Financial Analysis of Textile Companies

FRA Project (WMP – 1)
pg. 1
FINANCIAL ACCOUNTING PROJECT
TEXTILE & PAGE INDUSTRIES
Raymond
Bombay Dyeing
Page Industries
Submitted By
Akshay Paliwal -WMP14003
Jitender Dhindsa – WMP14023
Neeraj Khattar – WMP14028
Nitesh Sharma - WMP14033
Swati Lal - WMP14058
Pranav Kumar – WMP14067

pg. 2
Table of Contents
Introduction ............................................................................................................................................4
About Raymond Industries .................................................................................................................4
About Bombay Dyeing ........................................................................................................................4
About Page Industries.........................................................................................................................4
Horizontal Analysis of Raymond Industries for five years ......................................................................5
Balance sheet analysis ........................................................................................................................5
Profit and loss statement analysis ......................................................................................................6
Inferences from the horizontal analysis .............................................................................................7
Trend Analysis for Raymond Industry.....................................................................................................8
Income Statement ..............................................................................................................................8
Inferences: ..........................................................................................................................................8
Balance Sheet......................................................................................................................................9
Cash Flow............................................................................................................................................9
Trend Analysis for Page Industries........................................................................................................10
Income Statement ............................................................................................................................10
Inferences: ........................................................................................................................................10
Balance Sheet....................................................................................................................................11
Inferences: ........................................................................................................................................11
Cash Flow..........................................................................................................................................11
Inferences .........................................................................................................................................12
Trend Analysis for Bombay Dyeing Industries ......................................................................................12
Income Statement ............................................................................................................................12
Inferences: ........................................................................................................................................12
Balance Sheet....................................................................................................................................13
Inferences: ........................................................................................................................................13
Cash Flow..........................................................................................................................................14
Inferences: ........................................................................................................................................14
DuPont Analysis ....................................................................................................................................14
Raymond...........................................................................................................................................15
Inferences .....................................................................................................................................16
Page Industries..................................................................................................................................16
Inferences .....................................................................................................................................17

pg. 3
Bombay Dyeing.................................................................................................................................17
Inferences .....................................................................................................................................18
Liquidity Ratio and Analysis ..................................................................................................................18
Current Ratio.....................................................................................................................................18
Quick Ratio........................................................................................................................................19
Receivables Turnover Ratio ..............................................................................................................20
Solvency Ratio and Analysis..................................................................................................................21
Debt to Equity Ratios ........................................................................................................................21
Liability to Equity Ratio .....................................................................................................................22
Interest Cover ...................................................................................................................................22
Industry Comparative Profit Margin.....................................................................................................23
Profitability Ratio Analysis ................................................................................................................23
Capital Market Standing .......................................................................................................................24
Price Book Value Ratio......................................................................................................................24
Average Price Earnings Ratio ............................................................................................................24
Earning Per Share..............................................................................................................................25
Dividend Yield ...................................................................................................................................26

pg. 4
Introduction
About Raymond Industries
Raymond Group is an Indian branded fabric and fashion retailer, incorporated in 1925. It produces
suiting fabric, with a capacity of producing 31 million meters of wool and wool-blended fabrics.
Gautam Singhania is the chairman and managing director of the Raymond group. The group owns
apparel brands like Raymond, Raymond Premium Apparel, Park Avenue, Park Avenue Woman Colour
plus & Parx. All the brands are retailed through 'The Raymond Shop' (TRS), with a network of over 700
retail shops spread across India and overseas, in over 200 cities.
About Bombay Dyeing
Bombay Dyeing (full name: The Bombay Dyeing & Mfg. Co. Ltd., established on 23 August 1879) is the
flagship company of the Wadia Group, engaged primarily in the business of Real Estate, Polyester
Staple Fibre and Retail -Textiles. The Company has extended its presence in Realty Sector, Polyester
Staple Fibre and Retail-Textile to cater to the evolving aspirations of its customers and enhancing their
quality of life. The Company is headed by Mr Nusli N. Wadia, Chairman and its Managing Director is
Mr. Jehangir N. Wadia.
About Page Industries
Page Industries Limited is engaged in the business of manufacturing and trading of garments. The
Company offers knitted garments. The Company offers a range of products for men, women and
children. The Company is engaged in the manufacturing, distribution and marketing of Jockey
products. The Jockey brand is available in over 1400 cities and towns. It was founded in 1995 by the
Genomal family. It became a public enterprise on 29 July 2007 at a stock price of 600 INR and today
has a value of 11.7 billion INR

pg. 5
Horizontal Analysis of Raymond Industries for five years
Horizontal analysis presents comparative information. Here we are comparing data of 5 years. This
analysis calculates the amount and percentage changes from previous year to current year as
percentage change is more useful in appreciating the magnitude of the change.
Balance sheet analysis

pg. 6
Profit and loss statement analysis

pg. 7
Inferences from the horizontal analysis
1. Net profit has increased significantly from year 2016 and 2017 in 2018. It is almost double from year
2014.
2. Expenses has also increased from previous year, they are almost twice the value as that in previous
year but has reduced significantly from year 2014.
3. Tax expenses rose tremendously in year 2018 which almost thrice the value as that in year 2017 and
from year 2014 it kept on increasing. In only 2017, tax expenses were less and similar to that in 2014.
4. Sales has increased significantly from 2016 and 2017 but comparable to year 2014 sales has gone
down.
5. Another way to look at performance is to compare the company’s revenue growth with asset growth.
Total assets has gone up significantly from past 4 years and now they are about 15.89% which is a
much higher value than previous years.
6. Total current liabilities was much higher in year 2016 comparable to all previous years and year 2018.
But liabilities in 2018 has reduced to a significant value comparable to previous year.
7. Total capital and liabilities has increased to more than twice the value in year 2018 comparable to
previous years as reserves and surplus have increased tremendously with increase in borrowings in
year 2018.

pg. 8
Trend Analysis for Raymond Industry
Income Statement
Inferences:
Raymond too show almost constant profit, but the returns is quite less in comparison to the page
industries here it ranges from 7 – 10 over the years.

pg. 9
Balance Sheet
Cash Flow
We see a lot of fluctuations in cash from revenues over the years for Raymond most probably because
of investment activities, we see in 2015 and 2014 maybe a lot of investments were sold and thus high
investment-cash.
We can see a similar activity in financial operations where there is a huge decrease from financial cash
might be because of some loan given by the firm or some similar activity.

pg. 10
Trend Analysis for Page Industries
Income Statement
Inferences:
➢ Page industry shows almost a constant profit with respect to their revenue over the years. Ranging
from 19-21 over the years.
➢ Tax paid by the firm over the year in comparison to its revenue is also almost similar which is direct
implication of the first point

pg. 11
Balance Sheet
Inferences:
➢ Free reserve is gradually increasing over the years showing their investment activities are paying off
and has more money to pay as dividend which shows a positive sign for investors.
➢ The firm total assets are reducing at a constant rate but not too drastically probably because of the
depreciation or their high investment activity earlier paying off now.
Cash Flow

pg. 12
Inferences
There is a kink in the trend in 2014 where they got their maximum cash from their investments
whereas in all the other years they lost most of the money from their investments, probably a huge
sale of investments occurred during this period.
Trend Analysis for Bombay Dyeing Industries
Income Statement
Inferences:
This firm is showing positive sign from the gross profit increasing over the year with respect to its
total revenue. Starting from 9 to 21 % of the revenue which is quite remarkable.

pg. 13
Balance Sheet
Inferences:
There has been a drastic decrease in the current liabilities in 2017 with respect to its current assets.
Free reserve has been maintained at a good standard over the years showing a good sign for
investors even though the gross profit was not always so high w.r.t. the revenue.

pg. 14
Cash Flow
Inferences:
Here again we see a lot of fluctuation in cash flow from operation which shows signs of high
investment or financial activities in 2014 and 2015.
DuPont Analysis
The return on assets (ROA) ratio developed by DuPont for its own use is now used by many firms to
evaluate how effectively assets are used. It measures the combined effects of profit margins and
asset turnover. The return on equity (ROE) ratio is a measure of the rate of return to stockholders.
This analysis enables the analyst to understand the source of superior (or inferior) return by
comparison with companies in similar industries (or between industries).
ROA and ROE ratio
The return on assets (ROA) ratio developed by DuPont for its own use is now used by many firms to
evaluate how effectively assets are used. It measures the combined effects of profit margins and
asset turnover
The return on equity (ROE) ratio is a measure of the rate of return to stockholders. Decomposing the
ROE into various factors influencing company performance is often called the Du Pont system

pg. 15
The following diagram explains Dupont Analysis.
Raymond
Ratio Mar '14 Mar '15 Mar '16 Mar '17 Mar '18
Net Profit Margin 10.6 8.0 7.5 5.2 7.2
Asset Turnover ratio 1.0238 1.15422 1.0442 1.01923 0.965706
Financial Leverage 2.9003 1.72914 1.841 1.60302 1.144586
Return on Equity 31.474 15.9665 14.417 8.49600 7.958406
Return on Asset 1.0238 1.15422 1.0442 1.01923 0.965706

pg. 16
Inferences
➢ Return on equity is decreasing which would be a concern for the stake holders and investors.
➢ This is due to the profit being stagnant or decreasing over the past years.
➢ If we look at the return on the assets the we find that they are constant over the years, probably
because of no new investments and similar strategy over the years causing similar profit
investments.
Page Industries
Return on Equity 5.0924223 4.5541588 2.8238167 2.5149976 2.5447499
Return on Asset 1.8573548 1.7327888 1.8730582 1.8978966 1.8501693

pg. 17
Inferences
➢ Even here the ROE is decreasing but not to the extent which we saw for Raymond, page industries
are doing much better in terms of
➢ If we look at the net profit Page industries are doing constantly good over the years thus showing a
slightly less decrease in ROE
➢ ROA is also stagnant over the years again could be due to no new investments.
Bombay Dyeing
Return on Equity 17.779 17.33 13.59 20.3 15.178
Return on Asset 0.7058 0.5957 0.627 0.53 0.6564

pg. 18
Inferences
➢ Here we see that Net profit is gradually increasing over the years.
➢ ROE is between 15 – 20 bar which is quite good for the investors and share-holders investing in
Bombay dyeing.
➢ We see a sudden drop in financial leverage in March 18 that can be due to selling of some company
assets.
Liquidity Ratio and Analysis
Current Ratio
➢ A company has negative working capital if the ratio of current assets to liabilities is less than one.
➢ A high working capital ratio isn't always a good thing. It might indicate that the business has too
much inventory or is not investing its excess cash.
➢ A good working capital ratio is considered anything between 1.2 and 2.0. A ratio of less than 1.0
indicates negative working capital, with potential liquidity problems, while a ratio above 2.0 might
indicate that a company is not using its excess assets effectively to generate maximum possible
revenue.

pg. 19
Raymond is particularly performing better having less fluctuation to the current Ratio.
Ratios Year Ending Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
Current Ratio
Page Industry 1.63 1.77 1.57 1.21 1.11
Raymond 0.88 0.87 1.1 1.2 1.18
Bombay Dyeing 1.97 0.77 1.47 1.6 1.22
Quick Ratio
➢ Quick ratio is also known as acid test ratio is supplement to current ratio. It is expected to be at least
1.
➢ A normal liquid ratio is considered to be 1:1. A company with a quick ratio of less than 1 cannot
currently fully pay back its current liabilities.
➢ A normal liquid ratio is considered to be 1:1. A company with a quick ratio of less than 1 cannot
currently fully pay back its current liabilities.
➢ In general, the higher the ratio, the greater the company's liquidity (the better able to meet current
obligations using liquid assets)
Bombay Dyeing is particularly performing better having less fluctuation to the quick Ratio
Quick Ratio
Page Industry 0.64 0.52 0.52 0.54 0.55
Raymond 0.74 1.08 1.14 1.21 1.27
Bombay Dyeing 2.67 1.57 2.66 2.13 1.6
0
0.5
1
1.5
2
2.5
Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
Variation in Current Ratio
Current Ratio PAGE INDUSTRIES
RAYMOND INDUSTRIES Bombay Dyeing

pg. 20
Receivables Turnover Ratio
➢ Receivable turnover measures the efficacy of the firm’s credit policy and collection mechanism and
shows the number of times each year the receivables are turned into cash.
➢ A high ratio implies either that a company operates on a cash basis or that its extension of credit and
collection of accounts receivable is efficient. While a low ratio implies the
➢ Company is not making the timely collection of credit.
Page Industries is particularly performing better having high receivable turnover Ratio
Receivables Turnover Ratio
Page Industry 19.57 19.68 18.59 19.15 18.17
Raymond 4.52 4.08 4.51 5.04 4.87
Bombay Dyeing 15.2 10.23 7.34 10.33 12.88
0
0.5
1
1.5
2
2.5
3
Variations in Quick Ratio
Quick Ratio PAGE INDUSTRIES RAYMOND INDUSTRIES Bombay Dyeing
0
5
10
15
20
25
Variations in Receivables Turnover Ratio
Receivables Turnover Ratio PAGE INDUSTRIES

pg. 21
Solvency Ratio and Analysis
Debt to Equity Ratios
Debt/Equity (D/E) Ratio, calculated by dividing a company's total liabilities by its stockholders' equity,
is a debt ratio used to measure a company's financial leverage. The D/E ratio indicates how much debt
a company is using to finance its assets relative to the value of shareholders' equity.
Page industry is good in Debt-to-equity ratio as it’s more stable and relatively low. Bombay dyeing is
decreasing by repaying the loan or adding fresh issue. But still Bombay dyeing numbers are on the
higher side.
Ratios
Year
Ending Mar '18 Mar '17 Mar '16 Mar '15 Mar '14
Current Ratio
Page Industry 0.06 0.1 0.15 0.35 0.49
Raymond 0.88 1.05 0.95 0.93 1.13
Bombay Dyeing 4.15 6.44 5.4 2.82 2.27
0
1
2
3
4
5
6
7
Variations in Debt to Equity ratio
debt to equity ratios PAGE INDUSTRIES

pg. 22
Liability to Equity Ratio
Measuring total liabilities to equity determines a company's use of financial leverage.
Bombay dyeing has more liabilities as compared to other companies in same sector. Whereas page
Industry has more equity as they have liabilities. It could be they have more cash or retained earnings.
Raymond is doing fairly well in terms of liabilities to equity ratio and seems they have less loans but
more retained earnings / cash with them.
Ratios
Year
Liability to equity ratio
Page Industry 0.04 0.06 0.05 0.09 0.12
Raymond 0.31 0.39 0.62 0.64 0.84
Bombay Dyeing 3.5 2.81 3.22 1.91 1.18
Interest Cover
The interest coverage ratio is used to determine how easily a company can pay their interest
expenses on outstanding debt. The ratio is calculated by dividing a company's earnings before
interest and taxes (EBIT) by the company's interest expenses for the same period.
Page industry is generating good earning and is in good position to pay the outstanding interest. And
it’s increasing per year as well. So, overall Page industry stood outstanding in all the solvency analysis
as compared to Raymond and Bombay Dyeing. Bombay Dyeing seems to be having lot of liabilities and
less cash / earning to pay the interest / loans.
0
0.5
1
1.5
2
2.5
3
3.5
4
Variations in Liability to Equity Ratio
liability to equity ratio PAGE INDUSTRIES

pg. 23
Ratios
Year
lnterest cover
Page Industry 32.11 22.91 23.56 18.6 23.56
Raymond 1.62 1.37 1.94 1.75 1.42
Bombay Dyeing 1.46 0.86 0.7 1.15 1.17
Industry Comparative Profit Margin
Profitability Ratio Analysis
Operating Profit Margin(%)
Page Industry 21.19 19.42 21.14 20.67 21.15
Raymond 21.84 14.36 10.4 10.68 9.2
Bombay
Dyeing 6.95 5.63 8.4 8.58 11
From the above table its states very clearly, the operating profit of Raymond is lowest in the industry
and its consistent for Page Industries and improving for the Bombay Dyeing.
This is due to
➢ Lowest inventory turnover ratio, indicates weak sales and high inventory cost
➢ Lowest Debt turnover ratio
➢ Increasing material cost consumption have reached to 53, compare to Page Ind. 40% and Bombay
Dyeing 43 which is decreasing for both these companies
0
5
10
15
20
25
30
35
Variations in Interest Cover
lnterest cover PAGE INDUSTRIES

pg. 24
Capital Market Standing
Price Book Value Ratio
The price-to-book ratio, or P/B ratio, is a financial ratio used to compare a company's current market
price to its book value. It is also sometimes known as a Market-to-Book ratio. A higher P/B ratio implies
that investors expect management to create more value from a given set of assets, all else equal
(and/or that the market value of the firm's assets is significantly higher than their accounting value)
Page Industries is particularly performing better Price-To-Book Ratio - P/B Ratio. From the data, Page
industry can generate more value from the assets they have. Whereas Bombay Dyeing data
decreases year on year.
Price book value ratio
Page Industry 16.3 19.4 27.7 28.2 24.4
Raymond 1 1.6 1.5 2 2.9
Bombay Dyeing 0.9 0.9 1.1 4.1 6
Average Price Earnings Ratio
The price/earnings ratio (often shortened to the P/E ratio or the PER) is the ratio of a company's stock
price to the company's earnings per share. The ratio is used in valuing companies. A company with a
low PER indicates that the market perceives it as higher risk or lower growth or both as compared to
a company with a higher PER.
0
5
10
15
20
25
30
Variation in Price book value ratio
Price book value ratio PAGE INDUSTRIES

pg. 25
Current year, Bombay Dyeing is good in Average Price Earnings Ratio. The investor sees less risk on
the company. Whereas Raymond has in risk as per investor or shareholders. Page industry is fairly on
average side in Average-Price-Earnings-Ratio.
Average Price earnings ratio
Page Industry 30.9 36.5 57.7 64.5 61
Raymond 14.2 23.7 31.3 109.2 37.7
Bombay
Dyeing 56.5 59.8 -15.1 -10.8 108.7
Earning Per Share
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of
common stock. Earnings per share serves as an indicator of a company's profitability
Page Industries is particularly performing better for EPS. Page industry has shown tremendous result
in current year and given good returns to shareholders. Whereas Bombay dyeing seems finding hard
in sustaining but try to gain confidence in last three years.
Earnings per share
Page Industry 100.9 137.9 175.8 207.6 238.8
Raymond 17.5 18.4 13.9 4.9 23.1
Bombay
Dyeing 1.2 1.2 -4.4 -6.1 1.7
-40
-20
0
20
40
60
80
100
120
Variations in Price Earning Ratio
Average Price earning ratio PAGE INDUSTRIES

pg. 26
Dividend Yield
The dividend yield or dividend-price ratio of a share is the dividend per share, divided by the price
per share. It is also a company's total annual dividend payments divided by its market capitalization,
assuming the number of shares is constant. It is often expressed as a percentage.
Page Industries is particularly performing better Dividend yield (EOY) %. They have given decent
dividend to the shareholder and increasing year-on-year basis. Whereas Raymond has given low
dividend to the shareholders. Though Raymond can give more dividend as compared to Bombay
dyeing as per above analysed data.
Dividend yield
Page Industry 1.6 1.2 0.7 0.6 0.7
Raymond 0.8 0.7 0.7 0 0.3
Bombay Dyeing 1.2 1.1 0.8 1.1 0.5
-50
0
50
100
150
200
250
300
Variations in Earning per share
Earning per share PAGE INDUSTRIES

pg. 27
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Variations in Dividend Yield
Dividend yield PAGE INDUSTRIES

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