Balance Sheet.docx

Balance sheet Mar ' 12 Sources of funds Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus Loan funds Secured loans Unsecured loans Total Uses of funds Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments Net current assets Current assets, loans & advances Less : current liabilities & provisions Total net current assets Miscellaneous expenses not written Total Notes: Book value of unquoted investments

Mar ' 11

Mar ' 10

Mar ' 09

77.01 77.01 77.01 77.01 2,158.80 1,973.12 1,706.21 1,202.48

(Rs crore) Mar ' 08

77.01 919.53

922.62 770.64 518.20 219.40 206.01 201.71 174.77 132.36 8.36 21.49 3,360.14 2,995.54 2,433.78 1,507.25 1,224.04

2,201.11 1,751.32 1,430.02 1,354.20 1,173.44 7.79 7.79 8.00 8.22 8.44 848.58 775.91 731.33 694.15 672.64 1,344.75 967.62 690.68 509.62 488.94 327.77 1,044.81 1,169.21 1,141.65

651.82 141.86 552.29

492.36 149.11 634.00

1,199.20 1,092.60

870.69

708.33

737.06

738.24

722.84

597.01

547.05

788.49

460.96 -

369.76 -

273.68 -

161.28 -

-51.44 -

3,360.14 2,995.54 2,433.78 1,507.25 1,224.04 294.26

424.05

775.03

462.06

618.82

Market value of quoted investments

755.73

790.48

448.95

117.81

136.94

Contingent liabilities Number of equity shares outstanding (Lacs)

243.51 770.05

392.50 770.05

331.60 770.05

237.54 770.05

92.46 770.05

Profit loss account (Rs crore) ' Mar ' 08

Mar ' 12

Mar ' 11

Mar ' 10

Mar 09

2,289.46

2,146.37

2,164.44

1,802.82

1,724.91

Income Operating income Expenses Material consumed

681.53

598.60

473.74

455.51

314.69

Manufacturing expenses

610.28

541.21

469.18

432.74

421.33

Personnel expenses

213.80

174.26

146.27

148.59

141.45

Selling expenses

350.03

326.80

288.40

258.54

214.53

Adminstrative expenses

71.39

66.58

65.72

61.84

57.07

Expenses capitalised

-56.01

-9.32

-

-

-

Cost of sales

1,871.02

1,698.13

1,443.31

1,357.23

1,149.07

Operating profit

418.43

448.23

721.13

445.59

575.84

Other recurring income

94.45

97.97

73.23

26.03

27.98

Adjusted PBDIT

512.89

546.20

794.36

471.61

603.81

Financial expenses

108.09

61.95

26.97

22.05

21.05

Depreciation

80.00

64.83

55.64

43.42

41.44

Other write offs

-

-

-

-

-

Adjusted PBT

324.80

419.41

711.75

406.15

541.32

Tax charges

106.84

117.78

203.63

112.95

157.61

Adjusted PAT

217.95

301.63

508.12

293.19

383.71

Non recurring items

13.97

13.83

35.33

24.51

6.05

Other non cash adjustments

7.28

4.42

13.73

5.81

3.81

Reported net profit

239.21

319.88

557.18

323.51

393.57

before 429.71

510.77

658.10

491.46

553.99

46.20

46.20

46.20

34.65

30.80

Preference dividend

-

-

-

-

-

Dividend tax

7.50

7.57

7.75

5.89

5.23

Retained earnings

376.01

457.00

604.15

450.92

517.95

Earnigs appropriation Equity dividend

Ratios

Per share ratios Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share EPS (Rs) Book value (incl rev res) per share EPS (Rs) Net operating income per share EPS (Rs) Free reserves per share EPS (Rs) Profitability ratios Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth (%) Return on long term funds (%) Leverage ratios Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio Liquidity ratios Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio Payout ratios Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention

Mar ' 12

Mar ' 11

Mar ' 10

Mar ' 09

(Rs crore) Mar ' 08

28.30 38.69 31.06 41.45 6.00 54.34

39.17 47.59 41.54 49.96 6.00 58.21

65.98 73.21 72.36 79.58 6.00 93.65

38.07 43.71 42.01 47.65 4.50 57.86

49.83 55.21 51.11 56.49 4.00 74.78

290.34

266.23

231.57

166.16

129.41

291.36

267.24

232.61

167.22

130.51

297.31

278.73

281.08

234.12

224.00

273.94

252.00

219.58

155.95

119.21

18.27 14.78 10.03 12.49 9.74

20.88 17.86 14.25 16.32 14.71

33.31 30.74 24.90 25.19 28.49

24.71 22.30 17.68 18.40 22.91

33.38 30.98 22.45 24.25 38.50

10.69

15.60

31.24

25.28

39.49

14.48

18.08

33.66

30.24

51.08

0.33 0.50 66.53

0.29 0.46 68.43

0.23 0.36 73.26

0.10 0.17 84.88

0.10 0.22 81.41

0.71

1.23

1.51

1.33

1.47

1.62 0.93 0.99 19.77

1.51 0.89 0.96 15.87

1.46 0.92 0.93 18.37

1.29 0.97 0.89 26.19

0.93 0.72 0.65 20.17

22.44

16.81

9.68

12.53

9.15

16.82

13.97

8.80

11.04

8.28

75.37 81.98

82.18 85.33

89.39 90.44

86.18 87.96

90.61 91.53

ratio Coverage ratios Adjusted cash flow time total debt Financial charges coverage ratio Fin. charges cov.ratio (post tax) Component ratios Material cost component (% earnings) Selling cost Component Exports as percent of total sales Import comp. in raw mat. consumed Long term assets / total Assets Bonus component in equity capital (%)

3.77

2.58

1.15

0.67

0.53

4.75

8.82

29.45

21.39

28.68

3.95

7.21

23.72

17.64

21.66

28.00

29.56

23.47

24.41

19.95

15.28 3.36

15.22 4.63

13.32 3.28

14.34 5.01

12.43 4.06

8.47

15.83

33.31

5.34

23.44

0.70

0.70

0.71

0.65

0.63

35.90

35.90

35.90

35.90

35.90

STUDY OF BALANCE SHEET The balance sheet is a financial snapshot of a company's condition at a single point in time. A balance sheet contains a listing of the company's asset, liability and Capital accounts. When someone, whether a creditor or investor, asks you how your company is doing, you'll want to have the answer ready and documented. The way to show off the success of your company is a balance sheet. A balance sheet is a documented report of your company's assets and obligations, as well as the residual ownership claims against your equity at any given point in time. It is a cumulative record that reflects the result of all recorded accounting transactions since your enterprise was formed. You need a balance sheet to specifically know what your company's net worth is on any given date. With a properly prepared balance sheet, you can look at a balance sheet at the end of each accounting period and know if your business has more or less value, if your debts are higher or lower, and if your working capital is higher or lower. By analyzing your balance sheet, investors, creditors and others can assess your ability to meet short-term obligations and solvency, as well as your ability to pay all current and long-term debts as they come due. The balance sheet also shows the composition of assets and liabilities, the relative proportions of debt and equity financing and the amount of earnings that you have had to retain. Collectively, external parties to help assess your company’s financial status, which is required by both lending institutions and investors before they will allot any money toward your business, will use this information. FINANCIAL STATEMENT ANALYSIS Financial statement analysis is the process of examining relationships among financial statement elements and making comparisons with relevant information. It is a valuable tool used by investors and creditors, financial analysts, and others in their decision-making processes related to stocks, bonds, and other financial instruments. With a great understanding of the balance sheet & p&l account and how it is constructed, we can look at some techniques to analyze the information contained within the balance sheet & p&l account. PURPOSE: The main purpose of analyzing the financial statement are the following: To assess past performance and current financial position.  To make predictions about the future performance of a company.

TOOLS FOR ANALYSING 1. PERCENTAGE CALCULATION There are two popular methods by which we can analyze the financial statement by calculating percentage as taking a common base.  Horizontal Analysis When an analyst compares financial information for two or more years for a single company, the process is referred to as horizontal analysis, since the analyst is reading across the page to compare any single line item, such as sales revenues. In addition to comparing dollar amounts, the analyst computes percentage changes from year to year for all financial statement balances, such as cash and

inventory. Alternatively, in comparing financial statements for a number of years, the analyst may prefer to use a variation of horizontal analysis called trend analysis. Trend analysis involves calculating each year's financial statement balances as percentages of the first year, also known as the base year. When expressed as percentages, the base year figures are always 100 percent, and percentage changes from the base year can be determined. If we want to calculate % change in sales then we apply the following formula: Percentage=change in sales /Base Year Sales*100 

Vertical Analysis When using vertical analysis, the analyst calculates each item on a single financial statement as a percentage of a total. The term vertical analysis applies because each year's figures are listed vertically on a financial statement. The total used by the analyst on the income statement is net sales revenue, while on the balance sheet it is total assets. This approach to financial statement analysis, also known as component percentages, produces common-size financial statements. Commonsize balance sheets and income statements can be more easily compared, whether across the years for a single company or across different companies. If we want to calculate % change of current assets then we apply the following formula: Percentage: current assets/total assets*100

2. RATIO ANALYSIS Financial ratio analysis uses formulas to gain insight into the company and its operations. For the balance sheet, using financial ratios (like the debt-to-equity ratio) can show you a better idea of the company’s financial condition along with its operational efficiency. It is important to note that some ratios will need information from more than one financial statement, such as from the balance sheet and the income statement. Ratio analysis facilitates inter-firm and intra-firm comparison. Ratios are often classified using the following terms:  Liquidity Ratio Liquidity ratios are measures of the short-term ability of the company to pay its debts when they come due and to meet unexpected needs for cash.  Current Ratio: The current ratio is a rough indication of a firm ability to service its current obligations. Generally, the higher the current ratio, the greater the cushion between current obligations and a firm ability to pay them. The stronger ratio reflects a numerical superiority of current assets over current liabilities Current ratio is calculated as follows: Current ratio= Current Assets/Current Liabilities  Quick Ratio: It is also known as the “acid test” ratio, this is a refinement of the current ratio and is a more conservative measure of liquidity. The quick ratio expresses the degree to which a company’s current liabilities are recovered by the most liquid current assets. quick ratio is calculated as follows:

Quick ratio= (cash + marketable securities + Receivables)/current liabilities  Solvency Ratio Solvency ratios indicate the ability of the company to meet its long-term obligations on a continuing basis and thus to survive over a long period of time.  Debt/Worth Ratio: This ratio expresses the relationship between capital contributed by creditors and that contributed by owners. It expresses the degree of protection provided by the owners for the creditors. The higher the ratio, the greater the risk being assumed by creditors. The lower the ratio, the greater the long-term financial safety. A firm with a low debt/worth ratio usually has a greater flexibility to borrow in the future. A more highly leveraged company has a more limited debt capacity.  Debt/worth ratio=Total Liabilities / Tangible Net Worth  Profitability Ratio Profitability ratios are gauges of the company's operating success for a given period of time.  Return On Assets: Return on assets is a measure of how effectively the firm’s assets are being used to generate profit. It is calculated as follows: Return On Assets= Net Income/Total Assets  Return On Equity: Return on equity is the bottom line measure for the shareholders, measuring for the profits earned for each rupee invested in business. It is calculated as follows: Return on Equity= Net income/shareholder’s equity 

Fixed/Worth Ratio: This ratio measures the extent to which owner’s equity (capital) has been invested in plant and equipment (fixed assets). A lower ratio indicates a proportionately smaller investment in fixed assets in relation to net worth and a better cushion for creditors in case of liquidation. Similarly, a higher ratio would indicate the opposite situation. The presence of substantial leased fixed assets (not shown on the balance-sheet ) may deceptively lower this ratio. Fixed Worth Ratio=Net Fixed Assets/ Tangible Net Worth