1. To examine and analyze the Financial Statements of Delhi Transco Ltd. 2. To investigate the profitability of the company with the help of different Ratios. 3. To examine the financial position of the company with the help of solvency ratios. Financial Management is the specific area of finance dealing with the financial decision corporations make, and the tools and analysis used to make the decisions. The discipline as a whole may be divided between long-term and short-term decisions and techniques. Both share the same goal of enhancing firm value by ensuring that return on capital exceeds the cost of capital, without taking excessive financial risks.

1. FINANCIAL STATEMENT ANALYSIS
OF DELHI TRANSCO LIMITED
BY RAJNI SINGH
02111403918
MBA, 3rd Semester

2. COMPANY PFOFILE
• Delhi Transco Limited, a successor company of erstwhile Delhi
Vidyut Board, came into existence on 1st July 2002, as a State
Transmission Utility of the National Capital.
• DTL has also been assigned the responsibility of running the State
Load Dispatch Centre (SLDC) which is an apex body to ensure
integrated operations of power system in Delhi.
• To enhance its efficiency and productivity, Delhi Transco Limited is
using state of the art technologies in its operations.
• With the efficient and reliable network, DTL has been endeavoring to
ensure uninterrupted Power Supply. The availability of its transmission
system is round 98% and the transmission losses are round one percent
which brings it among the few best run state Transmission Utilities in
India.
• The existing network of DTL consists of a 400 KV ring around the periphery
of Delhi interlinked with the 220 KV network spread all over the city.

3. Delhi Transco Limited is committed to
• Establish and maintain an efficient, effective and reliable EHV Grid network for
Transmission of power in Delhi to the satisfaction of licensees and stake
holders.
• Continual improvement in capacity, performance and availability of the system.
• Employing advance technology and management practices in a cost effective
manner with due social concern.
• Ensuring quality standards of the work and in conformity to the applicable
Statutory and Regulatory requirements.

4. INTRODUCTION
• Financial Management is the specific area of finance dealing with
the financial decision corporations make, and the tools and analysis
used to make the decisions.
• The process of critical evaluation of the financial information
contained in the financial statements in order to understand and
make decisions regarding the operations of the firm is called
‘Financial Statement Analysis’.
Purpose of Analysis of financial statements :-
• To know the earning capacity or profitability.
• To know the solvency.
• To know the financial strengths.
• To know the capability of payment of interest & dividends.
• To make comparative study with other firms.
• To know the trend of business.
• To know the efficiency of mgt.
• To provide useful information to mgt.

5. DONE WITH THE HELP OF - Ratio Analysis:
• It describes the significant relationship which exists between
various items of a balance sheet and a statement of profit and
loss of a firm.
• As a technique of financial analysis, accounting ratios measure
the comparative significance of the individual items of the
income and position statements. It is possible to assess the
profitability, solvency and efficiency of an enterprise through
the technique of ratio analysis.
• The term “Ratio” refers to the numerical and quantitative
relationship between two items or variables. This relationship
can be exposed as
Percentages
Fractions
Proportion of numbers

6. OBJECTIVES
• To examine and analyse the Financial Statements of
Delhi Transco Ltd .
• To investigate the profitability of company with the
help of different Ratios.
• To examine financial position of company with the
help of solvency ratios.

7. RESEARCH METHODOLOGY
• Descriptive Research:
Descriptive research helped me to find out facts and details of the
Delhi Transco ltd. I have been enquired directly to senior executives
and senior employees about the financial flashback.
• Historical Research:
Through historical research I have been found past details which is
affecting current situation of company.
• Quantitative Research:
This research has undertaken to measure the quantity or amount of
the company. I glanced at company’s balance sheet then I came to
know since three years the profit and losses are fluctuating in
different years. As it is a government company the political or
governmental decision might have affecting its performances.
Company’s expenses and current liabilities are more than profit and
current assets respectively.

8. RESEARCH DESIGN
The study makes use of techniques like
• Balance Sheet & Income Statements.
• Various Ratio analysis.
• It has been conducted by using secondary
data(the annual reports of the company ,
balance sheets, and profit and loss account,
websites, records such as files, reports
maintained by the company ,Articles ,
research papers)

9. GRAPHICAL REPRESENTATION AND
INTERPRETATION OF RATIOS
• 1. LIQUIDITY RATIO
• 2. PROFITABILITY RATIO
• 3. SOLVANCY RATIO

10. 1. CURRENT RATIO
INTERPRETATION:-
From the graph it can
observed that the current
ratio during year 2016-17
ratio was increased to 1.85
also during the year 2017-
2018 ratio was increased to
2.10 but during year 2018-
2019 ratio was decreases to
1.59 . A current ratio of 2:1 is
considered an ideal.
Therefore it can be inferred
from the analysis done above
that except for the year 2017-
2018 the company did not
attain a satisfactory current
ratio.
YEAR CURRENT
ASSET
CURRENT
LIABILITY
CURRENT
RATIO
2017 199751.34 107966.54 1.85
2018 231197.07 109858.59 2.10
2019 216842.71 135654.03 1.60

11. 2. QUICK RATIO
Year 2016-17 2017-18 2018-19
QUICK ASSETS 54270.6 230741.75 215345.57
TOTAL CURRENT LIABILITY 107966.45 109858.59 135654.03
RATIO 0.502661706 2.100352371 1.587461648
INTERPRETATION:-
A quick ratio of 1:1 is considered
favorable because for every rupee
of current liability, there is atleast
one rupee of liquid assets. A
higher value of ratio is considered
favorable. Here this ratio is
greater than 1 in 2017-2018,
2018-2019 but in 2016-2017 it is
less than 1 which is not
satisfactory. This means the
company has managed its funds
properly in recent period.
Therefore company is rationally
utilizing its funds to maintain an
ideal liquid ratio further.

12. 3. ABSOLUTE LIQUID RATIO
Year 2016-17 2017-18 2018-19
ABSOLUTE LIQUID ASSETS 30171.43 24247.37 28784.74
CURRENT LIABILITY 107966.95 109858.6 135650.4
RATIO 0.2794506 0.220714 0.212198
INTERPRETATION:-
The ratio is not satisfactory because it’s is
much lower than the optimum value
which is 50%. The company's day-to-day
cash management is poor.

13. 4. RETURN ON INVESTMENT
RATIO
Year 2016-17 2017-18 2018-19
NET PROFIT 39800.22 62718.2 39800.22
SHAREHOLDER FUND
INVEST
549097.8 284277.7 324158.1
RATIO 0.072483 0.220623 0.12278
INTERPRETATION:-
The return on investment ratio is quiet
low in 2016-17 and so increase in next
year and then again decreases in 2018-
19. The business owner can look at the
company's ROI across time and also at
industry data to see where the
company's return on investment ratio
lies. Also, it's important to note that
the basic ROI calculation does not take
time into consideration. Obviously,
it's more desirable to get a +15%
return over one year than it is over
two years

14. 5. PERCENTAGE RATE ON
EQUITY RATIO
Year 2016-17 2017-18 2018-19
Earning before tax 55892.93 83907.72 60091.44
Total Equity 324071.2 284277.7 324158.1
RATIO 0.172471 0.295161 0.185377
percentage 17.24 29.51 18.53
INTERPRETATION:-
A normal ROE in the utility sector
could be 10% or less. A technology or
retail firm with smaller balance sheet
accounts relative to net income may
have normal ROE levels of 18% or
more.
This company (DTL) is performing well
over the years having above 10% of
Return on equity

15. 6. EQUITY MULTIPLIER
Year 2016-17 2017-18 2018-19
total asset 552918.1 606826.9 613225.5
total equity 266892.5 284277.7 324158.1
Ratio 2.071689 2.134627 1.891748
INTERPRETATION:-
The Company has a higher equity
multiplier in year 2017-18, indicating
that it is using more debt to finance its
asset purchases. A lower equity
multiplier in 2018-19 is preferred
because it indicates that the company
is taking on less debt to buy assets so,
it carries less risk.

16. 7. EARNING PER SHARE
Year 2016-17 2017-18 2018-19
Net PAT & preference
dividend
1371.05 1371.05 3980.022
NO of Equity Share 395100 395100 395100
AMOUNT IN RS 1.51 1.51 1.01
INTERPRETATION:-
The earning per share ratio is high in
2017-18 and so decline in the year
2018-19. As the ratio highlights the
capacity of the concern to pay
dividend to its shareholder ,so the
shareholder’s interest may decline due
to some mishappening.

17. 8. DEBT EQUITY RATIO
Year 2016-17 2017-18 2018-19
NET DEBT 21,147.36 1,52,406.25 67,511.04
Total EQUITY 1,94,506.25 2,84,277.74 3,24,158.06
Ratio 0.108703 0.536117 0.208266INTERPRETATION:-
This ratio indicates the proportion of
owner's stake in the business. This
ratio also tell the extent to which the
firm depends upon outsiders for its
existence. Higher leverage ratios tend
to indicate a company or stock with
higher risk to shareholders. The ratio is
high in 2017-18 which shows risky
investment during that period to
shareholders.
During year 2016-17 and 2018-19 the
ratio is less than one which shows that
it was less risky to the shareholders to
invest at that time period

18. 9. PROPRIETARY RATIO
year 2016-2017 2017-2018 2018-2019
share capital 395100 395100 395100
total assets 552918.81 606826.88 613225.46
ratio 0.71457146 0.65109179 0.6442981
INTERPRETATION:-
The ratio is quiet lower in all the three
years that is 0.7, 0.6, 0.6. The ratio
below 0.5 is risky which shows greater
risk to creditor and is an alarming
situation. A higher proprietary ratio
indicates relatively little secure
position in the event of solvency of a
concern. So, the ratios are satisfactory
in all the three years.

19. OVERALL FINDINGS

20. RATIOS ANALYSIS

21. FINDINGS
LIQUIDITY RATIO:-
• The current ratio of the company during the year 2017,
2018 and 2019 is 1.85, 2.10 ,
1.60 which is close to ideal. Therefore it is concluded that the
liquidity position of the company is quite satisfactory.
• Quick ratio for the year 2017, 2018 and 2019 came out to be 0.5, 2.1, 1.58
which is close to 1 which shows that investors a better picture of a
company’s ability to meet current obligations the current
ratio, investors should be aware that the quick ratio does not apply to the
handful of companies where inventory is almost
immediately convertible into cash.
• The Absolute ratio is not satisfactory because it is quite lower than the
optimum value which is 50%. So it decreases over a period of time
because the company might have preferred liquidity over profitability of
the firm

22. EARNING PER SHARE
• The earnings per share for the period under study also shows a promising incr
ease. It
suggests that company has better profitability position and in future. Ratios
came out to be:- 2016-17 is 1.51
2017-18 is 1.51
2018-19 is 1.01
Percentage rate of return on equity
• This ratio is good in the year 2017-18 which is greater than 10% .The
percentage is also well in the year 2016-17 and 2018-19 is 17.24% and 18.53%.
Hence return on equity is performing good allover.
Equity Multiplier
• The ratio is low in 2018-19 (1.89) is preferred because it indicates that the
company is taking on less debt to buy assets so, it carries less risk.
• In 2016-17 ratio is 2.07 and in 2017-18 ratios is 2.13 which is greater than two
and is not satisfactory.

23. Earning per share ratio
• The earning per share ratio is high in 2017-18 that is 1.51 and so
decline in the year 2018-19 to 1.01. As the ratio highlights the
capacity of the concern to pay dividend to its shareholder , the
shareholder’s interest may decline due to this decline .
Debt Equity Ratio
• The debt equity ratio of 2016-17 is 0.108 and 2017-18 is 0.53 ,2018-
19 is 0.20. The ratio is high in year 2017-18 which indicates that a
company may not be able to generate enough cash to satisfy its
debt obligation.
Proprietary Ratio
• The proprietary ratio came out to be 0.71, 0.65, 0.64 in the last
three years, which is all satisfactory. The company has 0.71 units of
shareholder’s funds for each unit of total assets or 71% of total
assets of the company are financed by proprietor’s funds .

24. SUGGESTION
• The company’s overall position is good . Particularly the current year’s
position is well due to raise in the profit level from the last year position. It
is better for the organization to diversify the funds to different sectors in
the present market scenario.
• The current ratio of the company is below the standard ratio in all the
three years under study , Hence it should be improved at least to the
standard.
The company should manage its capital by-
1. Safeguard its ability to continue as a going concern and
2. Maintain an appropriate capital structure of debt and equity.
• The company profitability is increases if the investment approach is
followed.
• The working capital is also performing well but the company’s liability is
more this shows that liquidity is high.
• The company is utilising the fixed assets, which majorly help to the growth
of the organisation. The company should maintain that perfectly.