage Ratio
51
5.3 Activity Ratios
53
5.3.1 Inventory Turnover Ratio
53
5.3.2 Debtors Turnover Ratio
55
5.3.3 Fixed Assets Turnover Ratio
57
5.3.4 Current Assets Turnover Ratio
59
5.3.5 Total Assets Turnover Ratio
61
5.4 Profitability Ratios
63
5.4.1 Gross Profit Ratio
63
5.4.2 Net Profit Ratio
65
5.4.3 Return on Investment
67
5.4.4 Return on Equity Shareholders
69
Vi
VI Chapter
Findings, Suggestions and Conclusion
71 - 74
Findings
71
Suggestions
73
Conclusions
74
Bibliography
75
vii
LIST OF TABLES S.NO
Table Name
Table No
PageNo
1
Calculation of Current Ratio
1
39
2
Calculation of Quick Ratio
2
41
3
Calculation of Cash Ratio
3
43
4
Calculation of Net Working Capital
4
45
5
Calculation of Debt Ratio
5
47
6
Calculation of Debt Equity Ratio
6
49
7
Calculation of Interest Coverage Ratio
7
51
8
Calculation of Inventory Turnover Ratio
8
53
9
Calculation of Debtors Turnover Ratio
9
55
10
Calculation of Fixed Assets Turnover Ratio
10
57
11
Calculation of Current Assets Turnover Ratio 11
59
12
Calculation of Total Assets Turnover Ratio
12
61
13
Calculation of Gross Profit Ratio
13
63
14
Calculation of Net Profit Ratio
14
65
15
Calculation of Return On Investment
15
67
16
Calculation of Equity on Equity Shareholders 16
69
viii
LIST OF CHARTS S.NO
Charts Names
Chart No
1
Current Ratio
1
40
2
Quick Ratio
2
42
3
Cash Ratio
3
44
4
Net Working Capital
4
46
5
Debt Ratio
5
48
6
Debt Equity Ratio
6
50
7
Interest Coverage Ratio
7
52
8
Inventory Turnover Ratio
8
54
9
Debtors Turnover Ratio
9
56
10
Fixed Assets Turnover Ratio
10
58
11
Current Assets Turnover Ratio
11
60
12
Total Assets Turnover Ratio
12
62
13
Gross Profit Ratio
13
64
14
Net Profit Ratio
14
66
15
Return On Investment
15
68
16
Return On Equity Shareholders
16
70
ix
Page No
INTRODUCTION
Financial Management is the specific area of finance dealing with the financialdecision corporations make, and the tools and analysis used to make the decisions. The discipline as a whole may be divided between long-term and short-term decisions and techniques. Both share the same goal of enhancing firm value by ensuring that return on capital exceeds cost of capital, without taking excessive financial risks.
1.1 IMPORTANCE OF FINANCE Finance is important to an organization as the firm has to know how viable it is and balance profit with costs. The Role of the Finance Department can be summarized: Prepare and create financial accounts –such as Trading, Profit and Loss Account and theBalance Sheet. Keep and maintain financial records –sales figures and records of expenditure would be heldby the Finance department and used by other departments also. Prepare and plan internal financial information –this would mainly be performed in the caseof a budget, which is a financial plan and can help managers take corrective action. Analyze current financial performance –how the firm has done in trading or expenses wouldbe analyzed primarily using ratio analysis tools. Pay creditors –Finance Department would ensure that bills are paid to people the firm owesmoney to. Pay employees wages and salaries –running the payroll system is another important task forFinance to undertake. Employees have to be paid!
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1.2 Objectives of the financial analysis Analysis of financial statements may be made for a particular purpose in view. 1. To find out the financial stability and soundness of the business enterprise. 2. To assess and evaluate the earning capacity of the business 3. To estimate and evaluate the fixed assets, stock etc., of the concern. 4. To estimate and determine the possibilities of future growth of business. 5. To assess and evaluate the firm’s capacity and ability to repay short and long term loansParties interested in financial analysis
1.3Significance of financial analysis Financial analysis serves the following purpose: To know the operational efficiency of the business: The financial analysis enables the management to find out the overall efficiency of the firm. This will enable the management to locate the weak Spots of the business and take necessary remedial action. Helpful in measuring the solvency of the firm: The financial analysis helps the decision makers in taking appropriate decisions for strengthening the short-term as well as long-term solvency of the firm. Comparison of past and present results: Financial statements of the previous years can be compared and the trend regarding various expenses, purchases, sales, gross profit and net profit can be ascertained. Helps in measuring the profitability: Financial statements show the gross profit, & net profit. Inter‐firm comparison: The financial analysis makes it easy to make inter-firm comparison. This comparison can also be made for various time periods.
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Bankruptcy and Failure: Financial statement analysis is significant tool in predicting the bankruptcy and the failure of the business enterprise. Financial statement analysis accomplishes this through the evaluation of the solvency position.
1.4 Advantages of Financial Analysis: Ratios help compare current performance with previous records. Ratios help compare a firm’s performance with similar competitors. Ratios help monitor and identify issues that can be highlighted and resolved.
1.5 Limitations of Financial Analysis: Ratio analysis information is historic – it is not current. Ratio analysis does not take into account external factors such as a worldwide recession. Ratio analysis does not measure the human element of a firm.
1.6 Data Collection Methods Primary Data Information collected from internal guide and finance manager. Primary data is first-hand information. Secondary Data Company balance sheet and profit and loss account. Secondary data is second hand information
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Gautam U.s (2005) revealed that financial statements is generally explained as financial information which is the information relating to the financial position of any firm in a capsule form and also captures and report on four key business activities planning, financing, investing and operating activities. Analysis of financial statements provides the essential concepts and tools needed by analysis who make decisions on the basis of information found in the statements
Herbert Mayo (1978) disclosed that financial analysis can also use percentage analysis which involves reducing a series of figures as a percentage of some base amount. For example a group of items can be expresses as a percentage of net income. When proportionate changes in the same figure over a given period expressed as a percentage is known as horizontal analysis. Vertical or common size analysis reduces all items on a statement a common size as a percentage of same base value which assets in comparability with other companies of different sizes. As a result all income statement items are divided by sales, all the balance sheet items are divided by total assets.
Victor.L.Bernard (1984) according to him there are mainly three steps for the financial statement analysis one is identification of the users purpose, second is identification of data source which part of the annual report on other information is required to be analyzed to suit the purpose, third is selecting the tecniques to be used for such analysis. As such analysis is purpose it may be restricted to any particular position of the available financial statement taking care to ensure objectivity and unbiasedness. It covers the study of relationships with a set of financial statements at a point of time and with trends in them overtime. It covers a study of some comparable firms at particular time or of a particular firm over a period of time or may cover both.
Ben Mc Clure (1973) explaines to understand the value of a company, investors have to look a its financial position. Fortunately this is not difficult as its sounds. If you borrow 4
money from a bank you have to list the value of all your significant assets as well as all your significant liabilities. Your bank uses this information to assess the strength of your financial position it looks at the quality of the assets. Such as your car and house and places a conservation valuation upon them. To make all this to know the financial analysis to be done. Evaluating the financial position of a listed company is quite similar except investors need to tale another step and consider financial position in relation to market value.
Mike Periu (1986) discussed about the financial analysis by five key elements. Financial health is one of the business indicators of the business potential for long term growth. Elements are revenues, revenues are probably your business main source of cash. Profits, if you can’t produce quality profits consistently your business may not survive in the long run. Operation efficiency, it measures how well you are using the company’s resources a lack of operational efficiency leads to smaller profits and weaker profits. Capital efficiency and solvency, it is an interest to lenders and investors. Liquidity, it is the analysis which will addresses your ability to generate sufficient cash to cover cash expenses. No amount of revenue growth or profits can compensate for poor liquidity.
Jeremy Slaughter (1974) explains the evaluation the performance of a business can be challenging and requires a systematic collection and review of financial information. Financial statements provide this summary of collected data. Public companies also have a statement of equity. Reviewing and analyzing financial statements provide the user with trends and indicators to compare operations and management. Financial analysis is used to evaluate trends set financial policy to build long terms plans for business activity and identify projects or companies for investment. This is done through the synthesis of financial numbers and data. One of the most common ways to analyze financial data is to calculate ratios from the data to compare against those of other companies or against the companies own historical performance.
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Osmand vitez (1989) discussed about the financial analysis that financial statements are usually the final output of a company’s accounting operations. These statements contains information relating to the revenues, expenses, assets, liabilities and retained earnings of the business. Business owners often pay close attention to this information. Since the statements provide detailed information about the companies operational performance. Many business owners and managers use specific analysis tools to closely review their company financial statements for decision making purpose. A traditional financial statement analysis tppl is financial ratios. These ratios take information from the company financial statements and calculate economic indicators for compares to another company or the industry standard.
Renee Booker (1991) explained writing a companies detailed financial analysis can be necessary to determine whether to invest in the company. There is no specific method for doing so and presentation styles and vary but key components should be included in any financial analysis. Only after reviewing all the components can conclusion be drawn regarding the company’s financial health. Financial health is one of the best indicators of your business potential for long term growth.
Jean.L.Heck (1985) reveled financial analysis can be applied in a wide variety of situations to give business managers the information they need to make critical decisions. Finance is the language of business. Business goals and objective are set in financial terms and their outcomes are measured in financial terms. Finally finance involves analyzing the data contained in the financial statements in order to provide valuable information for most decisions. Another part of financial analysis involves using the numerical data contained in company statements to uncover patterns of activity that may not be apparent on the surface.
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Philip Cooley (1978) in his point of view, financial analysis is of five types horizontal analysis, vertical analysis, short term analysis, multi company comparison, industry comparison. Financial analysis is one of the key tools needed by the managers of a business to examine how their organization is performing. For this reason they are constantly querying the financial analyst about the profitability, cash flows and other financial aspects of their business. The analysis of financial statement consists of a study relationship and trends to determine whether or not the financial position of the concern and its operating efficiency have been satisfactory.
Smita Mishra (1988) given the following points highlights the four important types of financial analysis. First is on the basis of material used and it is subdivided into two types external analysis and internal analysis. Second is on the basis of modus operandi and it is subdivided into two types horizontal and vertical analysis. Third is on the basis of entities involved and is subdivided into two types cross sectional or inter firm analysis and time series or intra firm. Fourth is on the basis of time horizon or objective of analysis and is also divided into two types short term analysis and long term analysis.
Matt.H.Evans (1977) explained financial analysis is the examination of financial information to reach business decisions. This analysis typically results in the reallocation of resources to or from a business or a specific internal operation. This type of analysis applies particularly well to the following situations investment decisions by external investors and internal investors. The outcome of financial analysis may be any of these decisions. Whether to invest a business and at what price per share, whether to tend money to a business and if so what terms to offer, whether to invest internally in an asset or working capital and how to finance the acquisition.
Benjamin Graham, David Dood (1934) approved referred to as fundamental analysis of the statements which are provided by the financial analysis and it includes economic 7
analysis, industry analysis, company analysis they mainly describes about the security analysis. For that reason they used to use these financial analysis is mainly used to take the decisions so it is very useful in any type of business. It helps to compare the data with other companies for knowing their position in the market level that deals with the competitors.
Pamela.P.Peterson (1982) determines the financial analysis a company health and stability. The data gives you an initiative understanding of how the company conducts business. Stock holders can find out how management employs resources and whether they use them properly. Governments are regulatory authorities use financial statements to determine the legality of a company’s fiscal decisions and whether the firm is following correct accounting procedure. Finally government agencies such as the internal revenue service, use financial statement analysis to decide the correct taxation for the company.
KD Garg (2000) according to him to meet their financial reporting obligations and to assist in strategic decision making, firms prepare financial statements. However the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. Firms employ financial analysis to read, compare and interpret the data as necessary for quant analysis and decision making. In a technical sense, financial statement summarize the accounting process and provide a tabulation of account titles and amounts of money.
Meigs and Meigs (2003) stated that the rate of return on investment is a test of management’s efficiency in using available resources. This review is useful to know the exact position of the performance of an entity. Analysis can do this by dividing debt which comes from balance sheet by net income which comes from income statement.
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Likewise return on assets and return on equity compare company net income found on the income statement with assets and stockholders equity as found on the balance sheet.
AKpan (2003) describes about the financial analysis that takes and helps in decision making. Each financial statements provides multiple years of data used to get analysis can track performance measures across financial statements. Using several different methods for financial statement analysis including horizontal and vertical analysis. That also includes calculation of ratios and this is done through the synthesis of financial numbers and data.
Harvey.B.Lermack (1981) explained financial analysis an art said Philadelphia university assistant professor of management. Experienced managers, investors and analysis collect industry information overtime that allow them to perform financial analysis of a company’s more thoroughly. There are many steps to do financial analysis as follows. Collect the company’s financial statements from last three to five years. Analyze these statements and scan them in order to look for large movements in specific items from one year to the next. Make sure to review the financial statements notes. Analyze the balance sheet to see if there are large changes in the company’s assets, liabilities and equity. Examine the income statement to identify trends over time. Next, evaluate the business shareholders equity statement. Analyze the company’s cash flow statement. Calculate financial ratios. Then, gather the company’s key competitor’s data. Review the market data of the business stock price as well as the price to earnings ratio. Review the dividend payout ratio. Now, you can evaluate all of the data you generated. Congratulations, you did it you successfully performed a financial analysis on a business.
Anthony Robert N (1984) revealed financial statement analysis involves the identification of the following items for a company’s financial statements over a series of reporting periods. Financial statement analysis is an exceptionally powerful tool for a 9
variety of users of financial statements each having different objectives in learning about the financial circumstances of the entity. There are a number of users of a financial statement analysis. They are creditors, investors, management, and regulatory authorities. There are several general categories of ratios. Each designed to examine a different aspects of a company’s performance.
Diamond (2006) explains all watchful business owners have an innate sense of how well their business is doing. This review is useful to know the exact position of the performance of an entity. Finally, finance involves analyzing the data contained in the financial statements in order to provide valuable information for most decisions. So finance is called as an language of business.
Johan N Myer (1962) explains financial analysis refers to an assessment of the viability, stability and profitability of a business, sub business or project. It is performed by professionals who prepare reports using ratios that make use of information taken from financial statements and other reports. These reports are usually presented to top management as one of their bases in making financial decisions. These financial statements helps the investors also. These statements consists of a study relationship and trends to determine whether or not the financial position of the concern and its efficiency have been satisfactory.
JA Ohison (1999) was defined as a written report that summarizes the financial status of organization for a stated period of time. It includes income statements and balance sheet or statement of financial position describing the flow of resources, profit and loss and the distribution of retention of profit. To intelligently understand analyze and interpret financial statement you must took for the right information to know where to locate it and act on it.
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Johnson.R.W (1971) revealed the financial analysis may determine if a business will continue or discontinue its main operation or part of its business. Make or purchase certain materials in the manufacture of its product. Acquire or rent/lease certain machineries an equipment in the production of its goods. Issue stocks or negotiate for a bank loan to increase its working capital. Make decisions regarding investing or lending capital. Make other decisions that allow management make an informed selection on various alternatives in the conduct of its business.
Guthmann H G (1953) explains analysis of the data on ratio. Ratio analysis of financial statements is the study of relationship among various financial factors in a business as disclosed by a single set of financial statements and a study of trend of these factors as shown in a series of statements.
Meignsetal (2001) describes financial statements simply means a declaration of what is believed to be true and which communicated in terms of monetary unit. It describes certain attributes of a company that is considered to fairly represent its financial activites. It is a process of reviewing and analyzing a company’s financial statements to make better economic decisions. These statements includes the income statements, balance sheet, statement of cash flow and statement of changes in equity. Financial statement analysis is a method or process involving specific technique.
Beckman, Theodore N (1992) revealed the review of the growing literature relating corporate environmental performance to financial performance. Financial analysis is the process of identifying the strengths and weakness of the firm with the help of accounting information provided in the profit and loss and balance sheet. It is the process of the evaluation of relationship between component parts of financial statements to obtain a better understanding of the firm’s position and performance.
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Dauton cart A (1991) explains ratio analysis is a commonly used analytical tool for verifying the performance of a firm. While ratios are easy to compute which in part explains their wide appeal, their interpretation is problematic especially when two or more ratios provide conflicting signals. Indeed ratio analysis is often criticized on the grounds of subjectivity that is the analyst must pick and choose ratios in order to assess the overall performance of a firm.
Pandey, I.M (2005) describes profitability is the ability of an entity to earn income. It can be assessed by computing various relevant measures including the ratio of net sales to assets the rate earned on total assets etc. profit only comes when there is a accurate rate of return that will be based on analysis. While ratios are easy to compute which in part explains their wide appeal, their interpretation is problematic especially when two or more ratios provide conflicting signals.
Gestenberg, Charles W (1962) describes an analysis of the data on ratios. Ratio analysis is one of the techniques of financial analysis to evaluate the financial condition and performance of a business concern. Ratio analysis is a form of financial statement analysis that is used to obtain a quick indication of the firm’s financial performance in several key areas. The computation of ratios facilitates the comparison of firms which differs in size ratios can be used to a firms financial performance with industry averages.
Rosemary Peavler (1988) revealed that there are number of techniques you can use to perform financial analysis for your business firm, depending on what you are trying to find out. The financial statements you want to use in your analysis are balance sheet, income statements and statement of cash flows. First you need to know how to prepare financial statements after learning preparation, financial analysis comes next. Here are some techniques used to analyze the financial statements.
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1.Trend Analysis:Historical analysis is based on historical data form the firm’s financial statements and forecasted data from the firms proforma or forward looking financial statements. 2. Common Size financial statement analysis: Financial statement analysis is analyzing the balance sheet and income statements using percentages. All income statement line items are stated as percentage of sales. All balance sheet line items are stated as total assets. 3. Percentage change financial statement analysis: When you use these form of analysis, you calculate growth rate for all income statement items and balance sheet accounts relative to a base year. 4. Bench marking analysis: It is also called as industry analysis. Bench marking involves comparing one company to other companies in the same industry in order to see how one company is performing financially better than the other company.
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COMPANY PROFILE 3.1 History of Company Amara Raja Batteries (ARBL) incorporated under the companies Act, 1956 in 13th February 1985, and converted into public Limited Company on 6th September 1990. The chairman and Managing Director of the company is “Sri Gala Ramachandra Naidu”, ARBL is a first company in India, which manufactures Values regulated Lead Acid (VRLA) Batteries. The main objectives of the company are a manufacturing of good quality of “Sealed Maintenance Free” (SMF) acid batteries.
The company is setting up to Rs.1, 920 lakhs plant is in 185 acres in Karakambadi village,Renigunta Mandal. The project site is notified under “B” category. The company has the clear-cut policy of direct selling without any intermediate. So they have set up six branches and are operated by corporate operations office located in Chennai. The company has virtual monopoly in higher A.H. (Amp Hour) rating Market its product VRLA. It is also having the facility for industrial and automotive batteries. Amara Raja is 5 ‘S ’Company and its aim are to improve the work place environment by using 5‘S techniques which is A systematic and rational approach to workplace organization and methodical house keeping with a sense of purpose, consisting of the following five elements
3.1.1 Culture and Environment
Amar Raja is putting a number of HRD initiatives to foster a spirit of togetherness and a culture of meritocracy. Involving employees at all levels in building organizational support plans and in evolving our vision for the organization. ARBL encourages initiative and growth of young talent allows the organization to develop innovation solution and ideas.
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Benchmark pollution control measures, energy conversation measures, waste reduction schemes, massive green belt development programs, employee health monitoring and industrial safety programs have helped ARBL to take further environment management program. Amar Raja has now targeted to secure the ISO 14001 certification 3.1.2 Quality Policy
ARBL’s main aim is to achieve customer satisfaction through the collective commitment of employees in design; manufacture and marketing of reliable power systems, batteries, allied products and services. To accomplish above, ARBL focus on Establishing superior specifications for our products and processes. Employing state-of-the-art technologies and robust design principles. Striving for continuous improvements in process and product quality. Implementing methods and techniques to monitor quality levels. Providing prompt after sales service.
3.1.3 Research and Development
Specific areas in which the company carries out R&D are; New product development. Process technology up gradation. Application engineering for new market place. Quality improvement. Benefits derived as a result of above R&D, Developed 4v/200 AH batteries. 15
Design optimization of higher AH batteries for DOT application. Design optimization of batteries 92v/1285 AH for TL/AC-Railway application. Formation cycle optimization results in reduced duration and rejection. Chemist curing cycle optimization. Manufacture of automobile battery for four-wheeler vehicles
3.2 FUTURE PLAN OF ACTION Commercialization of motorcycle batteries. Development of new range high integrity VRLA cell design. Establishment of product for new application segment. Studies on paste additives to enhance the battery performance. In-depth evaluation of metal surface treatment chemical to reduce the process cycle time. Validating alternative grades of propylene to conserve energy and to improve productivity. MILE STONES YEAR
Mile stone
1997
100 crores turnover
1997
ISO-9001 Accreditation
1999
S-9000 Accreditation
2002
SO-14001 Certification
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3.3 AWARDS
“The spirit of Excellence”- Awarded by academy of fine arts, Tirupati. “Best Entrepreneur of the year 1998”-awarded by Hyderabad Management Association. “Industrial Economist Business Excellence Award – 1991”- Awarded by the industrial Economist, Chennai. “Excellence Award”-by institution of economic studies (ES), New Delhi. “Udyog Rattan Award”- by institution of economic studies, New Delhi. “QI CERTIFICATE” –2002 - By FORD Company
3.4 AMARA RAJA GROUP OF COMPANIES
AMARA RAJA POWER SYSTEMS PRIVATE Ltd. (ARPSL), Karakambadi, Tirupati. MANGAL PRECISION PRODUCTS PRIVATE Ltd1. (MPPL1), Karakambadi, Tirupati. MANGAL PRECISION PRODUCTS PRIVATE Ltd2. (MPPL2), Petamitta, Chittoor. AMARA RAJA ELECTRONICS PRIVATE LIMITED (AREPL), Dighavamgham, Chittoor. GALLA FOODS PRIVATE LIMITED (GFPL), Puthalapattu Mandal, Chittoor .
This ratio is calculated by dividing sales in to current assets. This ratio expressed the number of times current assets are being turn over in stated period. This ratio shows how well the current assets are being used in business. The higher ratio is showing that better utilization of the current assets another a low ratio indicated that current assets are not being efficiently utilized.
3.5 INDUSTRIAL BATTERY DIVISION (IBD)
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Amara Raja has become the benchmark in the manufacturer of industrial batteries. India is one of the largest and fastest growth markets for industrial batteries in the world. Amara Raja is leading in the front, with an 80% market share is stand by VRAL batteries point of view. It is also having the facility for production plastic components. ARBL id the first company in India to manufacture VRLA (SMF) Batteries. The initial investment of the company has Rs.1920 lakhs; the total land is around 18 acres in Karambadi village, Renigunta Mandal. The project site is notified under ‘B’ category.
Capacity The capacity per the year 2005-2006 of IBD is 3, 70,000 cells per annum.
Products Amara Raja being the first entrant in this industry and has the privilege of pioneering VRLA technology in India. Amara Raja has established itself as a reliable supplier of high quality products to major segments like Telecom, Railways and power. Plate Preparation Using lead oxide production in earlier stage positive and negative paste is prepared with addition of sulphuric acid and water. These pastes are applied to respective grids using industrial fasting machines. Call Assembly Here positive and negative grids are separated by a sheet of fiber glass mat bush bars are welded and as assembled into a jar or container to form battery cells. Then these cells are assembled according to the customer’s specification into battery sets or systems.
Formation
18
In this process cells are filled with the electrolyte (surphuric acid) and then the set is charged and discharged repeatedly, after final charging the battery comes out ready to be used. Competitors The Major competitors for Amara Raja Batteries are “Exude industries Ltd, and GNB”.
3.6 AUTOMOTIVE BATTERY DIVISION (ABD) ARBL has inaugurated its new automotive plant at Karakambadi in Tirupati on September 24th, 2001. This plan is a part of the most completely integrated battery manufacturing facility in India with all critical components, including plastics sourced inhouse from existing facilities on site. In this project, Amara Raja’s strategic alliance partners JohnsonControl Inc., of USA have closely worked technology and plant engineering. It is also having the facility for producing plastic components required for automotive batteries.
Capacity With an existing production capacity of 5 lakhs units of automotive batteries, the new Greenfield plant will now be able to produce 1 million batteries per annum. This is the first phase in the enhancement of Amara Raja’s production capacity, for this the company has invested Rs.45 crores and the next phase, at an additional cost of Rs.25 crores, for this the production capacity will be increase to 2 million units and the company has estimated to complete around 3 years, after that ARBL will become the single largest battery of manufacturer in Asia. The fiscal year 2005-2006’s capacity Of ABD is 2.2 million numbers of batteries per year.
Products The products of ABD are Amaron Hi-way 19
Amaron Harvest Amaron shield Amaron Highlife
The plastic products of ABD are “jars” and “jar covers”.
Customers ARBL has prestigious OEM (Original Equipment Manufacture) clients like FORD, GENERALMOTORS,
DAEWOO
MOTORS,
MERCEDES
BENZ,
DAIMLER
CHRYSLER, MARUTI UDYOG LTD., premier Auto Ltd., and recent acquired a preference supplier alliance with ASHOK LEYLAND, HINDUSTAN MOTORS, TELCO, MAHINDRA & MAHINDRA and SWARAJ MAZDA. COMPETITORS EXIDE PRESTOLITE AMCO.
3.7 MAJOR USERS Railways
Train lighting air conditioning, diesel engine starting, signaling systems, control systems, emergency breaking systems, and telecommunications. Tele Communication Central office power plants, microwave repeaters station, RAX in public building, emergency lighting system at airports, fire alarm system etc., Power Systems Switch gear control systems, powerhouse control systems, rural street lighting etc.
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UPS System Backup power to computers in progress control systems in industry etc. Traction Forklift trucks, earth moving machinery, mining locomotives and road vehicles etc. Petro Chemicals Off-share and no-shore oil exploration lighting systems, security systems etc. Defence Defence communication, aircraft and helicopter ground starting, stationary and mobile diesel engine starting etc.
3.8 PRODUCTION PROCESS
The process for the production of lead acid batteries consists essentially of five operations described below Grid Casting Different sizes of moulds are used to get the required size of grids.In the process grids to hold the active materials are made. Battery grids are produced using microprocessorcasting machines. Plate Preparation Using lead oxide production in earlier stage positive and negative paste is prepared with addition of sulphuric acid and water. These pastes are applied to respective grids using industrial fasting machines. Call Assembly Here positive and negative grids are separated by a sheet of fiber glass mat bush bars are welded and as assembled into a jar or container to form battery cells. Then these cells are assembled according to the customer’s specification into battery sets or systems.
21
Formation In this process cells are filled with the electrolyte (surphuric acid) and then the set is charged and discharged repeatedly, after final charging the battery comes out ready to be used. Testing and Inspection Testing the battery is discharged to the customer it is tested for quality specifications.
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4.1 PARTIES INTERESTED IN FINANCIAL ANALYSIS
The users of financial analysis can be divided into two broad groups. Internal users Financial executives Top management External users Investors Creditor. Workers Customers Government Public Researchers 4.2 METHODS OF ANALYSIS:
A financial analyst can adopt the following tools for analysis of the financial statements. These are also termed as methods of financial analysis. Comparative statement analysis Common-size statement analysis Trend analysis Funds flow analysis Ratio analysis
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4.2.1Nature of Ratio Analysis
Ratio Analysis is a powerful tool of financial analysis. A ratio is defined as "the indicated quotient of mathematical expression" and as "the relationship between two or more things". A ratio is used as benchmark for evaluating the financial position and performance of the firm. The relationship between two accounting figures, expressed mathematically, is known as a financial ratio. Ratio helps to summarizes large quantities of financial data and to make qualitative judgment about the firm's financial performance.
The persons interested in the analysis of financial statements can be grouped under three head owners (or) investors who are desired primarily a basis for estimating earning capacity. Creditors who are concerned primarily with Liquidity and ability to pay interest and redeem loan within a specified period. Management is interested in evolving analytical tools that will measure costs, efficiency, liquidity and profitability with a view to make intelligent decisions.
4.2.2Standards of Comparison
The ratio analysis involves comparison for an useful interpretation of the financial statements. A single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with some standard. Standards of comparison are: Past Ratios Competitor's Ratios Industry Ratios Projected Ratios Past Ratios: Ratios calculated from the past financial statements of the same firm. Competitor's Ratios: Ratios of some selected firms, especially the most progressive andsuccessful competitor at the same point in time. 24
Industry Ratios: Ratios of the industry to which the firm belongs. Projected Ratios: Ratios developed using the projected financial statements of the same firm.
4.2.3 Time Series Analysis
The easiest way to evaluate the performance of a firm is to compare its present ratios with past ratios. When financial ratios over a period of time are compared, it is known as the time series analysis or trend analysis. It gives an indication of the direction of change and reflects whether the firm's financial performance has improved, deteriorated or remind constant over time.
4.2.4 Cross Sectional Analysis
Another way to comparison is to compare ratios of one firm with some selected firms in the industry at the same point in time. This kind of comparison is known as the crosssectional analysis. It is more useful to compare the firm's ratios with ratios of a few carefully selected competitors, who have similar operations.
4.2.5 Industry Analysis
To determine the financial conditions and performance of a firm. Its ratio may be compared with average ratios of the industry of which the firm is a member. This type of analysis is known as industry analysis and also it helps to ascertain the financial standing and capability of the firm & other firms in the industry. Industry ratios are important standards in view of the fact that each industry has its characteristics which influence the financial and operating relationships.
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4.3 TYPES OF RATIOS
Management is interested in evaluating every aspect of firm's performance. In view of the requirement of the various users of ratios, we may classify them into following four important categories: Liquidity Ratio Leverage Ratio Activity Ratio Profitability Ratio Liquidity Ratio It is essential for a firm to be able to meet its obligations as they become due. Liquidity Ratios help in establishing a relationship between cast and other current assets to current obligations to provide a quick measure of liquidity. A firm should ensure that it does not suffer from lack of liquidity and also that it does not have excess liquidity. A very high degree of liquidity is also bad, idle assets earn nothing. The firm's funds will be unnecessarily tied up in current assets. Therefore it is necessary to strike a proper balance between high liquidity. Liquidity ratios can be divided into three types: Current Ratio Quick Ratio Cash Ratio
4.3.1 Current Ratio
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Current ratio is an acceptable measure of firm’s short-term solvency Current assets includes cash within a year, such as marketable securities, debtors and inventors. Prepaid expenses are also included in current assets as they represent the payments that will not made by the firm in future. All obligations maturing within a year are included in current liabilities. These include creditors, bills payable, accrued expenses, short-term bank loan, income-tax liability in the current year. The current ratio is a measure of the firm's short term solvency. It indicated the availability of current assets in rupees for every one rupee of current liability. A current ratio of 2:1 is considered satisfactory. The higher the current ratio, the greater the margin of safety; the larger the amount of current assets in relation to current liabilities, the more the firm's ability to meet its obligations. It is a cured -and -quick measure of the firm's liquidity. Current ratio is calculated by dividing current assets and current liabilities. Current Assets Current Ratio = ---------------------------Current Liabilities 4.3.2 Quick Ratio
Quick Ratio establishes a relationship between quick or liquid assets and current liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value. Cash is the most liquid asset, other assets that are considered to be relatively liquid asset and included in quick assets are debtors and bills receivables and marketable securities (temporary quoted investments). Generally, a quick ratio of 1:1 is considered to represent a satisfactory current financial condition. Quick ratio is a more penetrating test of liquidity than the current ratio, yet it should be used cautiously. A company with a high value of quick ratio can suffer from the shortage of funds if it has slow- paying, doubtful and long duration outstanding debtors. A low quick ratio may really be prospering and paying its current obligation in time. Current Assets – Inventories Quick Ratio = -------------------------------------------27
Current Liabilities
4.3.3 Cash Ratio
Cash is the most liquid asset; a financial analyst may examine Cash Ratio and its equivalent current liabilities. Cash and Bank balances and short-term marketable securities are the most liquid assets of a firm, financial analyst stays look at cash ratio. Trade investment is marketable securities of equivalent of cash. If the company carries a small amount of cash, there is nothing to be worried about the lack of cash if the company has reserves borrowing power. Cash Ratio is perhaps the most stringent Measure of liquidity. Indeed, one can argue that it is overly stringent. Lack of immediate cash may not matter if the firm stretch its payments or borrow money at short notice. Cash and Bank balances Cash Ratio = ------------------------------------Current Liabilities
4.4 LEVERAGE RATIOS
Financial leverage refers to the use of debt finance while debt capital is a cheaper source of finance: it is also a riskier source of finance. It helps in assessing the risk arising from the use of debt capital. Two types of ratios are commonly used to analyze financial leverage. Structural Ratios & Coverage Ratios Structural Ratios are based on the proportions of debt and equity in the financial structure of firm. Coverage Ratios shows the relationship between Debt Servicing, Commitments
28
and the sources for meeting these burdens. The short-term creditors like bankers and suppliers of raw material are more concerned with the firm's current debt-paying ability. On the other hand, long-term creditors like debenture holders, financial institutions are more concerned with the firm's long-term financial strength. To judge the long-term financial position of firm, financial leverage ratios are calculated. These ratios indicated mix of funds provided by owners and lenders. There should be an appropriate mix of Debt and owner's equity in financing the firm's assets. The process of magnifying the shareholder's return through the use of Debt is called "financial leverage" or "financial gearing" or "trading on equity". Leverage Ratios are calculated to measure the financial risk and the firm's ability of using Debt to shareholder’s advantage.
Leverage Ratios can be divided into five types.
Debt Equity Ratio Debt Ratio Interest Coverage Ratio Proprietary Ratio Capital Gearing Ratio
4.4.1 Debt equity ratio
It indicates the relationship describing the lenders contribution for each rupee of the owner's contribution is called debt-equity ratio. Debt equity ratio is directly computed by dividing total debt by net worth. Lower the debt-equity ratio, higher the degree of protection. A debtequity ratio of 2:1 is considered ideal. The debt consists of all short term as well as long-term and equity consists of net worth plus preference capital plus Deferred Tax Liability.
Long Term Liabilities 29
Debt Equity Ratio = -----------------------------------Equity
4.4.2 Debt ratio
Several debt ratios may use to analyze the long-term solvency of a firm. The firm may be interested in knowing the proportion of the interest-bearing debt in the capital structure. It may, therefore, compute debt ratio by dividing total debt by capital employed on net assets. Total debt will include short and long-term borrowings from financial institutions, debentures/bonds, deferred payment arrangements for buying equipment’s, bank borrowings, public deposits and any other interest-bearing loan. Capital employed will include total debt net worth. Total Debt Debt Ratio = ------------------------------Total Debt + Net Worth
4.4.3 Interest Coverage Ratio
The interest coverage ratio or the time interest earned is used to test the firms’ debt servicing capacity. The interest coverage ratio is computed by dividing earnings before interest and taxes by interest charges. The interest coverage ratio shows the number of times the interest charges are covered by funds that are ordinarily available for their payment. We can calculate the interest average ratio as earnings before depreciation, interest and taxes divided by interest.
EBIT Interest Coverage Ratio = --------------------Interest
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4.4.4 Proprietary Ratio
The total shareholder's fund is compared with the total tangible assets of the company. This ratio indicates the general financial strength of concern. It is a test of the soundness of financial structure of the concern. The ratio is of great significance to creditors since it enables them to find out the proportion of shareholders’ funds in the total investment of business. Proprietor’s Fund Proprietary Ratio = ----------------------------Total Assets
4.4.5 Capital Gearing Ratio This ratio makes an analysis of capital structure of firm. The ratio shows relationship between equity share capital and the fixed cost bearing i.e., preference share capital and debentures. Common Stockholders’ Equity Capital Gearing Ratio = ----------------------------------------Fixed Interest Bearing Funds
4.5 ACTIVITY RATIOS
Turnover ratios also referred to as activity ratios or asset management ratios, measure how efficiently the assets are employed by a firm. These ratios are based on the relationship between the level of activity, represented by sales or cost of goods sold and levels of various assets. The improvement turnover ratios are inventory turnover, average collection period, receivable turn over, fixed assets turnover and total assets turnover.
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Activity ratios are employed to evaluate the efficiency with which the firm manages and utilize its assets. These ratios are also called turnover ratios because they indicate the speed with which assets are being converted or turned over into sales. Activity ratios thus involve a relationship between sales and assets. A proper balance between sales and assets generally reflects that asset utilization. Activity ratios are divided into four types: Total capital turnover ratio Working capital turnover ratio Fixed assets turnover ratio Stock turnover ratio
4.5.1 Total Capital Turnover Ratio This ratio expresses relationship between the amountsinvested in this assets and the resulting in terms of sales. This is calculated by dividing the net sales by total sales. The higher ratio means better utilization and vice-versa. Some analysts like to compute the total assets turnover in addition to or instead of net assets turnover. This ratio shows the firm's ability in generating sales from all financial resources committed to total assets. Sales Total Capital Turnover Ratio = --------------------------Capital Employed
4.5.2 Working Capital Turnover Ratio
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This ratio measures the relationship between workingcapital and sales. The ratio shows the number of times the working capital results in sales. Working capital as usual is the excess of current assets over current liabilities. Net Sales Working Capital Turnover Ratio = --------------------------------Average Working Capital
4.5.3 Fixed Asset Turnover Ratio The firm may which to know its efficiency of utilizing fixedassets and current assets separately. The use of depreciated value of fixed assets in computing the fixed assets turnover may render comparison of firm's performance over period or with other firms. The ratio is supposed to measure the efficiency with which fixed assets employed a high ratio indicates a high degree of efficiency in asset utilization and low ratio
reflects inefficient use of assets. However, in interpreting this ratio, one caution should be borne in mind, when the fixed assets of firm are old and substantially depreciated, the fixed assets turnover ratio tends to be high because the denominator of ratio is very low. Net Sales Fixed Assets Turnover Ratio = -----------------------------Net Fixed Assets
4.5.4 Stock Turnover Ratio StockTurnover Ratio indicates the efficiency of firm in producingand selling its product. It is calculated by dividing the cost of goods sold by the average stock. It measures how fast the inventory is moving through the firm and generating sales. The stock turnover ratio reflects the efficiency of inventory management. The 33
higher the ratio, the more efficient the management of inventories and vice versa .However, this may not always be true. A high inventory turnover may be caused by a low level of inventory which may result if frequent stock outs and loss of sales and customer goodwill. Cost of Goods Sold Stock Turnover Ratio = ------------------------------Average Inventory
4.6 PROFITABILITY RATIOS
A company should earn profits to survive and grow over a long period of time. Profits are essential but it would be wrong to assume that every action initiated by management of a company should be aimed at maximizing profits. Profit is the difference between revenues and expenses over a period of time. Profit is the ultimate 'output' of a company and it will have no future if it fails to make sufficient profits. The financial manager should continuously evaluate the efficiency of company in terms of profits. The profitability ratios are calculated to measure the operating efficiency of company. Creditors want to get interest and repayment of principal regularly. Owners want to get a required rate of return on their investment.
Generally, two major types of profitability ratios are calculated Profitability in relation to sales Profitability in relation to investment
Profitability Ratios can be divided into six types: Gross Profit Ratio Operating Profit Ratio
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Net Profit Ratio Return On Investment Earns Per Share Operating Expenses Ratio.
4.6.1 Gross Profit Ratio First profitability ratio in relation to sales is the gross profit margin the gross profit margin reflects. The efficiency with which management produces each unit of product. This ratio indicates the average spread between the cost of goods sold and the sales revenue. A high gross profit margin is a sign of good management. A gross margin ratio may increase due to any of following factors: higher sales prices cost of goods sold remaining constant, lower cost of goods sold, sales prices remaining constant. A low gross profit margin may reflect higher cost of goods sold due to firm's inability to purchase raw materials at favorable terms, inefficient utilization of plant and machinery resulting in higher cost of production or due to fall in prices in market. This ratio shows the margin left after meeting manufacturing costs. It measures the efficiency of production as well as pricing. To analyze the factors underlying the variation in gross profit margin, the proportion of various elements of cost (Labor, materials and manufacturing overheads) to sale may studied in detail.
Gross Profit Gross Profit Ratio = -------------------Net Sales
4.6.2 Operating Profit Ratio 35
This ratio expresses the relationship between operating profit and sales. It is worked out by dividing operating profit by net sales. With the help of this ratio, one can judge the managerial efficiency which may not be reflected in the net profit ratio.
Operating Profit Operating Profit Ratio = --------------------------Net Sales
4.6.3 Net Profit Ratio Net profit is obtained when operating expenses, interest and taxes are subtracted from the gross profit. Net profit margin ratio established a relationship between net profit and sales and indicates management's efficiency in manufacturing, administering and selling products. This ratio also indicates the firm's capacity to withstand adverse economic conditions. A firm with a high net margin ratio would be in an advantageous position to survive in the face of falling selling prices, rising costs of production or declining demand for product This ratio shows the earning left for shareholders as a percentage of net sales. It measures overall efficiency of production, administration, selling, financing. Pricing and tax management. Jointly considered, the gross and net profit margin ratios provide a valuable understanding of the cost and profit structure of the firm and enable the analyst to identify the sources of business efficiency / inefficiency.
Net Profit Net Profit Ratio = ------------------Net Sales
4.6.4 Return On Investment 36
This is one of the most important profitability ratios. It indicates the relation of net profit with capital employed in business. Net profit for calculating return of investment will mean the net profit before interest, tax, and dividend. Capital employed means long term funds.
EBIT Return On Investment = -----------------------Capital Employed
4.6.5 Earnings Per Share This ratio is computed by earning available to equity shareholders by the total amount of equity share outstanding. It reveals the amount of period earnings after taxes which occur to each equity share. This ratio is an important index because it indicates whether the wealth of each shareholder on a per share basis as changed over the period. Net Income – Preferred Dividends Earnings Per Share = -------------------------------------------------------------Weighted Average Common Shares Outstanding
4.6.6 Operating Expenses Ratio It explains the changes in the profit margin ratio. A higher operating expenses ratio is unfavorable since it will leave a small amount of operating income to meet interest, dividends. Operating expenses ratio is a yardstick of operating efficiency, but it should be used cautiously. It is affected by a number of factors such as external uncontrollable factors, internal factors. This ratio is computed by dividing operating expenses by sales. Operating expenses equal cost of goods sold plus selling expenses and general administrative expenses by sales. Operating Expenses Operating Expenses Ratio = --------------------------------Sales HORIZONTAL ANALYSIS
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Horizontal analysis is the comparison of historical financial information over a series of reporting periods, or of the ratios derived from this financial information. The intent is to see if any numbers are unusually high or low in comparison to the information for bracketing periods, which may then trigger a detailed investigation of the reason for the difference. The analysis is most commonly a simple grouping of information that is sorted by period, but the numbers in each succeeding period can also be expressed as a percentage of the amount in the baseline year, with the baseline amount being listed as 100%.
VERTICAL ANALYSIS
Vertical analysis is the proportional analysis of a financial statement, where each line item on a financial statement is listed as a percentage of another item. Typically, this means that every line item on an income statement is stated as a percentage of gross sales, while every line item on a balance sheet is stated as a percentage of total assets
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5.1 LIQUIDITY RATIO’S 5.1.1CurrentRatio The ratio between all current assets and all current liabilities; another way of expressing liquidity. It is a measure of the firm’s short-term solvency. It indicates the availability of current assets in rupees for every one rupee of current liability. A ratio of greater than one means that the firm has more current assets than current claims against them.
Current Ratio =
Current assets ---------------------------Current Liabilities
Table 5.1.1
S.NO
Year
Current
Current
Assets
Liabilities
Current Ratio
1.
2015‐14 727.04
450.50
1.79
2.
2014‐13 663.10
373.58
1.77
3.
2013‐12 669.07
336.52
1.98
4.
2012‐11 505.57
223.27
2.26
5.
2011‐10 367.33
222.67
1.64
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Graph 5.1.1 Current Ratio
1.7 9
2011
1.77
2012
2013
2014
2015
Interpretation: The standard norm for current ratio is 2:1.During the year 2011 the ratio is 1.64 and ithas increased to 2.26 and decreased to 1.98 in the year 2013 and decreased to 1.77 in the year 2014 and increased to 1.79 in the year 2015. The ratio above was standard only in the year 2012. So the ratio was satisfactory.
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5.1.2 Quick ratio
Quick ratio establishes a relationship between quick, or liquid, assets and current liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value. Current Assets – Inventories Quick Ratio = -------------------------------------Current Liabilities
Table 5.1.2
S.NO
Year
Quick assets
Current Liabilities
Quick Ratio
1.
2015
308.91
450.50
0.76
2.
2014
328.09
373.58
0.87
3.
2013
376.21
336.52
0.10
4.
2012
278.75
223.27
1.24
5.
2011
82.63
222.67
0.37
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5.1.2 Quick Ratio
0
0. 2011
2012
2013
2014
2015
Interpretation: The standard form of quick ratio is 1:1. The quick ratio in the year 2011 was 0.37and it was increased to 1.24 in the year 2012 and decreased to 0.10 in the year 2013 and increased to 0.87 in the year 2014 and decreased to 0.76 in the year 2015. The ratio above was standard onlyin the year 2012. So the ratio was satisfactory.
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5.1.3 Cash Ratio
The ratio between cash plus marketable securities and current liabilities.
Cash Ratio =
Cash &Bank Balances --------------------------------Current Liabilities
Table 5.1.3 Cash Ratio
Cash& Bank
Current
Cash
S.NO
Year
Balances
Liabilities
Ratio
1.
2011
45.12
450.50
0.10
2.
2012
229.22
373.58
0.60
3.
2013
410.79
336.52
1.22
4.
2014
294.52
223.27
1.31
5.
2015
222.17
222.67
0.99
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5.1.3 Cash Ratio
2011
2012
2013
2014
2015
Interpretation: The Standard norm for absolute quick ratio is 1:1. Except in the year 2013 and2014. The absolute quick ratio is very low. The company failed in keeping cash & Bank balances and Marketable surplus.
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5.1.4 NET WORKING CAPITAL
The difference between Current assets and Current liabilities excluding short–term bank borrowing is called net working capital or net current assets.
Net Working Capital Net Working Capital Ratio =-------------------------------Net Assets
Table 5.1.4 Net Working Capital
Net Working
Net Assets
Net Working
S.NO
Year
Capital
1.
2011
45.12
450.50
0.87
2.
2012
229.22
373.58
0.92
3.
2013
410.79
336.52
0.92
4.
2014
294.52
223.27
0.94
5.
2015
222.17
222.67
0.95
5.1.4 Net Working Capital 45
Capital Ratio
0.92
2011
2012
2013
2014
2015
Interpretation: Net working capital in the year 2011 was o.87 and it was increased to 0.92 and the year 2013 was same and increased to 0.94 in the year 2014 and increased to 0.95 in the year 2015.But condition of business working capital is not shortage.
5.2 LEVERAGE RATIO
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5.2.1 Debt Ratio If the firm may be Interested in knowing the proportion of the interest bearing debt in the capital structure.
Total Debt Debt Ratio= ---------------------------------Total Debt +Net Worth
Table 5.2.1 Debt Ratio
Total Debt
Total Debt+
Debt
Net Worth
Ratio
S.NO
Year
1.
2011
90.11
736.04
0.12
2.
2012
84.07
907.54
0.09
3.
2013
87.17
1146.98
0.07
4.
2014
84.33
1447.03
0.05
5.
2015
74.14
1773.71
0.04
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Graph 5.2.1 Debt Ratio
0.090.07
2011
2012
2013
2014
2015
0.0
Interpretation: This ratio gives results relating to capital structure of a firm. Debt ratio is 0.12 inthe year 2011 and it was decreased to 0.09 in the year 2012 and decreased to 0.07 in the year 2013 and decreased to 0.05 in the year 2014 and decreased to 0.04 in 2015.From the above in fluctuating trend we can conclude that the company’s dependence on debt is decreasing it is not better position in collection of debt.
5.2.2 Debt equity ratio 48
Debt equity ratio indicates the relationship describing the lenders contribution for each rupee of the owner’s contribution is called debt- equity ratio. Debt equity ratio is computed by dividing Long term Liabilities divided by Equity. Lower debt – equity ratio higher the degree of protection. A debt-equity ratio of 2:1 is considered ideal.
Total Debt Debt Equity Ratio = -----------------Net Worth
Table 5.2.2 Debt equity Ratio
Total Debt
Net worth
Debt Equity
S.NO
Year
Ratio
1.
2011
90.11
645.93
0.13
2.
2012
84.07
823.47
0.10
3.
2013
87.17
1059.81
0.08
4.
2014
84.33
1362.70
0.06
5.
2015
74.14
1699.57
0.04
Graph 5.2.2 Debt Equity Ratio 49
0.0
2011
2012
2013
2014
2015
Interpretation: This ratio gives results relating to capital structure of a firm. Debt equity ratio is0.13 in the year 2011 and it was decreased to 0.10 in the year 2012 and decreased to 0.08 in the year 2013 and decreased to 0.06 in the year 2014 and decreased to 0.04 in 2015.we can conclude that the company depend on debt fund is decreasing.
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5.2.3 INTEREST COVERAGE RATIO:
The ratio shows the number of time the interest charges are covered by funds that are ordinarily available for their payment.
EBIT Interest Coverage Ratio = ------------------Interest
Table 5.2.3 Interest Coverage Ratio
EBIT
Interest
Interest Coverage Ratio
S.NO
Year
1.
2011
257.37
3.06
84.10
2.
2012
354.01
4.06
87.19
3.
2013
451.52
1.00
451.52
4.
2014
560.30
0.72
778.19
5.
2015
709.07
0.24
2954.4
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Graph 5.2.3 Interest Coverage Ratio
84.1
87.19
2011
2012
20 13
20 14
2015
Interpretation: Interest coverage ratio is 84.10 in the year 2011 and increased to 87.19 in the year2012 and increased to 451.52 in the year 2013 and increased to 778.19 in the year 2014 and increased to 2954.4 in the year 2015. In this position outside investors is interested to invest money in the company.
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5.3 ACTIVITY RATIO 5.3.1 INVENTORY TURNOVER RATIO: It indicates the firm efficiency of the firm in producing and selling its product. It is calculated by dividing the cost of goods sold by the average inventory. Cost of Goods Sold Inventory Turnover Ratio= ------------------------------Average Inventory
Table 5.3.1 Inventory Turnover Ratio
S.NO
Year
Cost Of Goods
Average
Inventory
Sold
Inventory
Turnover Ratio
1.
2011
1,531.99
142.35
10.76
2.
2012
2,001.18
133.31
15.01
3.
2013
2,541.97
146.43
17.35
4.
2014
2,905.56
167.50
17.34
5.
2015
3,550.26
209.06
16.98
53
Graph 5.3.1 Inventory Turnover Ratio
2011
2012
2013
2014
201510.76
Interpretation: Inventory Turnover ratio was 10.76 times in the year 2011 and was increased to15.01 times in the year 2012 and increased to 17.34 times in the year 2014 and remains constant in the year 2014 and decreased to 16.98 times in the year 2015. Inventory turnover ratio is increased year by year and the sale are also started increasing and in 2014 onwards started diminishing.
54
5.3.2 DEBTORS TURNOVER RATIO: It is found out by dividing the credit sales by average debtors. Debtor’s turnover indicates the number of times debtors turnover each year. Sales Debtors Turnover Ratio =-------------------------Average Debtors
Table 5.3.2 Debtors Turnover Ratio
Sales
Average
Debtors Turnover
Debtors
Ratio
S.NO
Year
1.
2011
1761.05
152.83
11.52
2.
2012
2367.36
159.84
14.81
3.
2013
2961.40
190.34
15.55
4.
2014
3436.65
226.36
15.18
5.
2015
4211.33
277.05
15.20
55
Graph 5.3.2 Debtors Turnover Ratio
11. 2011
2012
2013
2014
2015
Interpretation: Debtors Turnover ratio is 11.52 times in the year 2011 and increased to14.81times in the year 2012 and increased to 15.55 times in the year in the year 2013 and remains constant as 15.20 times in the year 2014&2015.
5.3.3 Fixed Asset Turnover Ratio
56
The ratio is supposed to measure the efficiency with which fixed assets are employed a high ratio indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient use of assets. However, in interpreting this ratio, one caution should be borne in mind. When the fixed assets of the firm are old and substantially depreciated, the fixed assets turnover ratio tends to be high because the denominator of the ratio is very low. Net Sales Fixed Asset Turnover Ratio = --------------------------Net Fixed Asset
Table 5.3.3 Fixed Asset Turnover Ratio
Net Sales S.NO
Net Fixed Assets
Year
Fixed Asset Turnover Ratio
1.
2011
1761.05
368.71
4.77
2.
2012
2367.36
402.17
5.8
3.
2013
2961.40
477.92
6.19
4.
2014
3436.65
783.94
4.38
5.
2015
4211.33
1046.66
4.02
Graph 5.3.3 Fixed Asset Turnover Ratio 57
4.77
2011
2012
2013
2014
2015
Interpretation: Fixed assets turnover ratio is 4.77 times in the year 2011 and increased to 5.88times in the year 2012 and increased to 6.19 in the year 2013 and decreased to 4.38 times in the year 2014 and decreased to 4.02 in the year 2015.
5.3.4 Current Asset Turnover Ratio
58
Current Assets Turnover Ratio indicates how efficiently a firm is using its current assets to generate revenue. Net Sales Current Asset Turnover Ratio = ----------------------Current Assets
Table 5.3.4 Current Asset Turnover Ratio
Net Sales S.NO
Year
Current Asset Current Assets
Turnover Ratio
1.
2011
1761.05
727.04
2.42
2.
2012
2367.36
663.10
3.57
3.
2013
2961.40
669.07
4.42
4.
2014
3436.65
505.57
6.79
5.
2015
4211.33
367.33
11.46
Graph 5.3.4 Current Asset Turnover Ratio 59
3.57 2011
2012
2013
2014
2015
Interpretation: current assets turnover ratio is 2.42 in the year 2011 and increased to 3.57 in theyear 2012 and increased to 4.42 in the year 2013 and increased to 6.79 in the year 2014 and increased to 11.46 in the year 2015. From the above we can conclude that current assets turnover ratio is increasing.
5.3.5 Total Assets Turnover Ratio: 60
The ratio ensures whether the capital employed has been effectively used or not. This is also test of managerial efficiency and business performance. Higher total capital turnover ratio is always required in the Interest of a company. Sales Total Assets Turnover Ratio= ---------------------Total assets
Table 5.3.5 Total Assets Turnover Ratio
Net Sales S.NO
Total Assets
Year
Capital Turnover Ratio
1.
2011
1761.05
736.04
2.39
2.
2012
2367.36
907.54
2.60
3.
2013
2961.40
1146.99
2.58
4.
2014
3436.65
1447.04
2.37
5.
2015
4211.33
1773.70
2.37
Graph 5.3.5 Total Assets Turnover Ratio 61
2011
2012
2013
2014
2015
Interpretation: Total assets turnover ratio is 2.39 in the year 2011 and increased to 2.60 in theyear 2012 from 2013 onwards decreased to 2.58 and decreased t0 2.37 in the year 2014&2015. It means total assets are increased till 2013 and decreased and remains constant in 2014&2015.
5.4 PROFITABILITY RATIOS 62
5.4.1 Gross Profit Ratio This ratio shows that the margin left after meeting manufacturing costs. It measures the efficiency of production as well as pricing.
Gross Profit Gross Profit Ratio = --------------------x 100 Net Sales
Table 5.4.1 Gross Profit Ratio
Net Sales S.NO
Year
Gross Profit
Gross Profit Margin Ratio
1.
2011
257.37
1761.05
14.61
2.
2012
354.01
2367.36
14.95
3.
2013
451.52
2961.40
15.24
4.
2014
560.30
3436.65
16.30
5.
2015
709.07
4211.33
16.83
Graph 5.4.1 Gross Profit Ratio 63
2011
2012
2013
2014
2015
Interpretation: The gross profit ratio is 14.61 % in the year 2011 and increased to 14.95 % in theyear in the year 2012 and increased to 15.24% in the year in the year 2013 and increased to 16.30 %in the year 2014 and increased to 16.83% in the year 2015. The company is maintaining proper control on trade activities.
5.4.2 Net Profit Ratio:
64
This ratio also indicates the firm’s capacity to withstand adverse economic conditions. A firm with a high net margin would be in an advantageous position to survive in the face falling selling prices rising cost of production or declining demand for the product. Net Profit Net Profit Ratio = ---------------x100 Net Sales
Table 5.4.2 Net Profit
Net Sales S.NO
Year
Net Profit
Net Profit Margin Ratio
1.
2011
148.10
1761.05
8.40
2.
2012
215.06
2367.36
9.08
3.
2013
286.71
2961.40
9.68
4.
2014
367.44
3436.65
10.69
5.
2015
410.86
4211.33
9.7
Graph 5.4.2 Net Profit 65
99.7
2011
2012
2013
2014
2015
Interpretation: During the year 2011 net profit is 8.40% in the year 2011 and increased to 9.08%in the year 2012 and increased to 9.68% in the year 2013 and increased to 10.69% in the year 2014 and decreased to 9.7% in the year 2015.because of decrease in administration & selling expenses.
5.4.3 Return on Investment: 66
The conventional approach of calculated ROI is to divide PAT by investment. EBIT Return On Investment = ---------------------Total Assets
Table 5.4.3 Return on Investment
EBIT
Total Assets
Return on
S.NO
Year
Investment
1.
2011
257.37
736.04
0.34
2.
2012
354.01
907.54
0.39
3.
2013
451.52
1146.99
0.39
4.
2014
560.30
1447.04
0.38
5.
2015
709.07
1773.70
0.39
Graph 5.4.3 Return on Investment
67
2011
2012
2013
2014
2015
Interpretation: Return on investment is very low in all years due to less earnings.
5.4.4 Return on equity share holder’s fund The return on equity shareholders fund explains about the return of shareholders with they get on their investment. 68
Net Profit Return on Equity Shareholder Fund= ------------------Net Worth
Table 5.4.4 Return on Equity Shareholder Fund
Return on equity Shareholder’s S.NO
Year
Net Profit
Net Worth
Fund
1.
2011
148.10
645.93
0.22
2.
2012
215.06
823.47
0.26
3.
2013
286.71
1059.81
0.27
4.
2014
367.44
1362.70
0.26
5.
2015
410.86
1699.57
0.24
Graph 5.4.4 Return on Equity Shareholder Fund
69
2011
2012
2013
2014
2015
Interpretation: Return on equity shareholder fund is 0.22 in the year 2011 and increased to 0.26in the year 2012 and increased to 0.27 in the year 2013 and decreased to 0.26 in the year 2014 and decreased to 0.24 in the year 2015.
70
FINDINGS
Except in the year 2012, the company is maintaining current ratio as 2 and more, standard which indicates the ability of the firm to meet its current obligations is more. It shows that the company is strong in working funds management.
The company is maintaining of quick assets more than quick ratio. As the company having high value of quick ratio. Quick assets would meet all its quick liabilities without any difficulty.
The company is failed in keeping sufficient cash & bank balances and marketable securities.
Net working capital ratio is 0.45 in 2013 but also 0.50 in 2014. It is increased very high but condition of business working capital is not shortage.
Debt Equity ratio is increasing every year. It indicates the company depends on the debt fund increasing.
Total liabilities ratio is also increasing year by year. In the year 2012, the interest coverage ratio 7.56 which increased to 94.76 in the year 2015 and high fluctuations in the followed years. In this position, outside investors are interested to invest their money in this company.
The company is declining of its coverage ratio to serve long term debts.
Inventory turnover also increased for year by year that is company production is also increased. Subsequently sales are also increased.
The net profit ratio of the company increasing over the study period. Hence the organization having the good control over the operating expenses. 71
o
72
SUGGESTIONS
The company has to increase the profit maximization and has to decrease the operating expenses.
By considering the profit maximization in the company the earning per share, investment and working capital also increases. Hence, the outsiders are also interested to invest.
The company should maintain sufficient cash and bank balances; they should invest the idle cash in marketable securities or short term investments in shares, debentures, bonds and other securities.
The company must reduce its debtors collection period from 83 & 84 days to 40 days be adopting credit policy by providing discounts to the debtors.
Return on investment is fluctuates every year. The company has to make efforts in increasing return on investments by reducing its administration, selling and other expenses.
The net profit of the company is increasing over the study period. Hence the organization maintaining good control on all trees of expenses.
The dividend per share has observed as raising trend over the study period, hence it may be suggested Amara Raja Batteries Limited should take key interest to maximize the shareholder wealth by increasing dividend payout.
CONCLUSION
73
Liquidity ratios, both current ratio and quick ratio are showing effectiveness in liquidity as in all the years current ratio is greater than the standard 2:1 and quick ratio is greater than the standard 1:1 ratio. The firm is maintaining a low cash balance and marketable securities which means they done cash payments. Debt equity ratio, solvency ratio and interest coverage ratio are showing an average increase in the long term solvency of the firm. The proprietary ratio is showing an average increase which means, the shareholders have contribute more funds to the total assets. Average payment period of the firm is showing the credit worthiness of the firm to its suppliers. Fixed assets turnover ratio is showing that the firm needs lesser investment in fixed assets to generate sales. The increasing trend of current assets turnover ratio indicates that the firm needs more investment in current assets for generating sales. The gross profit ratio, net profit ratio is showing the increasing trends. The profitability of the firm the increasing. Operating ratio of the company has observed decreasing trend, hence it may be good control over the operating expenses. The interest that has to be paid is very less when compared to the sales. The firm is not utilizing the debt conservatively. The firm is retaining much of the earnings (based on dividend payout ratio). The company financial performance is very good and also they will increase their business year by year by expanding their branches.
74
BIBLOGRAPHY
1. I.M.Pandey : Financial Management 2. M.Y.Khan & P.K.Jai : Financial Management 3. S.P. Jain & K.L. Narang : Cost & Management accounting 4. K.Rajeswara rao & G. Prasad: Accounting & Finance 5. P.Kulakarni : Financial Management 6. www.google.com 7. www.amaron.co.in 8. www.valueresearchonline.com 9. www.economywatch.com 10. www.moneycontrol.com 11. www.investopedia.com 12. www.faculty.philau.edu 13. www.accountingtools.com
75
Balance Sheet of Amara Raja Batteries
------------------- in Rs. Cr. -------------------
Mar '15 Mar '14
Mar '13
12 mths 12 mths
12 mths
Mar '12
Mar '11
12 mths
12 mths
Sources Of Funds
Total Share Capital
17.08
17.08
17.08
17.08
17.08
Equity Share Capital
17.08
17.08
17.08
17.08
17.08
Share Application Money
0.00
0.00
0.00
0.00
0.00
Preference Share Capital
0.00
0.00
0.00
0.00
0.00
Reserves
1,682.49 1,345.62
1,042.73
806.39
628.85
Net worth
1,699.57 1,362.70
1,059.81
823.47
645.93
Secured Loans
0.00
8.38
9.86
5.60
20.01
Unsecured Loans
74.14
75.95
77.31
78.47
70.10
Total Debt
74.14
84.33
87.17
84.07
90.11
Total Liabilities
1,773.71 1,447.03
1,146.98
907.54
736.04
Mar '15 Mar '14
Mar '13
Mar '12
Mar '11
12 mths 12 mths
12 mths
12 mths
12 mths
620.22
538.21
Application Of Funds
Gross Block
1,437.20 992.57
76
678.41
Less: Revaluation Reserves
0.00
0.00
0.00
0.00
0.00
Less: Accum. Depreciation
492.94
369.38
319.55
265.65
223.12
Net Block
944.26
623.19
358.86
354.57
315.09
Capital Work in Progress
86.32
144.67
102.98
31.52
37.54
Investments
16.08
16.08
16.08
16.08
16.08
Inventories
418.13
335.01
292.86
266.62
284.70
Sundry Debtors
554.10
452.79
380.68
319.68
305.66
Cash and Bank Balance
222.17
294.57
410.79
229.22
45.12
Total Current Assets
1,194.40 1,082.37
1,084.33
815.52
635.48
Loans and Advances
147.02
273.14
208.22
133.83
111.74
Fixed Deposits
0.00
0.00
0.00
0.00
0.00
Total CA, Loans & Advances
1,341.42 1,355.51
1,292.55
949.35
747.22
Deferred Credit
0.00
0.00
0.00
0.00
0.00
Current Liabilities
450.50
373.58
336.52
223.27
222.67
Provisions
163.88
318.83
286.96
220.71
157.22
Total CL & Provisions
614.38
692.41
623.48
443.98
379.89
Net Current Assets
727.04
663.10
669.07
505.37
367.33
Miscellaneous Expenses
0.00
0.00
0.00
0.00
0.00
Total Assets
1,773.70 1,447.04
1,146.99
907.54
736.04
Contingent Liabilities
364.39
160.28
152.04
48.63
61.91
Book Value (Rs)
99.50
79.78
62.05
96.42
75.63
77
Profit & Loss account of Amara Raja ------------------- in Rs. Cr. ------------------Batteries Mar '15 Mar '14
Mar '13
Mar '12
12 mths 12 mths
12 mths
Sales Turnover
4,637.17 3,837.17
3,310.97
2,605.75
1,944.31
Excise Duty
425.84
349.57
238.39
183.26
Net Sales
4,211.33 3,436.65
2,961.40
2,367.36
1,761.05
Other Income
35.02
41.63
37.39
15.19
7.78
Stock Adjustments
48.00
29.21
32.09
-12.17
28.31
Total Income
4,294.35 3,507.49
3,030.88
2,370.38
1,797.14
Raw Materials
2,882.60 2,357.51
2,064.99
1,614.59
1,217.77
Power & Fuel Cost
115.08
92.26
98.69
53.98
48.34
Employee Cost
195.09
158.32
126.62
100.26
88.46
Other Manufacturing Expenses
11.40
7.17
7.74
7.51
6.45
Selling and Admin Expenses
0.00
0.00
0.00
0.00
0.00
Miscellaneous Expenses
346.09
290.30
243.93
224.84
170.97
Preoperative Exp Capitalized
0.00
0.00
0.00
0.00
0.00
12 mths
Mar '11
12 mths
Income
400.52
Expenditure
78
Total Expenses
3,550.26 2,905.56
2,541.97
2,001.18
1,531.99
Mar '15 Mar '14
Mar '13
Mar '12
Mar '11
12 mths 12 mths
12 mths
12 mths
12 mths
Operating Profit
709.07
560.30
451.52
354.01
257.37
PBDIT
744.09
601.93
488.91
369.20
265.15
Interest
0.24
0.72
1.00
4.06
3.06
PBDT
743.85
601.21
487.91
365.14
262.09
Depreciation
133.99
64.57
66.09
46.47
41.71
Other Written Off
0.00
0.00
0.00
0.00
0.00
Profit Before Tax
609.86
536.64
421.82
318.67
220.38
Extra-ordinary items
0.00
0.00
0.00
0.00
0.00
PBT (Post Extra-ord Items)
609.86
536.64
421.82
318.67
220.38
Tax
199.00
169.23
135.11
103.58
72.29
Reported Net Profit
410.86
367.44
286.71
215.06
148.10
Total Value Addition
667.65
548.04
476.98
386.60
314.22
Preference Dividend
0.00
0.00
0.00
0.00
0.00
Equity Dividend
61.66
55.17
43.05
32.28
39.29
Corporate Dividend Tax
12.33
9.38
7.32
5.24
6.53
Shares in issue (lakhs)
1,708.13
1,708.13
1,708.13
854.06
854.06
Earnings Per Share (Rs)
24.05
21.51
16.78
25.18
17.34
Equity Dividend (%)
361.00
323.00
252.00
189.00
230.00
Book Value (Rs)
99.50
79.78
62.05
96.42
75.6
Per share data (annualized)
79
