Kingfisher

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  • 1. Group Number – 6Dheeraj ChaubeyMohit ShuklaMrigankshiVenkat
  • 2. Introduction • Owned by “Dr. Vijay Mallya” of United Beverages Group. • Started its operations on May 9, 2005, a flight from Mumbai to Delhi. • Kingfisher the largest carrier in the shrinking domestic Indian market • December 2009, Kingfisher Airlines had the second largest share in Indias domestic air travel market. • Passenger growth increased 61.1% year-on-year in Mar-2009
  • 3. Rise Of The King• First airline in India to operate with all new aircrafts.• First airline in the country to order the “Airbus A380”.• Offers several unique services to its customers.• First Indian airline to have in- flight entertainment (IFE) systems on every seat even on domestic flights.• Alliance was formed with Dish TV to provide live TV in-flight.
  • 4. Achievements• Kingfisher Red, Kingfisher Airlines low-cost class on domestic routes.• Kingfisher Airlines has received three global awards at the Skytrax  World Airline Awards 2010• Brand Leadership Award.• Indias only 5 Star airline, rated by Skytrax and 6th airline in the world
  • 5. Start of the crisis• Ever since the airline commenced operations in 2005, it has been reporting losses.• In 2008, more losses due to economic downturn.• After acquiring Air Deccan, Kingfisher suffered a loss of over 1,000 crore for three consecutive years.• By early 2012, the airline accumulated losses of over Rs 7,000 crore
  • 6. Contd….• By Feb 2012, Kingfisher has been declared NPA by following banks – SBI – Bank of Baroda – PNB – IDBI – Central bank – BOI – Corporation Bank• Loss> US$1.50 billion
  • 7. Total Dues
  • 8. Current Ratio• A liquidity ratio that measures a companys ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations. CR = Current Assets / Current Liabilities.Current Asset :- All assets that are expected to be converted into cash within one year Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash.Current Liabilities:- A companys debts or obligations that are due within one year. Current liabilities include short term debt, accounts payable, accrued liabilities and other debts.
  • 9. Current Ratio (Rs in Crs)
  • 10. Quick Ratio• An indicator of a companys short-term liquidity. The quick ratio measures a companys ability to meet its short-term obligations with its most “liquid assets”. The higher the quick ratio, the better the position of the company QR= Liquid Assets/ Current Liabilities.. [Liquid Assets = Current Assets – (Inventories + prepaid expenses)]Liquid Asset:- Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.
  • 11. Quick Ratio (Rs in Crs)
  • 12. Gross Profit Ratio• Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Gross Profit Ratio = (Gross profit / Net sales) × 100 Net sales means that sales minus sales returns. Gross profit would be the difference between net sales and cost of goods sold
  • 13. Gross Profit Ratio
  • 14. DEBT-EQUITY RATIO
  • 15. DEBT-EQUITY RATIOYEAR 2011 2010 2009 2008 2007TOTAL DEBT 7057.08 7922.60 5665.56 934.38 916.71YEAR 2011 2010 2009 2008 2007TOTAL EQUITY -2951.20 -3870.47 -2125.35 188.78 373.68YEAR/ RATIO 2011 2010 2009 2008 2007D/B RATIO -2.39 (0.00) -2.04 (0.00) 2.66 ( 0.00) 4.94 2.45 (Rupees in crores)
  • 16. FIXED ASSET TURNOVER RATIO
  • 17. FIXED ASSET TURNOVER RATIOYEAR 2011 2010 2009 2008 2007F.S RATIO 2.90 2.57 4.73 5.80 5.52 (Rupees in crores)
  • 18. NET WORKING CAPTIAL• It is the difference of Current Assets and Current Liabilities.• NWC = Current Assets – Current Liabilities• Net Working Capital is a measurement of the operating liquidity available for a company to use in developing and growing its business.• If NWC is high, it indicates that an entity has a working capital deficiency,• If NWC is low, it indicates that an entity has a working capital deficit.
  • 19. NET WORKING CAPTIALYEAR 2011 2010 2009 2008 2007C.A 3105.10 2637.17 2199.69 659.59 1090.06YEAR 2011 2010 2009 2008 2007C. L 4172.28 3554.57 3540.23 676.60 493.49YEAR/ RATIO 2011 2010 2009 2008 2007NWC -1067.18 -917.4 -1340.54 -17.01 596.57 (Rupees in crores)
  • 20. EARNINGS PER SHARE• Earnings per share serves as indicator of a companys profitability. EPS= Net profit available to equity-holders Number of ordinary shares outstanding• Earnings per share is generally considered to be the single most important variable in determining a shares price.
  • 21. EARNINGS PER SHAREYEAR 2011 2010 2009 2008 2007EPS -20.64 -61.95 -60.50 -13.85 -30.97 (Rupees in crores)
  • 22. FINANCIAL LEVERAGE• The degree to which an investor or business is utilizing borrowed money. FINANCIAL LEVERAGE= TOTAL ASSETS OWNER’S EQUITY.• Financial leverage is a way for achieving bigger results with relatively small amount of capital/financial resources.• Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future.
  • 23. FINANCIAL LEVERAGEYEAR 2011 2010 2009 2008 2007F.L -1.39 -1.04 -1.66 5.94 3.45 (Rupees in crores)
  • 24. Equity Ratio• The equity ratio is a financial ratio indicating the relative proportion of equity used to finance a companys assets. Equity Ratio=(Total Shareholders Equity)/(Total Assets)• A high ER would expose creditors to a higher risk.• ER should neither be very high nor very low.
  • 25. Equity Ratio2011 2010 2009 2008 2007 -2951.20 -3870.47 -2125.35 188.78 373.68 4105.88 4052.13 3540.21 1123.16 1290.39 -0.71877 -0.955169 -0.600345 0.168079 0.289586
  • 26. DEBT TO TOTAL CAPITAL RATIO :• The ratio measures a companys capital structure , financial solvency , and degree of leverage, at a particular point in time. Debt To Total Capital Ratio=Total Debt/Total AssetsDebt: Is an obligation owed by one party (the debtor) to a second party
  • 27. DEBT TO TOTAL CAPITAL RATIO :2011 2010 2009 2008 2007 7057.08 7922.60 5665.56 934.38 916.71 4105.88 4052.13 3540.21 1123.16 1290.39 1.7187 1.9551 1.6003 0.8319 0.71041 (Rupees in crores)
  • 28. Inventory Turnover Ratio• It is a measure of the number of times inventory is sold or used in a time period such as a year.• Inventory Turnover Ratio :(Cost of goods sold) / (Average Inventory).• Cost of goods sold = (Sales) – (Gross Profit).• Cost of goods sold (COGS) refer to the inventory costs of those goods a business has sold during a particular period.• Average Inventory = (Opening Stock + Closing Stock) / 2.• Inventory : describes the goods and materials that a business holds for the ultimate purpose of resale. Indicates how fast inventory is sold. High ITR indicates higher liquidity.
  • 29. Inventory Turnover Ratio 2011 2010 2009 2008 2007 5289.34 4747.92 5822.37 1781.46 2062.61 182.2 159.285 97.945 55.13 -29.03040615 29.80770317 59.44530093 32.31380374 -
  • 30. RETURN ON CAPITAL EMPLOYED• A ratio that indicates the efficiency and profitability of a companys capital investments. ROCE = EBIT-OTHER INCOME AVRAGE LONGTERM ASSET USED + NWC• ROCE should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders earnings.
  • 31. RETURN ON CAPITAL EMPLOYEDRATIO/ 2011 2010 2009 2008 2007YRROCE 0 0 0 0 0
  • 32. INTEREST COVERAGE RATIO• A ratio used to determine how easily a company can pay interest on outstanding debt. INTEREST COVERAGE RATIO = EBIT INTEREST• The lower the ratio, the more the company is burdened by debt expense. An interest coverage ratio below 1 indicates the company is not generating sufficient revenues to satisfy interest expenses.
  • 33. INTEREST COVERAGE RATIORATIO/ YR 2011 2010 2009 2008 2007ICR -0.16 -0.87 -1.77 -7.76 -10.29
  • 34. CORPORATE GOVERNANCE• Act ethically, deli gently, openly, honestly in good faith with integrity.• Act in a good faith responsibility and due fair.• Dedicate best effort for welfare of the customer.• Conduct our self in a professional, courtesy and respectful manner.
  • 35. CORPORATE GOVERNANCE• Uphold legal standard vigoursly.• Act for the welfare investor and stake holder.• Involve in the best interest of company and the stakeholder.• Maintain the confidentiality of all material non-public information about thecompany its business and affairs.
  • 36. Saving The Ship• All 18 lenders agreeing to cut interest rates and convert part of loans to equity.• Lenders have converted Rs.650 crore debt into preference shares which will be converted into equity when the airline lists on the Luxembourg Stock Exchange by selling GDR’s.• Besides the Rs.1,400 crore debt which will be converted into preference shares.• Kingfisher Airlines has pledged its brand as collateral with its lender consortium for Rs.4,100 crore.
  • 37. Result Total # From To Months Cost Net Profit EPS Income 1 Apr-05 Jun-06 15 1,352 1,689 -337 -68 2 Jul-06 Jun-07 12 2,142 2,562 -420 -42 3 Jul-07 Mar-08 9 1,546 1,734 -188 -11 4 Apr-08 Mar-09 12 5,577 7,186 -1,609 -55 5 Apr-09 Mar-10 12 5,271 6,918 -1,647 -54 6 Apr-10 Mar-11 12 6,496 7,523 -1,027 -16 7 Apr-11 Sep-11 6 3,410 4,142 -732 n/aTotal     78 25,793 31,754 -5,960
  • 38. Thank You