Hitachi rename

1 Hitachi India limited.
A
Project Report
On
Hitachi home and life solution
Submitted to:
Prof. Hetal Pandya
N.R. institute of business management
GUJRAT TECHNOLOGY UNIVERSITY
2014-2016

SR.
NO.
NAME OF THE GROUP
MEMBERS
ROLL NO.
1. Ankit Shah NR 14182
2. Arpan Shroff NR 14151
3. Chirag Zala NR 14180
4. Jayant Rajput NR 14119
5. Rahul Jain NR14182
6. Er.Mehul Sinh Rajput NR 14120

INDEX
1. Declaration
2. Acknowledgement
3. Preface
4. Executive Summary
5. Industry Overview
 Mission And Vision
 History
6.Finacial Overview
 Multistep Income Statment
 Horizontal
 Verticle
 Trends Analysis
 Ratio
7.Conclusion.

DECLARATION:-
Title: PROJECT REPORT ON FINACIAL ANALYSIS.
Degree for which the Thesis is submitted: Master of Business Administration
We declare that the presented thesis represents largely our own ideas and work
in our own words. Where others ideas or words have been included, we have
adequately cited and listed in the reference materials. The thesis has been
prepared without resorting to plagiarism. We have adhered to all principles of
academic honesty and integrity. No falsified or fabricated data have been
presented in the thesis. We understand that any violation of the above will cause
for disciplinary action by the Institute, including revoking the conferred degree,
if conferred, and can also evoke penal action from the sources which have not
been properly cited or from whom proper permission has not been taken.
Submitted By: Submitted To:
ANKIT SHAH HETAL PANDYA
ARPAN SHROFF
CHIRAG ZALA
JAYANT RAJPUT
MEHUL SINH RAJPUT
RAHUL JAIN

ACKNOWLEDGEMENT:-
We take this opportunity to render our deep sense of gratitude to our professor,
HETAL PANDYA, Assistant Professor, NRIBM for her constant and valuable
guidance in the truest sense throughout the course of the work. It was her
encouragement and support from the initial to the final level enabled us to
develop an understanding of the topic. Every time we had a problem, we would
rush to her for her advice, and she would never ever let us down. Her timely
suggestions helped us to circumvent all sorts of hurdles that we had to face
throughout our work. we are deeply indebted for her motivation and guidance..
Thanks go out to all our friends as they have always been around to provide
useful suggestions, companionship and created a peaceful research
environment. We wish to acknowledge the continuous support and blessings of
our parents which made this work possible. Although they were physically far
away from us, their immense faith and wish is gratefully acknowledged. Finally
we believe this research experience will greatly benefit our career in the future.

PREFACE
Indian industry is waking up to the challenges thrown in by the market
economy. To survive in this highly competitive scenario, managers are being
pressured to improve quality, increase productivity, cut down waste and
eliminate inefficiency. The collective efforts of the employer and the employee
assume relevance in this context. And this is where human resource
management can play a crucial role.
This Report is submitted for the fulfillment of the requirements for a
Masters Degree in Business Administration.
With great pleasure, we undertake the writing of this report of
summer training because; it is a fact to be proud that we are all of the few
students who are presently undertaking education in a spare of “MASTERS OF
BUSINESS ADMINISTRATION” which covers total business activities.
As a student of management, we must be encouraged by the
growth and development taken place in the corporate sector, in India. Still
recently, management is growing busy. Keeping in mind the ever development
cadre in our country. The university has arranged this project in the field of
“FINANCIAL ANALYSIS” Thus it is our moral enthusiasm and seriousness
and gives it the due importance.
We have completed project of HITACHI HOME AND LIFE
SOLUTION. This report contains the information regarding financial analysis
of the company. The data are collected from various sources like annual report,
internet, credit monitoring authority (CMA) report & expert opinion.
During my project we found that company has good reputation and
strong position in the market its Establishment.

EXECUTIVE SUMMARY
PROJECT TITLE: Financial Analysis
COMPANY NAME: HITACHI HOME AND LIFE SOLUTION
This project helped us to get the deeper understanding of the process of
Financial Statement Analysis and how decisions are taken to strengthen the
financial position.
For this study two years comparative Income Statement & Balance Sheet have
been taken for calculating ratio analysis, horizontal analysis, vertical analysis
and trend analysis. Main objective in undertaking this project is to supplement
academic knowledge with absolute practical exposure to day to day functions of
the sector.
Financial analysis which is the topic of this project refers to an assessment of
the viability, stability and profitability of a business. This important analysis is
performed usually by finance professionals in order to prepare financial or
annual reports. These financial reports are made with using the information
taken from financial statements of the company and it is based on the significant
tool of Ratio Analysis. These reports are usually presented to top management
as one of their basis in making crucial business decisions.
This experience was an emphasis on the importance of these Ratios, horizontal
analysis, vertical analysis and trend analysis which could be the roots of
decisions made by management that can make or break the company. So we
were influenced to allocate the aim of this project to study the details about
these ratios, horizontal analysis, vertical analysis and trend analysis and their
possible effects on the decisions made by not only people inside the company
but also the outsiders such as investors.

INDUSTRY OVERVIEW

HITACHI HOME & LIFE SOLUTION (INDIA)LIMITED.
Hitachi had been manufacturing fans, electric refrigerators, coolers and well
pumps since before World War II. However, the desires for household
appliances only began in the late 1950s in Japan.
Hitachi released its first television model in 1956 under an affiliate brand,
Showa Denshi (currently known as Kokusai Electric Inc). During that time,
Hitachi was not well known for its home appliances as compared to Kansai
manufacturers. To counter this, Hitachi managed to secure the right to advertise
on the Tsutenkaku Tower in return for supporting its construction costs.
Television then, was a popular topic among the consumers. Hence, Hitachi
advertised on all four sides with "Hitachi Television", "Hitachi Pumps",
"Hitachi Motors" and "Hitachi Lamps".
Hitachi's product range was extended to include light bulbs, fluorescent lamps,
vacuum cleaners, room coolers, transistor radios, tape recorders and electric
heating appliances. In 1957, Hitachi Home Electric Appliance Geppuhanbai
(currently known as Hitachi Capital Corporation) was established to promote
sales in Tokyo and Osaka. As the average annual income of a salaried
professional was low due to economic recession, Hitachi started allowing
convenient monthly installment purchasing of its products. After an economic
growth, ordinary people are able to enrich their lives with one highly sought-after
appliance after another through monthly installment payments.

HITACHI HOME & LIFE SOLUTIONS (INDIA) LTD:-
(HHLI) a subsidiary of Hitachi Appliances Inc, Japan, focuses on the
development and supply of high-quality products and technology that contribute
to the overall prosperity of the society. We manufacture diverse range of
products including Room Air-conditioners and Commercial Air-conditioners as
well as trade VRF Systems, Rooftops, Chillers, and Refrigerators.
HHLI is headquartered at Ahmedabad, Gujarat and has manufacturing facility at
KADI, GUJARAT. We have a strong nationwide distribution network and we
also feature among the top air-conditioning companies in India. HHLI has been
a pioneer in technology and innovation and is ahead of its competition in
introducing newer concepts and features in air-conditioning due to its high
spending on R&D.
Hitachi Home Electronics, subsidiary of Hitachi Ltd and Hitachi Asia, oversees
consumer and multimedia products in India and other region. Hitachi Home
Electronics formulates and implements operational strategies and engages in
product planning. It markets a wide range of Home Appliances and Audio
Visual Products for the household. For the commercial market, a wide range of
LCD projectors and Interactive Whiteboards are available to meet all business
needs.

MISSION & VISION:-
 VISION OF THE COMPANY:
 To be a premium global conglomerate with a clear focus on each business.
 To become world most big company of home appliances.
 Mission of the company:
 To deliver superior value to the customers, shareholders, employees and
society at large.
 “Our goal is to become a US $65 billion group by 2015 from US $30 billion
company today. we expect company to contribute significally to this growth
and earnings.”
 HISTORY:-
 Presented company :-
 Hitachi home & life solution limited
 Build their brand Kadi plant(MEHSANA)
 Founded in 7th December 1984
 Acquest Air Conditioning Systems Pvt. Ltd .
 A deemed public limited company on April 18, 1990.
 On September 14, 1990, the name of our Company was changed to Amtrex
Appliances Limited.
 Further to Amtrex Hitachi Appliances Limited on January 25, 1999.
 On March 12, 2003 its changed Hitachi home and life solution limited.

TOOLS OF FINANCIAL STATEMENT ANALYSIS
The Multi-Step Income Statement
The multi-step income statement involves the use of multiple sub-totals within
the income statement, which makes it easier for readers to aggregate selected
types of information within the report The usual subtotals are for the gross
margin, operating expenses, and other income, which allow readers to
determine how much the company earns just from its manufacturing activities
(the gross margin), what it spends on supporting operations (the operating
expense total) and what component of its results do not relate to its core
activities (the other income total).
Given its higher level of information content, the multi-step format is usually
preferred over the single step format (which does not incorporate sub-totals).
Multi-step income statement is one of the two most commonly used income
statement formats, the other being the single-step income statement. Multi-step
income statement involves more than one subtraction to arrive at net
income and it provides more information than a single-step income statement.
The most important of which are the gross profit and the operating profit
figures.

HORIZONTAL ANALYSIS
Methods of financial statement analysis generally involve comparing certain
information. The horizontal analysis compares specific items over a number of
accounting periods. For example, accounts payable may be compared over a
period of months within a fiscal year, or revenue may be compared over a
period of several years. These comparisons are performed in one of two
different ways.
Absolute Dollars
One method of performing a horizontal financial statement analysis compares
the absolute dollar amounts of certain items over a period of time. For example,
this method would compare the actual dollar amount of operating expenses over
a period of several accounting periods. This method is valuable when trying to
determine whether a company is conservative or excessive in spending on
certain items. This method also aids in determining the effects of outside
influences on the company, such as increasing gas prices or a reduction in the
cost of materials.
Percentage
The other method of performing horizontal financial statement analysis
compares the percentage difference in certain items over a period of time. The
dollar amount of the change is converted to a percentage change. For example, a
change in operating expenses from $1,000 in period one to $1,050 in period two
would be reported as a 5% increase. This method is particularly useful when
comparing small companies to large companies.

VERTICAL ANALYSIS
The vertical analysis compares each separate figure to one specific figure in the
financial statement. The comparison is reported as a percentage. This method
compares several items to one certain item in the same accounting period. Users
often expand upon vertical analysis by comparing the analyses of several
periods to one another. This can reveal trends that may be helpful in decision
making. An explanation of Vertical analysis of the income statement and
vertical analysis of the balance sheet follows.
Income Statement
Performing vertical analysis of the income statement involves comparing each
income statement item to sales. Each item is then reported as a percentage of
sales. For example, if sales equals $10,000 and operating expenses equals
$1,000, then operating expenses would be reported as 10% of sales.
Balance Sheet
Performing vertical analysis of the balance sheet involves comparing each
balance sheet item to total assets. Each item is then reported as a percentage of
total assets. For example, if cash equals $5,000 and total assets equals $25,000,
then cash would be reported as 20% of total assets.
TREND ANALYSIS
In management accounting, trend analysis is the part of financial statement
analysis. It means, to take one financial item and its all past years figures. By
taking first year as base year, we calculate % figure of each year. Trend
analysis is the presentation of amounts as a percentage of a base year. Now, it
becomes trend. On this trend, we analyze its spreading flow. It may
be upward or downward. With this, we can analyze our past performance and
financial position growth.

RATIO ANALYSIS
Ratio analysis:-
Ratio analysis is used to evaluate relationships among financial statement items.
The ratios are used to identify trends over time for one company or to compare
two or more companies at one point in time. Financial statement ratio analysis
focuses on three key aspects of a business: liquidity, profitability, and solvency.
Liquidity ratios:-
Liquidity ratio measure the ability of a company to repay its short-term debts and
meet unexpected cash needs.
Profitability ratios :-
Profitability ratio measure a company's operating efficiency, including its ability
to generate income and therefore, cash flow. Cash flow affects the company's
ability to obtain debt and equity financing
Solvency ratios:-
Solvency ratios are used to measure long-term risk and are of interest to long-term
creditors and stockholders.

Balance sheet and Profit & Loss a/c’s.
Balance Sheet of Hitachi home and
life solutions
------------------- in Rs. Cr. -------------------
Mar '14 Mar '13 Mar '12
12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 274.18 274.07 274.04
Equity Share Capital 274.18 274.07 274.04
Share Application Money 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00
Reserves 14,960.64 12,585.75 10,392.00
Revaluation Reserves 0.00 0.00 0.00
Net worth 15,234.82 12,859.82 10,666.04
Secured Loans 2,147.34 2,012.09 1,531.12
Unsecured Loans 2,315.34 1,796.04 1,103.94
Total Debt 4,462.68 3,808.13 2,635.06
Total Liabilities 19,697.50 16,667.95 13,301.10
Mar '13 Mar '12 Mar '11
Application Of Funds
Gross Block 21,320.16 18,962.75 17,899.85
Less: Accum. Depreciation 8,197.80 7,328.57 6,499.60
Net Block 13,122.36 11,634.18 11,400.25

Capital Work in Progress 3a,505.37 1,896.63 681.83
Investments 5,108.72 3,788.77 3,730.32
Inventories 2,350.47 2,035.94 1,956.52
Sundry Debtors 1,017.24 765.96 602.29
Cash and Bank Balance 142.66 188.19 144.79
Total Current Assets 3,510.37 2,990.09 2,703.60
Loans and Advances 2,161.94 2,633.53 1,478.53
Fixed Deposits 0.00 0.00 0.00
Total CA, Loans & Advances 5,672.31 5,623.62 4,182.13
Deferred Credit 0.00 0.00 0.00
Current Liabilities 6,642.06 5,454.51 6,119.95
Provisions 1,069.20 820.74 573.48
Total CL & Provisions 7,711.26 6,275.25 6,693.43
Net Current Assets - 2,038.95 - 651.63 -2 ,511.30
Miscellaneous Expenses 0.00 0.00 0.00
Total Assets 19,697.50 16,667.95 13,301.10
Contingent Liabilities 2,599.53 3,645.82 2,558.35
Book Value (Rs) 555.65 469.22 389.21

Profit & Loss account of Hitachi
home and life solution
------------------- in Rs. Cr. -------------------
Mar '14 Mar '13 Mar '12
Income
Sales Turnover 20,174.94 18,313.13 13,312.58
Excise Duty 0.00 0.00 0.00
Net Sales 20,174.94 18,313.13 13,312.58
Other Income 305.00 371.87 155.45
Stock Adjustments 118.19 -21.26 61.85
Total Income 20,598.13 18,663.74 13,529.88
Expenditure
Raw Materials 4,204.60 3,600.47 2,750.75
Power & Fuel Cost 4,298.94 4,303.97 3,125.17
Employee Cost 968.35 831.04 665.16
Other Manufacturing Expenses 0.00 0.00 0.00
Selling and Admin Expenses 0.00 0.00 0.00
Miscellaneous Expenses 6,145.76 5,408.97 4,167.25
Preoperative Exp Capitalized 0.00 0.00 0.00
Total Expenses 15,617.65 14,144.45 10,708.33

Mar '14 Mar '13 Mar '12
Operating Profit 4,675.48 4,147.42 2,666.10
PBDIT 4,980.48 4,519.29 2,821.55
Interest 209.71 223.86 272.52
PBDT 4,770.77 4,295.43 2,549.03
Depreciation 945.37 902.56 765.73
Other Written Off 0.00 0.00 0.00
Profit Before Tax 3,825.40 3,392.87 1,783.30
Extra-ordinary items 0.00 0.00 0.00
PBT (Post Extra-ord Items) 3,825.40 3,392.87 1,783.30
Tax 1,169.97 946.68 379.07
Reported Net Profit 2,655.43 2,446.19 1,404.23
Total Value Addition 11,413.05 10,543.98 7,957.58
Preference Dividend 0.00 0.00 0.00
Equity Dividend 246.70 218.82 164.09
Corporate Dividend Tax 42.00 36.00 27.00
Per share data (annualized)
Shares in issue (Lakhs) 2,741.80 2,740.65 2,740.42
Earnings Per Share (Rs) 96.85 89.26 51.24
Equity Dividend (%) 90.00 80.00 60.00
Book Value (Rs) 555.65 469.22 389.21

ANALYSIS, FINDINGS & INTERPRETATIONS
MULTISTEP INCOME STATEMENT
Particular 2014 2013
Gross Sales 20583.33 14858.6
Less : Excise Duty 2267.64 1652.96
Net Sales 18270.69 13205.64
A.Material Cost 3620.8 3013.54
B.Manufacturing Exp. 4489.06 3302.56
COGS (A+B) 8109.86 6316.1
GROSS PROFIT(Net sales-
Cogs) 10160.83 6889.54
Less :
Employee Remuneration 855.21 690.64
Adm. & Sell & Other Exp. 5238.82 3656.21
6094.03 4346.85
Add :
Other
Income 410.98 297.14
Profit Before Dep & Intt &
Tax 4477.78 2839.83
Less : Dep. 902.56 765.73
Profit Before Int & Tax 3575.22 2074.1
Less : Interest 223.86 287.91
Add : Extra
Ordinary Item 51.52 125.52
Profit Before Tax 3402.88 1911.71

Less : Tax 956.69 507.48
Profit After Tax 2446.19 1404.23

HORIZONTAL ANALYSIS:
MULTI STEP INCOME STATEMENT OF HITACHI HOME AND
LIFE SOLUTION
change
in
amount Change in %
Particular 2014 2013
(Mar'14-
Mar'13)
(Mar'14-
Mar'13) * 100
Mar'13
Gross Sales
20583.3
3 14858.6 5724.73 38.529
Less : Excise Duty 2267.64 1652.96 614.68 37.187
Net Sales
18270.6
9
13205.6
4 5065.05 38.356
A.Material Cost 3620.8 3013.54 607.26 20.152
B.Manufacturing Exp. 4489.06 3302.56 1186.5 35.927
COGS (A+B) 8109.86 6316.1 1793.76 28.4
GROSS PROFIT(Net
sales-Cogs)
10160.8
3 6889.54 3271.29 47.482
Less :
Employee Remuneration 855.21 690.64 164.57 23.829
Adm. & Sell & Other Exp. 5238.82 3656.21 1582.61 43.286
6094.03 4346.85 1747.18 40.195
Add :
Other
Income 410.98 297.14 113.84 38.312

EBIT 4477.78 2839.83 1637.95 57.678
Less : Dep. 902.56 765.73 136.83 17.87
Profit Before Int & Tax 3575.22 2074.1 1501.12 72.375
Less : Interest 223.86 287.91 -64.05 -22.247
Add : Extra
Ordinary Item
51.52 125.52 -74 -58.955
Profit Before Tax 3402.88 1911.71 1491.17 78.002
Less : Tax 956.69 507.48 449.21 88.518
Profit After Tax 2446.19 1404.23 1041.96 74.202
INTERPRETATION
 The net sale of the company has been increased by 38.356% which is
really a good thing. Which also let PAT increased by substantial 74.20%?
 Increase in material cost, manufacturing expense, employee remuneration
is less than the increase in net sales, which is good thing.
 Increase in administration and selling expense is more than sales which
shrinks the profit.
 Increase in profit at every stage i.e. PBDIT, PBIT, PBTEOI, PAT is more
than the increase in sales and PAT is almost double than the sales.
 There is decrease in the interest expense by 22.25%, which shows that
there is also decrease in borrowing.
 Other income of the company from other sources also increases by
38.31%
 There is significant increase in administration and selling expenses which
should be reduced or controlled by the company.

Hitachi home and life solutions
Balance
RS IN
Sheet
CRORES
change in
amount Change in %
Mar '14 Mar '13
(Mar'14-
Mar'13)
(Mar'14-Mar'13)
* 100
12 mths 12 mths
Sources Of Funds
Total Share
Capital 274.07 274.04 0.03 0.011
Equity Share
Capital 274.07 274.04 0.03 0.011
Share
Application
Money 0 0 0
Preference
Share Capital 0 0 0
Reserves 12,585.75 10,392.00 2193.75 21.11
Revaluation
Reserves 0 0 0
Net worth 12,859.82 10,666.04 2193.78 20.568
Secured
Loans 2,012.09 2,789.76 -777.67 -27.876
Unsecured
Loans 1,796.04 1,354.84 441.2 32.565
Total Debt 3,808.13 4,144.60 -336.47 -8.119
Total
Liabilities 16,667.95 14,810.64 1857.31 12.541

Mar '14 Mar '13
12 mths 12 mths
Gross Block 19,014.48 17,942.27 1072.21 5.976
Less: Accum.
Depreciation 7,379.66 6,542.02 837.64 12.804
Net Block 11,634.82 11,400.25 234.57 2.058
Capital Work
in Progress 3,163.02 1,105.32 2057.7 186.164
Investments 3,788.77 3,730.32 58.45 1.567
Inventories 2,035.94 1,956.52 79.42 4.06
Sundry
Debtors 765.96 602.29 163.67 27.175
Cash and
Bank Balance 176.48 144.47 32.01 22.157
Total Current
Assets 2,978.38 2,703.28 275.1 10.177
Loans and
Advances 1,511.73 1,216.71 295.02 24.248
Fixed
Deposits 11.71 0.32 11.39 3559.375
Total CA,
Loans &
Advances 4,501.82 3,920.31 581.51 14.834
Deferred
Credit 0 0 0
Current
Liabilities 5,599.74 4,772.07 827.67 17.345

Provisions 820.74 573.49 247.25 43.114
Total CL &
Provisions 6,420.48 5,345.56 1074.92 20.109
Net Current
Assets -1,918.66 -1,425.25 -493.41 34.62
Miscellaneous
Expenses 0 0 0
Total Assets 16,667.95 14,810.64 1857.31 12.541
Contingent
Liabilities 5,892.68 4,220.47 1672.21 39.622
Book Value
(Rs) 469.22 389.21 80.01 20.558
INTERPRETATION
 Total liabilities of the company have been reduced by 8.12%, which is
good indicator.
 There is not much change in share holder fund.
 There is significant increase in Reserve and surplus by 21.11%, which is
mostly due to increase in net profit.
 The company’s secured loans were reduced by 27.88% where as
unsecured loans were increased by 32.57%.
 There is not much increase in fixed assets but Capital work in progress
has been substantially increased by 186%.
 Gross block of Fixed assets has been increased by 5.98%, where as sales
and other income were increased by 38.36%, which indicates better
utilization of fixed assets.
 Debtors have increased by 27.18%, whereas sales and other income
increased by 38.36% which shows most of sales is done in cash.
 The company’s current asset has been increased by 34.

VERTICAL ANALYSIS
Particular 2014
Common
size 2013
common
size
(in %) (in %)
Gross Sales
20583.3
3 112.658 14858.6 112.518
Less : Excise Duty 2267.64 12.412 1652.96 12.518
Net Sales
18270.6
9 100
13205.6
4 100
0 0
A.Material Cost 3620.8 19.818 3013.54 22.821
B.Manufacturing Exp. 4489.06 24.57 3302.56 25.009
COGS (A+B) 8109.86 44.388 6316.1 47.829
0 0
GROSS PROFIT(Net sales-
Cogs)
10160.8
3 55.613 6889.54 52.172
Less : 0 0
Employee Remuneration 855.21 4.681 690.64 5.23
Adm. & Sell & Other Exp. 5238.82 28.674 3656.21 27.687
6094.03 33.355 4346.85 32.917
Add :
Other
Income 410.98 2.25 297.14 2.251
Profit Before Dep & Intt &
Tax 4477.78 24.508 2839.83 21.505
Less : Dep. 902.56 4.94 765.73 5.799
Profit Before Int & Tax 3575.22 19.569 2074.1 15.707

Less : Interest 223.86 1.226 287.91 2.181
Add : Extra
Ordinary Item 51.52 0.282 125.52 0.951
Profit Before Tax 3402.88 18.625 1911.71 14.477
Less : Tax 956.69 5.237 507.48 3.843
Profit After Tax 2446.19 13.389 1404.23 10.634
INTERPRETATION
 There is a minor change in gross profit in compare to sales. As there is
huge change in sales but GP is still as it is, which indicates also
substantial increase in expenses.
 Material cost, manufacturing expense and employee remuneration has
been decreased slightly in compare to sales. Whereas admin and selling
expenses have increased slightly.
 PAT has increased slightly in compare to sales.
 COGS has decreased slightly which led to increase in gross profit

Balance
Sheet
RS IN
CRORES
Mar '14
Common
size Mar '13
Common
size
12 mths (in %) 12 mths (in %)
Sources Of Funds
Total Share
Capital 274.07 1.644293389 274.04 1.850291412
Equity Share
Capital 274.07 1.644293389 274.04 1.850291412
Share
Application
Money 0 0
Preference
Share Capital 0 0
Reserves 12,585.75 75.50868583 10,392.00 70.16577271
Revaluation
Reserves 0 0
Net worth 12,859.82 77.15 10,666.04 72.01606413
Secured
Loans 2,012.09 12.07 2,789.76 18.83618804
Unsecured
Loans 1,796.04 10.78 1,354.84 9.147747835
Total Debt 3,808.13 22.85 4,144.60 27.98393587
Total
Liabilities 16,667.95 100.00 14,810.64 100
Mar '12 Mar '11
12 mths 12 mths

Gross Block 19,014.48 114.08 17,942.27 121.144461
Less: Accum.
Depreciation 7,379.66 44.27 6,542.02 44.17108241
Net Block 11,634.82 69.80 11,400.25 76.9733786
Capital Work
in Progress 3,163.02 18.98 1,105.32 7.463013077
Investments 3,788.77 22.73 3,730.32 25.18675763
Inventories 2,035.94 12.21 1,956.52 13.21023264
Sundry
Debtors 765.96 4.595406154 602.29 4.066603469
Cash and
Bank Balance 176.48 1.058798473 144.47 0.975447381
Total Current
Assets 2,978.38 17.87 2,703.28 18.25228349
Loans and
Advances 1,511.73 9.07 1,216.71 8.215107517
Fixed
Deposits 11.71 0.07025459 0.32 0.002160609
Total CA,
Loans &
Advances 4,501.82 27.01 3,920.31 26.46955162
Deferred
Credit 0 0
Current
Liabilities 5,599.74 33.60 4,772.07 32.22055225
Provisions 820.74 4.924060847 573.49 3.872148671
Total CL & 6,420.48 38.52 5,345.56 36.09270092

Provisions
Net Current
Assets -1,918.66 -11.51 -1,425.25 -9.6231493
Miscellaneous
Expenses 0 0 0
Total Assets 16,667.95 100.00 14,810.64 100
Contingent
Liabilities 5,892.68 4,220.47
Book Value
(Rs) 469.22 389.21
INTERPRETATION
 Total debt decreased from 27.98 to 22.85 in the year 2014 to the total net
worth.
 Net fixed assets of the company have been decreased in compare to the
net worth.
 The proportion of the secured loan has been decreased in the balance
sheet in 2014.
 Capital work in progress has been increased almost gets doubled in
compare to the net worth.
 There is a minor decrease in current asset in the year 2014 by comparing
to total assets.

RATIO
 RETURN ON INVESTMENT RATIO:
1. Return on net worth(%):
= (PAT – Preference dividend)/Eq. shareholder’s fund * 100
2014 = 2655.43/15234.82*100
=17.43%
2013 = 2446.19/12859.82*100
=19.02%
2012=1404.23/10666.04*100
=13.16%
 Eq. shareholder’s fund=Eq. share Capital + Reserves & surplus
2014 = 274.18 + 14960.64
=15234.82
2013 = 274.07 +12585.75
=12859.82
2012 = 274.04 + 10392
=10666.04
INTERPRETATION:
Return on investment ratio shows return get instead of their investment in by
company. Here company gets 17.43% return in 2014, 19.02% returns in 2013
and 13.16% in 2012. Return increase by 5.86% in 2013. Because increase PAT
by 1041.96 which is lower than share ho lder’s fund by 2593.78. Which is
helpful for the company’s growth as we as the investors also. In 2014, return
decrease by 1.59%.

2. EARNINGS PER SHARE
= PAT – Preference Dividend / Weighted Average no. of eq. shares
o/s
2014 = 2655.43- 0 / 27.40
= 96.91 Rs.
2013 = 2446.19 – 0 / 27.40
= 89.26 Rs.
2012 = 1404.23 - 0 / 27.40
= 51.24 Rs.
INTERPRETATION:
In 2014, EPS increase by 10.65 Rs. And in 2013, EPS increase by 38.02 Rs.
Main reason behind increase in EPS is increase in PAT by209.24 and 1041.96
randomly. This attracts the investors towards the company for more investment.

3. CASH EARNINGS PER SHARE
= (PAT – Preference Dividend + Non-cash Charges)/ Weighted
Average no. Of eq. shares o/s
2014 = 2655.43 – 0 + 945.37 / 27.40
= 131.42 Rs.
2013 = (2446.19 – 0 + 902.56) / 27.40
= 122.22 Rs.
2012 = (1404.23 – 0 + 756.73) / 27.40
= 79.2 Rs.
INTERPRETATION:
In 2014, EPS increase by 9.22 Rs compare of 2013 and in 2013 EPS increase
43.2 Rs. in compare of 2012 Because of CEPS is increase every year.

SOLVENCY RATIOS
4. NET ASSETS VALUE
= Shareholder’s Funds / No. of Eq. Shares o/s
2014 = 15234.82 / 27.41
= 555.81 Rs
2013 = 12859.82 / 27.40
= 469.34 Rs.
2012 = 10666.04 / 27.40
= 389.27 Rs.
INTERPRETATION:
Because of, increase in shareholders fund by 2593.78 corers RS. Assets value
also increase as compared to 2012. This shows the better position of the
company.

5. DEBT EQ. RATIO
= Long Term Debt / Total net worth
2014 = 4736. 86 / 15234.82
= 0.31 times
2013 = 4082.2 / 12859.82
= 0.31 times
2012 = 4144.60 / 10666.04
= 0.39
Long Term Debt = Eq. Share Capital + Secured Loan + Unsecured loan
2014 = 274.18 + 2147.34 + 2315.34
= 4736.86
2013 = 274.07 + 2012.09 + 1796.04
= 4082.2
2012 = 274.04 + 2789.76 + 1354.84
= 4144.60
INTERPRETATION:
Debt equity ratio shows the relationship between the debt and shareholders
fund. Here we see that in 2012 debt is higher by 0.08 times as compared to
2013. Because company decreases the net worth by 2193.78 while there are
minor changes in long term debt.

6. INTEREST COVER RATIO
(PBIT) / Int. on long term debt
2014 = 3825.40 / 209.40
= 18.27 times
2013 = 3575.22/223.86
= 15.97 times
2012 = 2074.1/287.91
= 7.20 times
INTERPRETATION-The
interest coverage ratio is very important from the lender's point of view. It
indicates the number of times interest is covered by the profits available to pay
interest charges.
It is an index of the financial strength of an enterprise. A high debt service ratio
or interest coverage ratio assures the lenders a regular and periodical interest
income. But the weakness of the ratio may create some problems to the
financial manager in raising funds from debt sources. In 2013 the ratio was
15.97 means profit can cover almost 16times interest which was low in 2012.

LIQUIDITY RATIO
7. CURRENT RATIO
= (Current Assets, loans & advances + Short term investments) /
(Current liabilities + Provisions + Short term debt)
2014 = 5672.31 / 7711.26
= 0.74 Times
2013 = 4501.82 / 6420.48
= 0.70 Times
2012 = 3920.31 / 5345.56
= 0.73 Times
INTERPRETATION:
It’s clear that in both the year company’s current assets is lower than the
current liabilities. But in 2013 its liquidity decreases by 0.03 times. Because
assets in increase as compared to 2012 but liabilities is more increases than the
assets increases by Rs 1095.14 corers.

8. QUICK RATIO
= (Current Assets, loans & advances – inventories + Short term
investments) / (Current liabilities + Provisions + Short term debt net
of working capital limits)
2014 = (4501.82 – 2035.94) / 6420.48
= 2465.88 / 6420.48
= 0.38 Times
2013 = (3920.31 – 1956.52) / 5345.56
= 1963.79 / 5345.56
= 0.36 Times
INTERPRETATION:
Quick ratio increases in 2014 by 0.02 times. Because of, the more increase in
the inventories in 2014 by 79.42 corers as compared to 2013. And also increase
in liabilities by 1074.92 corers.

9. COLLECTION PERIOD ALLOWED TO CUSTOMERS :-
= (Receivables) / Credit Sales * 365
2014 = {(765.96 + 602.29) / 2} / 18270.69 * 365
= 684.125 / 18270.69 * 365
= 13.67
= 14 Days
2013 = {(602.29 + 215.85) / 2} / 13205.64 * 365
= 409.06 / 13205.64 * 365
= 11.31 days
= 11 Days
INTERPRETATION:
Because of increase in debtors as well as credit sales collection period also
increase in 2014 by 3 days.

10. INVENTORY HOLDING PERIOD
= (Inventories / COGS) * 365
2014 = (2350.47 / 9471.89) * 365
= 90.58
= 91 days
2013 = (2035.94 / 8109.86) * 365
= 91.63
= 92 Days
2012 = (1956.52 / 6316.1) * 365
= 113.06
=113 Days
 COGS = Raw Material Consumption + Purchases + Purchase Ex. +
Ex. Related to Manufacturing
2014 = 4204.60 + 4298.94 + 968.35
= 9471.89
2013 = 3600.47 + 4303.97 + 185.09 + 20.33
= 8109.86
2012 = 3079.65 - 66.11 + 179.97 + 3122.59
= 6316.1
INTERPRETATION:
Inventory holding period is decrease by 1 days in 2014. Because in 2013
manufacturing ex. Is higher than 2013.

TURN OVER RATIOS
11. FIXED ASSETS TURNOVER RATIO (TIMES):
Net Sales
Net Block of Fixed Assets
(2014) = 23852/17912.25 =1.33
(2013) = 18270.69/11634.82 =1.57
(2012) = 13205.64/11400.25 =1.16
Comments:
A High fixed asset turnover ratio indicates the capability of the firm to earn
maximum sales with the minimum investing in fixed assets. So it shows that the
company is using its assets more efficiently. Here, in HHLS the ratio is
increased by 0.24 compared to last year because of the increase in sales.

12. NET WORTH TURNOVER RATIO (TIMES):
Net Sales
Equity shareholder’s Funds or Net Worth
Where, Net Worth = Equity share capital + Reserve & surplus –Misc.exp
not written of
(2014) = 23852/14805.33 = 1.61
(2013) = 18270.69/12859.82 = 1.42
(2012)= 13205.64/10666.04 = 1.24
INTERPRETENTION:
Financial analysts usually look upon a high net worth turnover rate as an
indication that a company is using its assets efficiently. They figure that, other
things being equal, a company with a high turnover rate is earning a greater rate
of income on its net worth than a company with a low turnover rate. Here in
HHLS there is an increase in ratio by 0.19

13. DEBTORS TURNOVER RATIO (TIMES):
Credit Sales
Receivables
(2014) (2013)
20538.33/684125 = 30.22 14858.60/409.06 = 36.22
INTERPRETATION:
Debtor’s turnover ratio or accounts receivab le turnover ratio indicates the
velocity of debt collection of a firm. In simple words it indicates the number of
times average debtors (receivable) are turned over during a year. Here the ratio
is decreased by 6.3.

14. INVENTORY TURNOVER RATIO (TIMES):
= COGS
Avg. inventory
(2014) = 8713.99/3368.44 = 2.58
(2013) = 8109.86/1996.23 = 4.06
(2012) = 6316.10/1386.11 = 4.55
INTERPRETATION:
Inventory turnover ratio measures the velocity of conversion of
stock into sales. Usually a high inventory turnover/stock velocity indicates
efficient management of inventory because more frequently the stocks are sold;
the lesser amount of money is required to finance the inventory. A low
inventory turnover ratio indicates an inefficient management of inventory. Here
the ratio is decreased by 1.48 because of the inefficient use of inventory.

PROFITABILITY RATIOS
15. GROSS PROFIT RATIO (%):
Gross Profit * 100
Net Sales
(2014) =4675.48/20174.94*100=23.17%
(2013)=4308/18270.69*100=23.58%
(2012)= 3139/13205.64*100=23.77%
INTERPRETATION:
This ratio indicates the relation between production cost and sales and the
efficiency with which goods are produced or purchased. If it has a very high
gross profit ratio it may indicate that the organization is able to produce or
purchase at a relatively lower cost. But here the ratio is decreased by 0.19%.

16.Net Profit Ratio (%)
Net profit *100
Net Sales
(2014) = 2677.73/23852*100=11.22%
(2013)= 2446.19/18270.69*100=13.39%
(2012) = 1404.23/13205.64*100=10.64%
INTERPRETATION:-
This shows the portion of sales available to owners after all expenses. A high
profit ratio is higher profitability of the firm. This ratio shows the earning left
for shareholder as percentage of Net sales.
Net Margin Ratio measures the overall efficiency of production, Administration
selling, financing, pricing and Taste Management. Here the ratio is increased by
2.76% because of the increase in sales and reduction in expenses.

17. RAW MATERIAL CONSUMED (%):
Raw material Consumed *100
Net Sales
(2014) = 3141/23852*100 = 13.31%
(2013) = 3620.8/18270.69*100=19.82%
(2012) = 3013.54/13205*100= 22.82
18. Effective Tax Rate (%):
Current Income Tax * 100
PBT
(2014) = 726.23/4848.20*100=14.97%
(2013)=956.69/3402.88*100=28%
(2012)=507.48/1911.71*100=26.55

VALUATION OR CAPITAL MARKET RATIO
19.P/E RATIO (TIMES):
Market Price of the Equity share
EPS
(2014)=1912/96.87=19.73
(2013) =1506.93/89.26=16.88
(2012)=1133.8/51.24=22.13
INTERPRETATION:
Price earnings ratio (P/E ratio) is the ratio between market price per
equity share and earnings per share.
The ratio is calculated to make an estimate of appreciation in the value
of a share of a company and is widely used by investors to decide whether or
not to buy shares in a particular company. Here the EPS is decreased by 5.25 rs
compared to last year.

21. MARKET CAPITALIZATION (RS):
=No. of Equity shares o/s * Market Price
(2014) (2013) (2012)
= 27.41 * 1912 = 27.40 *1506.95 = 27.4 * 1133.8
= 52407.92 =41290.43 = 31066.12

SUGGESTIONS
 There is substantial increase in company’s admin & selling expenses,
employee remuneration and material cost. So, company should control
these expenses to take benefit of increased sale.
 There is an increase of 21.11% in Reserve and surplus. So, company
should use this fund for some productive purpose and to give better
returns to the share holders.
 There is an increase of 186% in capital work in progress. Company
should complete them as soon as possible so that they can use them
productively.
 Company’s debtors has been increased by 27.18%, which shows that
company is making more credit sale or it has liberal collection policy. So
in case of liberal collection Policy Company should take strict steps to
increase collection.
 Company’s loans & advances which they may have given to staff or some
other persons is increased by 24.248. Means company should control this
amount.
 Company is having debt of 24.248% in its capital structure. Which
company can use to take benefit of leverage.
 Company’s current ratio is 0.7:1 which company should improve to ideal
position of 1:1.
 Company’s inventory turnover ratio is 4.06, which is lesser, which shows
company’s inefficiency to manage inventory. So, it should better manage
their investment.

Trend analysis of B/S
Particulars 2014 2013 2012
Sources of funds:
Total Share Capital 274.18 274.07 274.04
index 220.24 220.15 220.15
Equity Share Capital 274.18 274.07 274.04
index 220.24 220.15 220.15
Reserves 14,955.41 12,550.35 10,367.78
index 429.11 360.1 297.48
Net worth 15,229.59 12,824.42 10,646.60
index 421.71 355.11 294.81
Secured Loans 2,195.49 2,060.65 2,860.99
index 186.72 175.25 243.32
Unsecured Loans 4,200.92 3,485.37 2,679.89
index 434.4 360.4 277.11
Total Debt 6,396.41 5,546.02 5,540.88
index 298.49 258.81 258.57
Total Liabilities 21,704.12 18,432.70 16,253.12
index 376.74 319.95 282.12

Gross Block 23,654.64 21,014.39 19,549.90
Index 318.05 282.55 262.86
Less: Accum. Depreciation 8,604.90 7,699.83 6,774.08
Index 310.04 277.43 244.07
Net Block 15,049.74 13,314.56 12,775.82
Index 322.82 285.6 274.04
Capital Work in Progress 3,601.17 1,939.66 1,201.93
Index 530.95 285.98 177.21
Investments 4,708.54 3,547.45 3,513.86
Index 466.46 351.41 3496.72
Inventories 2,540.67 2,197.96 2,093.51
Index 360.09 311.52 296.72
Sundry Debtors 1,376.29 1,088.75 824.84
Index 728.65 576.42 4369.7
Cash and Bank Balance 184.79 212.9 156.76
Index 176.62 203.49 149.83
Total Current Assets 4,101.75 3,499.61 3,075.11
Index 410.56 350.29 307.8
Loans and Advances 2,128.62 2,600.47 1,029.79
Index 520.62 636.02 251.86
Fixed Deposits 0 0 33.34
Index 0 0 555.66
Total CA, Loans & Advances 6,230.37 6,100.08 4,138.24
Index 442.5 433.25 293.91
Net Current Assets -1,655.33 -368.97 -1,238.49
281.17 62.67 210.37

Total Assets 21,704.12 18,432.70 16,253.12
Index 376.74 319.95 282.12

CONCLUSION
After all the work we have done we found that company is having good
financ ial position and company is earning good profit. Company’s sales have
increased substantially from the last year. Company should also manage its
expenses because increase in sale is being offset by the growth in expenses.
Company is having excellent capital structure with low debt in it. Company is
managing its structure well with even low debt. There is not much change in the
company’s share holding pattern in the last few years. And frequently company
is having negative net current asset which is really a poor thing. In the last year
there is substantial decrease in company’s secured borrowing and increase in
unsecured borrowing. The company’s reserve and surplus increase substantia lly
because of increase in net profit.
Horizontal analysis helps use to know the percentage change in items over last
year.
Vertical analysis helps use to know how much other items are in proportion to
sales and total assets.
Ratio helps to know the financial position of the company.
Trend analysis helps to know the trend in the various items over the time period

Hitachi rename

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (8)

Similar to Hitachi rename

Similar to Hitachi rename (20)

Recently uploaded

Recently uploaded (20)

Hitachi rename