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FAM - Emami Ltd - Financial Analysis Report FAM - Emami Ltd - Financial Analysis Report Document Transcript

  • Financial Performance AnalysisEmami Ltd Submitted By: Amit Dhawan 11EX-006 Bishnu Kumar 11EX-013 Harendra Singh Rawat 11EX-020 Kumar Abhishek 11EX-028 Pankaj Mohindroo 11EX-038
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IContentsCOMPANY PROFILE .........................................................................................................................................................2 HISTORY .......................................................................................................................................................................2 Vision ...........................................................................................................................................................................2 Mission ........................................................................................................................................................................2Board of Directors & Management Team .......................................................................................................................3 Board of Directors .......................................................................................................................................................3 Management team......................................................................................................................................................3Profile of the Organization ..............................................................................................................................................4INTRODUCTION TO THE STUDY .......................................................................................................................................5Financial statements Analysis .........................................................................................................................................5Annual Report & Ratio Analysis Details of Emami Ltd. ...................................................................................................5RATIO ANALYSIS ..............................................................................................................................................................6  Current Ratio .......................................................................................................................................................6  Quick Ratio ..........................................................................................................................................................6  Return on Assets (ROA) .......................................................................................................................................7  Return on Equity (ROE) .......................................................................................................................................7  Profit Margin .......................................................................................................................................................8  Asset Turnover Ratio ...........................................................................................................................................8  Debtors Turnover Ratio .......................................................................................................................................9  Inventory Turnover Ratio ....................................................................................................................................9  Debt to Equity Ratio ............................................................................................................................................9  Interest Coverage Ratio.....................................................................................................................................10  Earnings per Share (EPS) ...................................................................................................................................10  Price Earning Ratio (PE) .....................................................................................................................................11  Dividend Payout Ratio .......................................................................................................................................11  Equity Multiplier ................................................................................................................................................12COMPARATIVE STATEMENTS ........................................................................................................................................13 Comparative Figures of Emami Ltd as on 31st March 2010-2011 ............................................................................14 Comparative Analysis ................................................................................................................................................15References.....................................................................................................................................................................16 1
  • Financial Accounts for Managers : Project Report PGDM Exec - Term ICOMPANY PROFILEHISTORY Emami, which started as a cosmetics manufacturing company in the year 1974,advancing with increased momentum has expanded into Emami Group of Companies oftoday. Even though cosmetics and toiletries continue to be the main thrust area, the othercompanies in the Emami Group are performing equally brilliantly. From health careinstitution to medicines, from real estate to retailing and, from paper to writing instruments,Hospital, Emami is creating one success story after another.Vision A company, which with the help of nature, caters to the consumers’ needs and their innercravings for dreams of better life, in the fields of personal and health care, both in India andthroughout the world.MissionTo sharpen consumer insights to understand and meet their needs with value-addeddifferentiated products which are safe, effective & fast. To integrate our dealers, distributors,retailers and suppliers into the Emami family, thereby strengthening their ties with thecompany. To recruit, develop and motivate the best talents in the country and provide themwith an environment which is demanding and challenging. To strengthen and foster in theemployees, strong emotive feelings of oneness with the company. To uphold the principalsof corporate governance and move towards decentralization to generate long termmaximum returns for all stake owners. To contribute whole heartedly towards theenvironment and society and to emerge as a model corporate citizen. 2
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IBoard of Directors & Management TeamBoard of DirectorsThe efficient functioning of this reputed company rests with the following personalities.Shri R S Agarwal ChairmanShri R S Goenka DirectorShri Sushil Kr. Goenka Managing DirectorShri A V Agarwal, DirectorShri Mohan Goenka, DirectorShri H V Agarwal, DirectorShri Viren J Shah, DirectorShri K K Khemka, DirectorShri S N Jalan, DirectorShri Vaidya S Chaturvedi DirectorShri K N Memani DirectorShri S K Todi DirectorManagement teamSmt. P. Sureka Brand DirectorShri Manish Goenka Brand DirectorShri Prasant Goenka Brand DirectorShri Dhiraj Agarwal Media DirectorShri Hari Gupta President – SalesShri Ashok Dasgupta President – OperationShri R.D. Daga Chief of Legal AffairsShri R.K. Surana Sr. V.P. – Purchase & DevelopmentShri N.H. Bhansali Sr. V.P. – FinanceShri S. Rajagopalan Sr. V.P. – ProductionShri R.C. Gattani Sr. V.P. – Projects & DevelopmentShri D. Poddar V.P. – Co-ordinationShri A.B. Mukherjee V.P. – LogisticsShri A. Ghose V.P. – Ayurvedic DivisionShri A.K. Rajput V.P. –OperationsShri S. Grover V.P. – Rural MarketingShri S.K. Mandal G.M. – SystemsShri Vimal Kr. Pande G.M. – SalesShri P.N. Balakrishnan G.M. –TechnicalShri A.K. Joshi Company SecretaryShri H.K.Goenka G.M. – WorksDr. Neena Sharma G.M. – Ayurveda (R&D)Shri Raj Kr. Gupta G.M. – PurchaseShri T.R. Rajan G.M. – ProductionMs. Ratna Sinha Head HR 3
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IProfile of the OrganizationEmami Limited is in the business of manufacturing personal, beauty and health careproducts. The company manufactures herbal and Ayurvedic products through the use ofmodern scientific laboratory practices. This blend enables the company to manufactureproducts that are mild, safe and effective. The companys product basket comprises over 20products, the major being Boroplus Antiseptic Cream, Navratna Oil, Boroplus Prickly HeatPowder, Sona Chandi Chyawanprash and Amritprash, Mentho Plus Pain Balm, Fast Relief,Golden Beauty Talc, Madhuri Range of Products and others. The products are sold across allstates in India and in countries like Nepal, Sri Lanka, the Gulf countries, Europe, Africa andthe Middle East, among others.Emami’s products are manufactured in Kolkata, Puducherry, Guwahati and Mumbai. Thecompany commenced operations at its fully automated manufacturing unit in Amingaon,Guwahati in 2003-04.The companys dispersed manufacturing facilities are complemented with a strong productthroughput, facilitated by a robust distribution network of over 2100 direct distributors and3.9 lakhs retail outlets. With a view to reach its products deeper into the country, directselling has been extended to rural villages. As a result, rural sales increased substantially in2003-04 compared to the previous year. Emami is headquartered in Kolkata. The companysbranch offices are located across 27 cities in India. 4
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IINTRODUCTION TO THE STUDYFinancial statements are prepared and presented for the external users of accountinginformation. As these statements are used by investors and financial analysts to examinethe firm’s performance in order to make investment decisions, they should be prepared verycarefully and contain as much investment decisions, they should be prepared very carefullyand contain as much information as possible. Preparation of the financial statement is theresponsibility of top management. The financial statements are generally prepared from theaccounting records maintained by the firm.Financial performance is an important aspect which influences the long term stability,profitability and liquidity of an organization. Usually, financial ratios are said to be theparameters of the financial performance. The Evaluation of financial performance had beentaken up for the study with “EMAMI LIMITED” as the project.Analysis of Financial performances are of greater assistance in locating the weak spots at theEmami limited eventhough the overall performance may be satisfactory. This further helps in  Financial forecasting and planning.  Communicate the strength and financial standing of the Emami limited.  For effective control of business.Financial statements AnalysisThe financial statements provide some extremely useful information to the extent that thebalance sheet mirrors the financial position on a particular date in terms of the structure ofassets, liabilities and owners’ equity, and so on and the profit and loss account shows theresults of operations during a certain period of time in terms of the revenues obtained andthe cost incurred during the year. Thus, the financial statements provide a summarized viewof the financial position and operations of a firm. Therefore, a lot can be learnt about a firmfrom a careful examination of its financial statements. The analysis of financial statements isthus, an important aid to financial analysis.The focus of financial analysis is on key figures in the financial statements and the significantrelationship that exists between them. The analysis of financial statements is a process ofevaluating the relationship between component parts of financial statements to obtain abetter understanding of the firm’s position and performance. In brief, the financial analysis isthe process of selection, relation and evaluation.Annual Report & Financial Details of Emami Ltd. Emami.pdf Emami Ltd - Financial Details.xlsx 5
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IRATIO ANALYSISRatio analysis is a widely-use tool of financial analysis. It can be used to compare the riskand return relationships of firms of different sizes. It is defined as the systematic use of ratioto interpret the financial statements so that the strengths and weakness of a firm as well asits historical performance and current financial condition can be determined. The term ratiorefers to the numerical or quantitative relationship between two items and variables. Theseratios are expressed as (i) percentages, (ii) fraction and (iii) proportion of numbers. Current RatioThe current ratio is the ratio of total current assets to total current liabilities. It is calculatedby dividing current assets by current liabilities: Current Ratio = Current Assets / Current LiabilitiesThe current assets of a firm, as already stated, represent those assets which can be, in theordinary course of business, converted into cash within a short period of time, normally notexceeding one year and include cash and bank balances, marketable securities, inventory ofraw materials, semi-finished (work-in-progress) and finished goods, debtors net of provisionfor bad and doubtful debts, bills receivable and prepaid expenses. The current liabilitiesdefined as liabilities which are short-term maturing obligations to be met, as originallycontemplated, within a year, consist of trade creditors, bills payable, bank credit, provisionfor taxation, dividends payable and outstanding expenses. In Rs Lac Current Asset Current Liability Current Ratio 31-03-2011 Rs. 58,378.58 Rs. 15,370.05 3.80 31-03-2010 Rs. 41,140.55 Rs. 15,374.66 2.68Analysis : As a conventional rule, a current ratio of 2:1 is considered satisfactory. This ruleis base on the logic that in a worse situation even if the value of current assets becomeshalf, the firm will be able to meet its obligation. The current ratio represents the margin ofsafety for creditors. From the above comparison the fact is depicted that the liquidityposition of the Emami limited is satisfactory because for the given two years, its currentratio is not below the standard ratio 2:1. Quick RatioThe liquidity ratio is a measure of liquidity designed to overcome this defect of the currentratio. It is often referred to as quick ratio because it is a measurement of a firm’s ability toconvert its current assets quickly into cash in order to meet its current liabilities. Thus, it is ameasure of quick or acid liquidity.The acid-test ratio is the ratio between quick assets and current liabilities. Quick Ratio = Quick Assets / Current Liabilities 6
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IThe term quick assets refers to current assets which can be converted into cash immediatelyor at a short notice without diminution of value. Quick Asset = Current Asset - Reserve & Surplus - Inventories In Rs Lac Quick Asset Current Liability Quick Ratio 31-03-2011 Rs. 46,187.47 Rs. 15,370.05 3.01 31-03-2010 Rs. 33,279.58 Rs. 15,374.66 2.16Analysis : As a quick ratio of 1:1 is considered satisfactory as a firm can easily meet allcurrent claims. It is a more rigorous and penetrating test of the liquidity position of a firm.From the data above, it can be said that the liquidity position of the Emami limited issatisfactory because the quick ratio is not below the standard ratio of 1:1. Return on Assets (ROA)Its an indicator of how profitable a company is relative to its total assets. ROA gives anidea as to how efficiently the assets of the company is being utilized to generate earnings. Itis calculated by dividing a companys annual earnings by its total assets. ROA = Net Income / Total Assets In Rs Lac Net Income Total Assets ROA 31-03-2011 Rs. 22,749.22 Rs. 92,609.12 0.25 31-03-2010 Rs. 16,540.27 Rs. 88,538.42 0.19Analysis : As per the data above, Emami had 25% ROA in 2010-11 whereas 19% in 2009-10. This indicates that it is converting its assets into profits more efficiently now thanprevious year. It indicates that the management is making more profit from the investment.This ratio can be used to attract investors as they can expect more return out of theirinvestment. Return on Equity (ROE)This is also known as return on net worth or return on shareholders fund. The preferenceshareholders get the dividend on their holdings at a fixed rate and before dividend to equityshareholders, the real risk remains with the equity shareholders. Moreover, they are theowners of total profits earned by the firms after paying dividend on preference shares.Therefore this ratio attempts to measure the firm’s profitability in terms of return to equityshareholders. This ratio is calculated by dividing the profit after taxes and preferencedividend by the equity capital. ROE = Net Income / Equity Capital 7
  • Financial Accounts for Managers : Project Report PGDM Exec - Term I In Rs Lac Net Income Equity Capital ROE 31-03-2011 Rs. 22,749.22 Rs. 72,561.94 0.31 31-03-2010 Rs. 16,540.27 Rs. 64,832.98 0.26Analysis : This indicates the companys efficiency in converting the capital investment intoprofit. As we can see, the ROE of Emami Ltd was 31% in 2010-11 as compared to 26% in2009-10. This means that the company has comparatively generated more profit out of theinvestment this year. Profit MarginIt is a ratio of profitability calculated as income divided by revenues, or profits divided bysales. It measures how much out of every rupee of sales a company actually keeps inearnings. Profit margin is very useful when comparing companies in similar industries. Ahigher profit margin indicates a more profitable company that has better control over itscosts compared to its competitors. Profit Margin = PBIT / Total Sales In Rs Lac PBIT Sales Profit Margin 31-03-2011 Rs. 26,749.47 Rs. 1,22,115.39 0.22 31-03-2010 Rs. 20,057.92 Rs. 1,00,685.42 0.20Analysis : Emamis profitability of 22% in 2010-11 as compared to other companies likeGillette India (8%) is very good. As per the data above, the profit has also increased by 2%from the previous years profit. So, its generating more profit from its sales this year. Asset Turnover RatioAsset turnover is the amount of sales generated for every dollars worth of assets. Itmeasures a firms efficiency at using its assets in generating sales or revenue. The higherthe number the better. It also indicates pricing strategy: companies with low profit marginstend to have high asset turnover, while those with high profit margins have low assetturnover. Asset Turnover = Revenue / Total Assets In Rs Lac Revenue Total Assets Asset Turnover 31-03-2011 Rs. 1,22,115.39 Rs. 92,609.12 1.32 31-03-2010 Rs. 1,00,685.42 Rs. 88,538.42 1.14Analysis : As shown above, the company is generating more sales from the total assetsemployed when compared to previous year. It shows a rise in utilization of asset to generatesales by 18%. This indicates that the company is utilizing its assets more efficiently. 8
  • Financial Accounts for Managers : Project Report PGDM Exec - Term I Debtors Turnover RatioAn accounting measure used to quantify a firms effectiveness in extending credit as well ascollecting debts. The debtors turnover ratio is an activity ratio, measuring how efficiently afirm uses its assets. By maintaining debtors, firms are indirectly extending interest-freeloans to their clients. A high ratio implies either that a company operates on a cash basis orthat its extension of credit and collection of accounts receivable is efficient. Debtors Turnover = Sales / Debtors In Rs Lac Revenue Debtors Debtors Turnover 31-03-2011 Rs. 1,22,115.39 Rs. 9,127.70 13.38 31-03-2010 Rs. 1,00,685.42 Rs. 7,273.47 13.84Analysis : The figure in the above table indicates a pretty high Debtor Turnover Ratio,hence, it indicates that Emami has a pretty good credit collection policy. Inventory Turnover RatioIt is an indication of the velocity of the movement of the stock during the year. In case ofdecrease in sales, this ratio will decrease. This serves as a check on the control of stock in abusiness. This ratio will reveal the excess stock and accumulation of obsolete or damagedstock. The ratio of net sales to stock is satisfactory relationship, if the stock is more thanthree-fourths of the net working capital. This ratio gives the rate at which inventories areconverted into sales and then into cash and thus helps in determining the liquidity of a firm. Inventory Turnover = Cost of Goods Sold / Inventory In Rs Lac Cost of Goods Sold Inventory Inventory Turnover 31-03-2011 Rs. 51,132.04 Rs. 12,191.11 4.19 31-03-2010 Rs. 38,204.41 Rs. 7,860.97 4.86Analysis : The table above shows that the inventories are converted 4 times into saleswhich is a good number as compared to a few other companies in the same sector. Thoughthe ratio has decreased in 2010-11 as compared to 2009-10, its still a satisfactory number. Debt to Equity RatioThis ratio indicates the extent to which debt is covered by shareholders’ funds. It reflects therelative position of the equity holders and the lenders and indicates the company’s policy onthe mix of capital funds. It indicates to what extent the firm depends upon outsiders for itsexistence. For the creditors, this provides a margin of safety. For the owners, it is useful tomeasure the extent to which they can gain the benefits of maintaining control over the firmwith a limited investment:” The debt-equity ratio states unambiguously the amount of assets 9
  • Financial Accounts for Managers : Project Report PGDM Exec - Term Iprovided by the outsiders for every one rupee of assets provided by the shareholders of thecompany. Debt to Equity Ratio = Total Debt / Total Equity In Rs Lac Total Debt Equity Capital Debt to Equity Ratio 31-03-2011 Rs. 22,937.47 Rs. 72,561.94 0.32 31-03-2010 Rs. 25,905.71 Rs. 64,832.98 0.40Analysis : The lower the ratio, the better is the companys status to pay off its debts. Theabove table indicates that the Total Debt of the company has decreased from 2009-10 to2010-11 and the Equity Capital has increased. So, the Debt to Equity Ratio has alsodecreased when compared to the previous years data. Hence, we can conclude that thecompanys status to pay off its debt is very good. Interest Coverage RatioThe times interest earned shows how many times the business can pay its interest bills fromprofit earned. Present and prospective loan creditors such as bondholders, are vitallyinterested to know how adequate the interest payments on their loans are covered by theearnings available for such payments. Owners, managers and directors are also interested inthe ability of the business to service the fixed interest charges on outstanding debt. It isalways desirable to have profit more than the interest payable. In case profit is either equalor lesser than the interest, the position will be unsafe. It will show that there this nothingleft for the shareholders and the position of the lendors is also unsafe. A high ratio is a signof low burden of debt servicing and lower utilization of borrowing capacity. From the pointsof view of creditors, the larger the coverage, the greater the ability of the firm to handlefixed charges liabilities and the more assessed the payment of interest to the creditors. Incontrast the low ratio signifies the danger the signal that the firm is highly dependent onborrowings and its earnings cannot meet obligations fully. Interest Coverage Ratio = PBIT / Interest In Rs Lac PBIT Interest Interest Coverage 31-03-2011 Rs. 27,930.22 Rs. 1,180.75 23.65 31-03-2010 Rs. 22,152.44 Rs. 2,094.52 10.58Analysis : The Interest coverage ratio is increasing from the previous year. A high ratio is asign of low burden of debt servicing. So, the company is more secure in term of paying of itsdebt interests. Therefore this ratio is satisfactory to the company. Earnings per Share (EPS)The portion of a companys profit allocated to each outstanding share of commonstock. Earnings per share serves as an indicator of a companys profitability. Earnings per 10
  • Financial Accounts for Managers : Project Report PGDM Exec - Term Ishare is generally considered to be the single most important variable in determining ashares price. It is also a major component used to calculate the price-to-earnings valuationratio. EPS = ( PAT - Preference Dividend ) / No. of Outstanding Shares In Rs Lac PAT - Pref Div. No. Of Shares EPS 31-03-2011 Rs. 22,749.22 1,513.12 15.03 31-03-2010 Rs. 16,540.27 1,513.12 10.93Analysis : The increase in EPS indicates that there is more profit attached to eachoutstanding share. This is a good sign for the shareholders in terms of trusting the company. Price Earning Ratio (PE)Its a valuation ratio of a companys current share price compared to its per-share earnings.A high P/E suggests that investors are expecting higher earnings growth in the futurecompared to companies with a lower P/E. However, the P/E ratio doesnt tell us the wholestory by itself. Its usually more useful to compare the P/E ratios of one company to othercompanies in the same industry, to the market in general or against the companys ownhistorical P/E. It would not be useful for investors using the P/E ratio as a basis for theirinvestment to compare the P/E of a technology company (high P/E) to a utility company (lowP/E) as each industry has much different growth prospects. PE Ratio = Market Value per Share / EPS In Rs Lac Share Market Price EPS PE Ratio 31-03-2011 Rs. 398.00 Rs. 15.03 26.47 31-03-2010 Rs. 312.50 Rs. 10.93 28.59Analysis : From the above table we see that the Market Price of Emami share has increasedby approximately 27% where as the EPS has increased by almost 50%. This caused thedecrease in the PE ration of the company from 2009-10 to 2010-11. Dividend Payout RatioThe percentage of earnings paid to shareholders in dividends. The payout ratio provides anidea of how well earnings support the dividend payments. More mature companies tendto have a higher payout ratio. Dividend Payout = Dividend / PAT In Rs Lac Dividend PAT Dividend Payout 31-03-2011 Rs. 5,295.91 Rs. 22,749.22 0.23 31-03-2010 Rs. 4,539.35 Rs. 16,540.27 0.27 11
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IAnalysis : This indicates the percentage of Profit that was distributed as dividend to theshare holders. As per the data we can see that the profit increased by 37.5% whencompared to the previous year, but the increase in distributed divided was 16.67%. Hence,we can conclude that, the company retained major part of the profit rather than distributingit to the shareholders. Equity MultiplierIt measures the financial leverage of a company. In other words, this ratio shows acompanys total assets per rupee of stockholders equity. A higher equity multiplier indicateshigher financial leverage, which means the company is relying more on debt to finance itsassets. Equity Multiplier = Total Assets / Total Equity Capital Equity In Rs Lac Total Assets Capital Equity Multiplier 31-03-2011 Rs. 92,609.12 Rs. 72,561.94 1.28 31-03-2010 Rs. 88,538.42 Rs. 64,832.98 1.37Analysis : We can see that the total assets of the company is more than its Equity Capital,hence, its relying a lot on debts to finance its assets. So, it has a high financial leveragewhich save a lot of tax to the company. Though we see from the ratio that it has decreasedfrom the previous year, which means it has paid off some of its debts. 12
  • Financial Accounts for Managers : Project Report PGDM Exec - Term ICOMPARATIVE STATEMENTSComparative study of financial statement is the comparison of the financial statement of thebusiness with the previous year’s financial statements and with the performance of othercompetitive enterprises, so that weaknesses may be identified and remedial measuresapplied. It can be prepared for both types of financial statements i.e., Balance sheet as wellas profit and loss account. The comparative profits and loss account will present a review ofoperating activities of the business. The comparative balance shows the effect of operationson the assets and liabilities that change in the financial position during the period underconsideration.Comparative analysis is the study of trend of the same items and computed items into ormore financial statements of the same business enterprise on different dates. Thepresentation of comparative financial statements, in annual and other reports, enhances theusefulness of such reports and brings out more clearly the nature and trends of currentchanges affecting the enterprise.While the single balance sheet represents balances of accounts drawn at the end of anaccounting period, the comparative balance sheet represent not nearly the balance ofaccounts drawn on two different dates, but also the extent of their increase or decreasebetween these two dates. The single balance sheet focuses on the financial status of theconcern as on a particular date, the comparative balance sheet focuses on the changes thathave taken place in one accounting period. The changes are the direct outcome ofoperational activities, conversion of assets, liability and capital form into others as well asvarious interactions among assets, liability and capital. 13
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IComparative Figures of Emami Ltd as on 31st March 2010-2011The below vital figures has been extracted from the Balance Sheet and Profit & Loss A/C ofEmami Ltd. Mar, 2011 Mar, 2010 Change Percentage Particulars Rupees in Lacs in Value ChangeTotal Sales/Revenue A Rs. 1,22,115.39 Rs. 1,00,685.42 Rs. 21,430 21.28 %Cost of Goods Sold B Rs. 51,132.04 Rs. 38,204.41 Rs. 12,928 33.84 %PAT C Rs. 22,749.22 Rs. 16,540.27 Rs. 6,209 37.54 %Tax D Rs. 4,000.25 Rs. 3,517.65 Rs. 483 13.72 %Interest E Rs. 1,180.75 Rs. 2,094.52 Rs. (914) (43.63) %PBIT F Rs. 26,749.47 Rs. 20,057.92 Rs. 6,692 33.36 %Current Asset G Rs. 58,378.58 Rs. 41,140.55 Rs. 17,238 41.9 %Current Liability H Rs. 15,370.05 Rs. 15,374.66 Rs. (5) (.03) %Total Depreciation I Rs. 31,452.17 Rs. 20,261.85 Rs. 11,190 55.23 %Reserve & Surplus J Rs. 68,301.65 Rs. 61,937.17 Rs. 6,364 10.28 %Inventories K Rs. 12,191.11 Rs. 7,860.97 Rs. 4,330 55.08 %Prepaid Expense L Rs. 0.00 Rs. 0.00 Rs. 0 -Fixed Assets Rs. 48,892.48 Rs. 56,705.23 Rs. (7,813) (13.78) %Liquid Assets Rs. 43,008.53 Rs. 25,765.89 Rs. 17,243 66.92 %Investments Rs. 708.11 Rs. 6,208.46 Rs. (5,500) (88.59) %Total Asset N Rs. 92,609.12 Rs. 88,679.58 Rs. 3,930 4.43 %Quick Asset (F-J-K) O Rs. 46,187.47 Rs. 33,279.58 Rs. 12,908 38.79 %Preference Dividend Q Rs. 0.00 Rs. 0.00 Rs. 0 -Share Capital R Rs. 1,513.12 Rs. 1,513.12 Rs. 0 0%Share Current Face Value S Rs. 1.00 Rs. 1.00 Rs. 0 0%Long Term Loan T Rs. 22,937.47 Rs. 25,905.71 Rs. (2,968) (11.46) %Short Term Loan U Rs. 0.00 Rs. 0.00 Rs. 0 -Total Debtors V Rs. 9,127.70 Rs. 7,273.47 Rs. 1,854 25.49 %P/L A/c Balance W Rs. 2,747.17 Rs. 1,382.69 Rs. 1,364 98.68 %Share Holders Equity(J+R+W) X Rs. 72,561.94 Rs. 64,832.98 Rs. 7,729 11.92 %Share Market Price Y Rs. 398.00 Rs. 312.50 Rs. 86 27.36 %Number of Shares (R/S) Z 1,513.120 1,513.120 Rs. 0 0%Proposed Dividend AA Rs. 5,295.91 Rs. 4,539.35 Rs. 757 16.67 % 14
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IComparative AnalysisThe comparative analysis of the vital numbers from the Balance Sheet and Profit & Loss A/Cof year 2010-11 and 2009-10 of Emami Ltd are as below -  Increase in Sales by 21.28%  Increase in Net Profit by 37.54%  Increase in tax by 13.72%. This was due to the increase in PAT of the company.  Decrease in interest by 43.63%. This indicates the reduction in debts/loans of the company. The decrease in Long Term Loan was 11.46%  Decrease in Fixed Assets by 13.78%. This is because fixed assets worth of Rs 7813 were sold off.  Companies Cash Reserve increased by 10.28% due to increase in sales and profit retention. This justifies the decrease in Dividend Payout Ratio by 0.04%.  Approx 89% of the investments were liquidated. A part of the recovered investment was utilized to pay off the long term loans.  Total Net worth was increased by approx 12%. The reason for this increase was the increase in the companys profit and the earnings retention.  Increase in debtors by more than 25%.  No change in share capital or share face value.  Increase in share market price by 27.36% comparing the value on year ends.  Increase in Current Assets by Rs. 17,238 Lac (42%) due to increase in Inventories, Debtors, Cash and Short Term Loans.  No Short Term Loan taken by the company.  Increase in distributed dividend by Rs. 757 Lac (16.67%) compared to previous year. 15
  • Financial Accounts for Managers : Project Report PGDM Exec - Term IReferences  www.investopedia.com  www.emamigroup.com  www.wikipedia.com  A STUDY ON FINANCIAL PERFORMANCE USING RATIO ANALYSIS, A.GAYATHRIDEVI 16