FAM - Emami Ltd - Financial Analysis Report

Financial Performance Analysis

Emami 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 I

Contents

COMPANY PROFILE .........................................................................................................................................................2
HISTORY .......................................................................................................................................................................2
Vision ...........................................................................................................................................................................2
Mission ........................................................................................................................................................................2
Board of Directors & Management Team .......................................................................................................................3
Board of Directors .......................................................................................................................................................3
Management team......................................................................................................................................................3
Profile of the Organization ..............................................................................................................................................4
INTRODUCTION TO THE STUDY .......................................................................................................................................5
Financial statements Analysis .........................................................................................................................................5
Annual Report & Ratio Analysis Details of Emami Ltd. ...................................................................................................5
RATIO 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 ................................................................................................................................................12
COMPARATIVE STATEMENTS ........................................................................................................................................13
Comparative Figures of Emami Ltd as on 31st March 2010-2011 ............................................................................14
Comparative Analysis ................................................................................................................................................15
References.....................................................................................................................................................................16

1


COMPANY PROFILE

HISTORY
Emami, which started as a cosmetics manufacturing company in the year 1974,
advancing with increased momentum has expanded into Emami Group of Companies of
today. Even though cosmetics and toiletries continue to be the main thrust area, the other
companies in the Emami Group are performing equally brilliantly. From health care
institution 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 inner
cravings for dreams of better life, in the fields of personal and health care, both in India and
throughout the world.

Mission
To sharpen consumer insights to understand and meet their needs with value-added
differentiated products which are safe, effective & fast. To integrate our dealers, distributors,
retailers and suppliers into the Emami family, thereby strengthening their ties with the
company. To recruit, develop and motivate the best talents in the country and provide them
with an environment which is demanding and challenging. To strengthen and foster in the
employees, strong emotive feelings of oneness with the company. To uphold the principals
of corporate governance and move towards decentralization to generate long term
maximum returns for all stake owners. To contribute whole heartedly towards the
environment and society and to emerge as a model corporate citizen.

2


Board of Directors & Management Team

Board of Directors

The efficient functioning of this reputed company rests with the following personalities.

Shri R S Agarwal Chairman
Shri R S Goenka Director
Shri Sushil Kr. Goenka Managing Director
Shri A V Agarwal, Director
Shri Mohan Goenka, Director
Shri H V Agarwal, Director
Shri Viren J Shah, Director
Shri K K Khemka, Director
Shri S N Jalan, Director
Shri Vaidya S Chaturvedi Director
Shri K N Memani Director
Shri S K Todi Director

Management team

Smt. P. Sureka Brand Director
Shri Manish Goenka Brand Director
Shri Prasant Goenka Brand Director
Shri Dhiraj Agarwal Media Director
Shri Hari Gupta President – Sales
Shri Ashok Dasgupta President – Operation
Shri R.D. Daga Chief of Legal Affairs
Shri R.K. Surana Sr. V.P. – Purchase & Development
Shri N.H. Bhansali Sr. V.P. – Finance
Shri S. Rajagopalan Sr. V.P. – Production
Shri R.C. Gattani Sr. V.P. – Projects & Development
Shri D. Poddar V.P. – Co-ordination
Shri A.B. Mukherjee V.P. – Logistics
Shri A. Ghose V.P. – Ayurvedic Division
Shri A.K. Rajput V.P. –Operations
Shri S. Grover V.P. – Rural Marketing
Shri S.K. Mandal G.M. – Systems
Shri Vimal Kr. Pande G.M. – Sales
Shri P.N. Balakrishnan G.M. –Technical
Shri A.K. Joshi Company Secretary
Shri H.K.Goenka G.M. – Works
Dr. Neena Sharma G.M. – Ayurveda (R&D)
Shri Raj Kr. Gupta G.M. – Purchase
Shri T.R. Rajan G.M. – Production
Ms. Ratna Sinha Head HR

3


Profile of the Organization

Emami Limited is in the business of manufacturing personal, beauty and health care
products. The company manufactures herbal and Ayurvedic products through the use of
modern scientific laboratory practices. This blend enables the company to manufacture
products that are mild, safe and effective. The company's product basket comprises over 20
products, the major being Boroplus Antiseptic Cream, Navratna Oil, Boroplus Prickly Heat
Powder, 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 all
states in India and in countries like Nepal, Sri Lanka, the Gulf countries, Europe, Africa and
the Middle East, among others.
Emami’s products are manufactured in Kolkata, Puducherry, Guwahati and Mumbai. The
company commenced operations at its fully automated manufacturing unit in Amingaon,
Guwahati in 2003-04.
The company's dispersed manufacturing facilities are complemented with a strong product
throughput, facilitated by a robust distribution network of over 2100 direct distributors and
3.9 lakhs retail outlets. With a view to reach its products deeper into the country, direct
selling has been extended to rural villages. As a result, rural sales increased substantially in
2003-04 compared to the previous year. Emami is headquartered in Kolkata. The company's
branch offices are located across 27 cities in India.

4


INTRODUCTION TO THE STUDY

Financial statements are prepared and presented for the external users of accounting
information. As these statements are used by investors and financial analysts to examine
the firm’s performance in order to make investment decisions, they should be prepared very
carefully and contain as much investment decisions, they should be prepared very carefully
and contain as much information as possible. Preparation of the financial statement is the
responsibility of top management. The financial statements are generally prepared from the
accounting 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 the
parameters of the financial performance. The Evaluation of financial performance had been
taken up for the study with “EMAMI LIMITED” as the project.

Analysis of Financial performances are of greater assistance in locating the weak spots at the
Emami 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 Analysis

The financial statements provide some extremely useful information to the extent that the
balance sheet mirrors the financial position on a particular date in terms of the structure of
assets, liabilities and owners’ equity, and so on and the profit and loss account shows the
results of operations during a certain period of time in terms of the revenues obtained and
the cost incurred during the year. Thus, the financial statements provide a summarized view
of the financial position and operations of a firm. Therefore, a lot can be learnt about a firm
from a careful examination of its financial statements. The analysis of financial statements is
thus, an important aid to financial analysis.
The focus of financial analysis is on key figures in the financial statements and the significant
relationship that exists between them. The analysis of financial statements is a process of
evaluating the relationship between component parts of financial statements to obtain a
better understanding of the firm’s position and performance. In brief, the financial analysis is
the process of selection, relation and evaluation.

Annual Report & Financial Details of Emami Ltd.

Emami.pdf Emami Ltd - Financial
Details.xlsx

5


RATIO ANALYSIS

Ratio analysis is a widely-use tool of financial analysis. It can be used to compare the risk
and return relationships of firms of different sizes. It is defined as the systematic use of ratio
to interpret the financial statements so that the strengths and weakness of a firm as well as
its historical performance and current financial condition can be determined. The term ratio
refers to the numerical or quantitative relationship between two items and variables. These
ratios are expressed as (i) percentages, (ii) fraction and (iii) proportion of numbers.

 Current Ratio

The current ratio is the ratio of total current assets to total current liabilities. It is calculated
by dividing current assets by current liabilities:

Current Ratio = Current Assets / Current Liabilities

The current assets of a firm, as already stated, represent those assets which can be, in the
ordinary course of business, converted into cash within a short period of time, normally not
exceeding one year and include cash and bank balances, marketable securities, inventory of
raw materials, semi-finished (work-in-progress) and finished goods, debtors net of provision
for bad and doubtful debts, bills receivable and prepaid expenses. The current liabilities
defined as liabilities which are short-term maturing obligations to be met, as originally
contemplated, within a year, consist of trade creditors, bills payable, bank credit, provision
for 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 2.68

Analysis : As a conventional rule, a current ratio of 2:1 is considered satisfactory. This rule
is base on the logic that in a worse situation even if the value of current assets becomes
half, the firm will be able to meet its obligation. The current ratio represents the margin of
safety for creditors. From the above comparison the fact is depicted that the liquidity
position of the Emami limited is satisfactory because for the given two years, its current
ratio is not below the standard ratio 2:1.

 Quick Ratio

The liquidity ratio is a measure of liquidity designed to overcome this defect of the current
ratio. It is often referred to as quick ratio because it is a measurement of a firm’s ability to
convert its current assets quickly into cash in order to meet its current liabilities. Thus, it is a
measure 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


The term quick assets refers to current assets which can be converted into cash immediately
or 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 2.16

Analysis : As a quick ratio of 1:1 is considered satisfactory as a firm can easily meet all
current 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 is
satisfactory because the quick ratio is not below the standard ratio of 1:1.

 Return on Assets (ROA)

It's an indicator of how profitable a company is relative to its total assets. ROA gives an
idea as to how efficiently the assets of the company is being utilized to generate earnings. It
is calculated by dividing a company's 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 0.19

Analysis : 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 than
previous 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 their
investment.

 Return on Equity (ROE)

This is also known as return on net worth or return on shareholder's fund. The preference
shareholders get the dividend on their holdings at a fixed rate and before dividend to equity
shareholders, the real risk remains with the equity shareholders. Moreover, they are the
owners 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 equity
shareholders. This ratio is calculated by dividing the profit after taxes and preference
dividend by the equity capital.

ROE = Net Income / Equity Capital

7


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 0.26

Analysis : This indicates the company's efficiency in converting the capital investment into
profit. As we can see, the ROE of Emami Ltd was 31% in 2010-11 as compared to 26% in
2009-10. This means that the company has comparatively generated more profit out of the
investment this year.

 Profit Margin

It is a ratio of profitability calculated as income divided by revenues, or profits divided by
sales. It measures how much out of every rupee of sales a company actually keeps in
earnings. Profit margin is very useful when comparing companies in similar industries. A
higher profit margin indicates a more profitable company that has better control over its
costs 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 0.20

Analysis : Emami's profitability of 22% in 2010-11 as compared to other companies like
Gillette India (8%) is very good. As per the data above, the profit has also increased by 2%
from the previous year's profit. So, it's generating more profit from its sales this year.

 Asset Turnover Ratio

Asset turnover is the amount of sales generated for every dollar's worth of assets. It
measures a firm's efficiency at using its assets in generating sales or revenue. The higher
the number the better. It also indicates pricing strategy: companies with low profit margins
tend to have high asset turnover, while those with high profit margins have low asset
turnover.

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 1.14

Analysis : As shown above, the company is generating more sales from the total assets
employed when compared to previous year. It shows a rise in utilization of asset to generate
sales by 18%. This indicates that the company is utilizing its assets more efficiently.

8


 Debtors Turnover Ratio

An accounting measure used to quantify a firm's effectiveness in extending credit as well as
collecting debts. The debtors turnover ratio is an activity ratio, measuring how efficiently a
firm uses its assets. By maintaining debtors, firms are indirectly extending interest-free
loans to their clients. 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.

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 13.84

Analysis : 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 Ratio

It is an indication of the velocity of the movement of the stock during the year. In case of
decrease in sales, this ratio will decrease. This serves as a check on the control of stock in a
business. This ratio will reveal the excess stock and accumulation of obsolete or damaged
stock. The ratio of net sales to stock is satisfactory relationship, if the stock is more than
three-fourths of the net working capital. This ratio gives the rate at which inventories are
converted 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 4.86

Analysis : The table above shows that the inventories are converted 4 times into sales
which is a good number as compared to a few other companies in the same sector. Though
the ratio has decreased in 2010-11 as compared to 2009-10, its still a satisfactory number.

 Debt to Equity Ratio

This ratio indicates the extent to which debt is covered by shareholders’ funds. It reflects the
relative position of the equity holders and the lenders and indicates the company’s policy on
the mix of capital funds. It indicates to what extent the firm depends upon outsiders for its
existence. For the creditors, this provides a margin of safety. For the owners, it is useful to
measure the extent to which they can gain the benefits of maintaining control over the firm
with a limited investment:” The debt-equity ratio states unambiguously the amount of assets

9


provided by the outsiders for every one rupee of assets provided by the shareholders of the
company.

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 0.40

Analysis : The lower the ratio, the better is the company's status to pay off its debts. The
above table indicates that the Total Debt of the company has decreased from 2009-10 to
2010-11 and the Equity Capital has increased. So, the Debt to Equity Ratio has also
decreased when compared to the previous year's data. Hence, we can conclude that the
company's status to pay off its debt is very good.

 Interest Coverage Ratio

The times interest earned shows how many times the business can pay its interest bills from
profit earned. Present and prospective loan creditors such as bondholders, are vitally
interested to know how adequate the interest payments on their loans are covered by the
earnings available for such payments. Owners, managers and directors are also interested in
the ability of the business to service the fixed interest charges on outstanding debt. It is
always desirable to have profit more than the interest payable. In case profit is either equal
or lesser than the interest, the position will be unsafe. It will show that there this nothing
left for the shareholders and the position of the lendors is also unsafe. A high ratio is a sign
of low burden of debt servicing and lower utilization of borrowing capacity. From the points
of view of creditors, the larger the coverage, the greater the ability of the firm to handle
fixed charges liabilities and the more assessed the payment of interest to the creditors. In
contrast the low ratio signifies the danger the signal that the firm is highly dependent on
borrowings 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 10.58

Analysis : The Interest coverage ratio is increasing from the previous year. A high ratio is a
sign of low burden of debt servicing. So, the company is more secure in term of paying of its
debt interests. Therefore this ratio is satisfactory to the company.

 Earnings per Share (EPS)

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. Earnings per

10


share is generally considered to be the single most important variable in determining a
share's price. It is also a major component used to calculate the price-to-earnings valuation
ratio.

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 10.93

Analysis : The increase in EPS indicates that there is more profit attached to each
outstanding 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 company's current share price compared to its per-share earnings.
A high P/E suggests that investors are expecting higher earnings growth in the future
compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole
story by itself. It's usually more useful to compare the P/E ratios of one company to other
companies in the same industry, to the market in general or against the company's own
historical P/E. It would not be useful for investors using the P/E ratio as a basis for their
investment to compare the P/E of a technology company (high P/E) to a utility company (low
P/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 28.59

Analysis : From the above table we see that the Market Price of Emami share has increased
by approximately 27% where as the EPS has increased by almost 50%. This caused the
decrease in the PE ration of the company from 2009-10 to 2010-11.

 Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends. The payout ratio provides an
idea of how well earnings support the dividend payments. More mature companies tend
to 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


Analysis : This indicates the percentage of Profit that was distributed as dividend to the
share holders. As per the data we can see that the profit increased by 37.5% when
compared 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 distributing
it to the shareholders.

 Equity Multiplier

It measures the financial leverage of a company. In other words, this ratio shows a
company's total assets per rupee of stockholders' equity. A higher equity multiplier indicates
higher financial leverage, which means the company is relying more on debt to finance its
assets.

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 1.37

Analysis : 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 leverage
which save a lot of tax to the company. Though we see from the ratio that it has decreased
from the previous year, which means it has paid off some of its debts.

12


COMPARATIVE STATEMENTS

Comparative study of financial statement is the comparison of the financial statement of the
business with the previous year’s financial statements and with the performance of other
competitive enterprises, so that weaknesses may be identified and remedial measures
applied. It can be prepared for both types of financial statements i.e., Balance sheet as well
as profit and loss account. The comparative profits and loss account will present a review of
operating activities of the business. The comparative balance shows the effect of operations
on the assets and liabilities that change in the financial position during the period under
consideration.

Comparative analysis is the study of trend of the same items and computed items into or
more financial statements of the same business enterprise on different dates. The
presentation of comparative financial statements, in annual and other reports, enhances the
usefulness of such reports and brings out more clearly the nature and trends of current
changes affecting the enterprise.

While the single balance sheet represents balances of accounts drawn at the end of an
accounting period, the comparative balance sheet represent not nearly the balance of
accounts drawn on two different dates, but also the extent of their increase or decrease
between these two dates. The single balance sheet focuses on the financial status of the
concern as on a particular date, the comparative balance sheet focuses on the changes that
have taken place in one accounting period. The changes are the direct outcome of
operational activities, conversion of assets, liability and capital form into others as well as
various interactions among assets, liability and capital.

13


Comparative Figures of Emami Ltd as on 31st March 2010-2011

The below vital figures has been extracted from the Balance Sheet and Profit & Loss A/C of
Emami Ltd.

Mar, 2011 Mar, 2010 Change Percentage
Particulars
Rupees in Lacs in Value Change
Total 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


Comparative Analysis

The comparative analysis of the vital numbers from the Balance Sheet and Profit & Loss A/C
of 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 company's 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


References

 www.investopedia.com
 www.emamigroup.com
 www.wikipedia.com
 A STUDY ON FINANCIAL PERFORMANCE USING RATIO ANALYSIS, A.GAYATHRIDEVI

16

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