This document analyzes the financial performance of LG Balakrishnan & Brothers over a 10-year period from 2002-2003 to 2011-2012. It provides details on sales, variable costs, contribution, fixed costs, profit before tax, and profit after tax. Key findings include a decline in sales and profits during the recession period from 2006-2007 to 2008-2009, with profits turning negative. The document also calculates metrics like P/V ratio, BEP, and margin of safety to evaluate the company's performance over time. Correlation analysis found a strong negative relationship between sales and profit.

1. 10 YEAR COMPARATIVE
ANALYSIS
Presented to: Presented by:
PROF. Manju Lamba Karmveer singh
PGDM ”A”

2. MANAGEMENT
• Management
• Mr. B. Vijayakumar-Chairman Cum Managing Director
• Mr. P.Prabakaran-Deputy Managing Director
• Board of Directors:
• 1. Mr. B. Vijayakumar
• 2. Mr. P.Prabakaran
• 3. Mr. P.Balasubramanian
• 4. Mr. S.Sivakumar
• 5. Mr. V.Govindarajulu
• 6. Mr. P.Shanmugasundaram
• 7. Smt. Rajsri Vijayakumar
• 8 . Mr. R.Vidhya Shankar
• 9. Dr.T.Balaji Naidu
• 10. Mr.v.Rajvirdhan
• General Manager and Company Secretary
• Mr. M.Lakshmi Kanth Joshi
• Key ExecutivesMr. P. Prabakaran Deputy Managing
• Mr. N. Rengaraj Chief Financial Officer

3. Company Overview:-
• The automobile industry largely comprises two wheeler, three wheeler and four
wheeler vehicles. Four wheelers may be further segmented into passenger cars,
utility vehicles (UV), commercial vehicles (CV) and tractors.
• The manufacturers of these vehicles are often referred to Original Equipment
(Vehicle) Manufacturers (OEM). The OEMs are responsible for providing the final
shape to vehicles and making it viable for use. Initially, the OEMs manufactured
vehicles from scratch i.e. including the components that are assembled to form a
vehicle.
• Over the years, the same model proved uneconomical for OEMs and hence the
manufacturing of auto components was outsourced by them to companies that
focused purely on manufacturing of automotive components.
• Since then, the performance of auto components industry has been directly
related to the OEMs preferences and sourcing patterns. Today, the auto
components industry is segmented into Drive Transmission and steering parts,
Engine parts, Suspension and braking parts, Equipment, Electrical Parts, Chassis
and other interior / exterior components.

4. OBJECTIVES
• The following are the objectives-
• To study the financial position of the company
• To apply marginal costing concept on companies
financial data.
• To analyze the company’s financial position
before recession and after recession
• To find out the magnitude of relationship
between sales and profit, variable cost and profit,
and, total cost and profit.

5. Research Methodology
• Since source of primary data directly relevant was scare. It was decided
that the analysis had to be secondary data analysis, collected directly
from the Internet, News Paper, & Magazine. This is an exploratory
research.
• SAMPLE COMPANY: LG Balakrishnan & Brothers
• SAMPLE SIZE: 10 years cost sheet statement of the company.
• DATA COLLECTION: Data is collected from secondary sources like
capitaline database, Internet, Newspaper, & Magazine.
• SOFTWARE USED: Microsoft Excel, MS word.
• ANALYSIS: The analysis is been done through table and Line Chart.

6. LG
balakris
hnan before recession recession period after recession
Figures
in Crs
S.R.NO
Particula
r 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Yr-2 Yr-3 Yr-4 Yr-5 Yr-6 Yr-7 Yr-8 Yr-9 Yr-10 yr-11
2
Gross
Revenue 232.89 276.93 382.25 427.09 513.82 560.43 547.29 556.1 732.59 941.07
Revenue
Growth
% 0.00 0.19 0.38 0.12 0.20 0.09 -0.02 0.02 0.32 0.28
3
NET
SALES
(A) 229.75 270.6 368.92 416.13 475.58 549.87 507.6 552.38 709.52 905.13
Total 229.75 270.6 368.92 416.13 475.58 549.87 507.6 552.38 709.52 905.13

7. 4
VARIABLE
COST (B)
Raw
Materials 109.96 131.72 194.45 207.95 250.37 279.89 255.6 271.77 374.94 498.65
Power &
Fuel cost 9.14 9.98 14.45 17.08 20.18 23.52 17.1 16.3 24.71 31.99
Employe
Cost 21.73 22.07 24.33 28.96 37.99 44.98 44.62 44.18 64.1 84.41
Other
Manufactu
ring
Expenses 35 43.88 62.5 76.17 79.66 87.25 92.29 96.12 122.9 153.91
Selling &
Administra
tion
Expenses 20.84 25.22 27.06 30.39 37.42 45.78 44.22 42.63 52.62 62.13
Miscellane
ous
Expenses 4.53 3.06 4.13 5.71 9.69 3.93 3.07 6.05 5.37 6.05
Interest 7.34 8.46 15.03 19.54 22.19 28.08 24.69 20.59 15.2 17.44
Total 208.54 244.39 341.95 385.8 457.5 513.43 481.59 497.64 659.84 854.58
5
CONTRIBU
TION © 21.21 26.21 26.97 30.33 18.08 36.44 26.01 54.74 49.68 50.55
6 FIXED COST (D)
Depreciatio
n 10.59 12.51 16.23 19.15 25.16 28.95 20.69 21.72 25.45 28.32
Total 19.14 23.55 32.83 40.73 46.27 56.11 58.86 69.47 64.23 75.72

8. 7
PROFIT
BEFORE TAX
(E) 2.07 2.66 -5.86 -10.4 -28.19 -19.67 -32.85 -14.73 -14.55 -25.17
PBT Margin
% 0.00 0.29 -3.20 0.77 1.71 -0.30 0.67 -0.55 -0.01 0.73
8 TAXES (F1)
Tax 4.3 6.5 0 0 0 0 0 0 0 0
Fringe
Benefit tax 0 0 0 0.44 0.48 0.49 0.4 0 0 0
Deferred Tax -0.09 -0.08 2.68 5.71 0.97 -1.75 -1.63 10.53 -7.93 -0.95
Total 4.21 6.42 2.68 6.15 1.45 -1.26 -1.23 10.53 -7.93 -0.95
(F2)
Dividend 2.16 2.36 6.8 2.36 4.21 2.75 4.71 5.1 7.85 8.63
Preference
Dividend 0 0 0 0 0 0 0 0 0 0
Extraordinar
y Items 0.37 0.16 1.58 0.61 1.7 -0.5 25.82 0.75 0.03 0.05
Equity
Dividend 55 30 80 30 50 35 60 65 100 110
Total 57.53 32.52 88.38 32.97 55.91 37.25 90.53 70.85 107.88 118.68
Total (F) 61.74 38.94 91.06 39.12 57.36 35.99 89.3 81.38 99.95 117.73

9. 9
PROFIT
AFTER TAX
(G) -59.67 -36.28 -96.92 -49.52 -85.55 -55.66 -122.15 -96.11 -114.5 -142.9
PAT Margin
% 0 -0.3919893 1.6714443 -0.4890631 0.7275848 -0.3493863 1.1945742 -0.2131805 0.1913433 0.2480349
10 P/V Ratio 9.23% 9.69% 7.31% 7.29% 3.80% 6.63% 5.12% 9.91% 7.00% 5.58%
11
Contribution Per Unit
(H)
12
BEP
(Amount) 207.33 243.14 449.08 558.82 1217.10 846.69 1148.69 701.02 917.32 1355.81
BEP Ratio
to Sales % 90.24% 89.85% 121.73% 134.29% 255.92% 153.98% 226.30% 126.91% 129.29% 149.79%
BEP (Quantity)
13
MARGIN
OF SAFETY 22.42 27.46 -80.16 -142.69 -741.52 -296.82 -641.09 -148.64 -207.80 -450.68
Margin of
safety ratio
to sales % 9.76% 10.15% -21.73% -34.29% -155.92% -53.98% -126.30% -26.91% -29.29% -49.79%

10. 0
100
200
300
400
500
600
700
800
900
1000
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
SALES
SALES

11. -0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
REVENUE GROWTH %
REVENUE GROWTH %

12. CONTRIBUTION
0
10
20
30
40
50
60
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Series1

13. PV Ratio
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.1
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Series1

14. PBT
-35
-30
-25
-20
-15
-10
-5
0
5
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Series1

15. PBT margin %
-3.5
-3
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Series1

16. BEP
0
200
400
600
800
1000
1200
1400
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Series1

17. period 1
2002-03 2003-04 2004-05 2005-06 2006-07
Total Sales 229.75 270.6 368.92 416.13 475.58
Total variable cost 208.54 244.39 341.95 385.8 457.5
Contribution 21.21 26.21 26.97 30.33 18.08
Total fixed cost 19.14 23.55 32.83 40.73 46.27
Profit Before Tax 2.07 2.66 -5.86 -10.4 -28.19
Profit After Tax -59.67 -36.28 -96.92 -49.52 -85.55
P/V Ratio 0.092318 0.096859 0.073105 0.072886 0.038017
BEP (Amount) 207.3274 243.1374 449.0784 558.8188 1217.095
Margin of Safety 22.42256 27.46265 -80.1584 -142.689 -741.515

18. Mean Median
352.196 368.92
327.636 341.95
24.56 26.21
32.504 32.83
-7.944 -5.86
-65.588 -59.67
0.074637 0.073105
535.0915 449.0784
-182.895 -80.1584

19. Period 2
2007-08 2008-09 2009-2010 2010-11 2011-12
549.87 549.87 549.87 549.87 549.87
513.43 481.59 497.64 659.84 854.58
36.44 26.01 54.74 49.68 50.55
56.11 58.86 69.47 64.23 75.72
-19.67 -32.85 -14.73 -14.55 -25.17
-55.66 -122.15 -96.11 -114.5 -142.9
0.06627 0.051241 0.099098 0.070019 0.055848
846.6851 846.6851 846.6851 846.6851 846.6851
-296.815 -296.815 -296.815 -296.815 -296.815

20. Mean Median
549.87 549.87
601.416 513.43
43.484 49.68
64.878 64.23
-21.394 -19.67
-106.264 -114.5
0.068495 0.06627
846.6851 846.6851
-296.815 -296.815

21. CORRELATION
YEAR SALES PROFIT
2002-03 229.75 -59.67
2003-04 270.6 -36.28
2004-05 368.92 -96.92
2005-06 416.13 -49.52
2006-07 475.58 -85.55
2007-08 549.87 -55.66
2008-09 507.6 -122.15
2009-10 552.38 -96.11
2010-11 709.52 -114.5
2011-12 905.13 -142.9
-0.76648

22. CORRELATION
YEAR PV ratio PROFIT AFTER TAX
2002-03 0.092318 -59.67
2003-04 0.096859 -36.28
2004-05 0.073105 -96.92
2005-06 0.072886 -49.52
2006-07 0.038017 -85.55
2007-08 0.06627 -55.66
2008-09 0.051241 -122.15
2009-10 0.099098 -96.11
2010-11 0.070019 -114.5
2011-12 0.055848 -142.9
0.48223

23. SALES PROFIT
229.75 2.07
270.6 2.66
368.92 -5.86
416.13 -10.4
475.58 -28.19
549.87 -19.67
507.6 -32.85
552.38 -14.73
709.52 -14.55
905.13 -25.17
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.651432366
R Square 0.424364128
Adjusted R Square 0.352409644
Standard Error 9.76411723
Observations 10
ANOVA
df SS MS F Significance F
Regression 1 562.2724077 562.2724 5.897675 0.041297946
Residual 8 762.7038823 95.33799
Total 9 1324.97629
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 4.931538092 8.641464765 0.570683 0.583884 -14.99571537 24.85879156 -14.99571537 24.85879156
X Variable 1 -0.03931525 0.016189022 -2.42851 0.041298 -0.076647199 -0.001983296 -0.076647199 -0.001983296

24. PROFIT PV ratio
2.07 0.092317737
2.66 0.096858832
-5.86 0.07310528
-10.4 0.072885877
-28.19 0.038016737
-19.67 0.066270209
-32.85 0.051241135
-14.73 0.099098447
-14.55 0.070019168
-25.17 0.055848331
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.826696881
R Square 0.683427733
Adjusted R Square 0.6438562
Standard Error 0.012015927
Observations 10
ANOVA
df SS MS F Significance F
Regression 1 0.002493585 0.002494 17.27069 0.003183506
Residual 8 0.00115506 0.000144
Total 9 0.003648645
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 0.09168991 0.006155188 14.89636 4.07E-07 0.077496021 0.105883799 0.077496021 0.105883799
X Variable 1 0.001371855 0.000330106 4.155802 0.003184 0.000610629 0.00213308 0.000610629 0.00213308

25. CONCLUSION
Finally after the study we have found that during
2001 to 2010 there are some fluctuations present
in the net sales, variable cost, profit, and so on due
to some economic, social, legal and environmental
factors. Overall we can say that profit has changed
during the period due to sales , change in variable
cost. It shows that profit of company based on the
sales etc.