National Thermal Power Corporation is a government-owned power generation and distribution company founded in 1975. It has over 25,000 employees. The summary analyzes NTPC's financial statements from 2007-2010, finding that operating cash flow increased significantly while investing cash flow also increased due to investments in subsidiaries and joint ventures. Ratios such as current ratio, debtors turnover, and collection period are calculated and compared to competitors like Tata Power, Reliance Power, and Adani Power. NTPC enjoys good financial flexibility and is in an expansion stage of growth.

1. NATIONAL THERMAL POWER
CORPORATION
-FINANCIAL STATEMENTS ANALYSIS

2. COMPANY IN BRIEF
Type: Government Owned Public Enterprise
Founded: 1975
Industry : Power Generation/Distribution
Employees : 25,944 ( 2010 )
Current Share Price: Rs. 173.75 (BSE)

3. CURRENT SHARE HOLDING
PATTERN

6. Note: All the figures are in Rs. millions
March 2010 March 2009 March 2008 March 2007
Net Profit before 108076 94678 105294 88965
tax
Net cash from 105942 96881 97860 80653
Operating Activities
Net cash from -104977 -75004 -62038 -31458
Investing Activities
Net cash from -19086 -8493 -23487 -763
Financing Activities
Net (decrease)/ -18121 13384 16186 48432
Increase in Cash
Equivalents
Opening Cash 162716 149332 133146 84714
Closing Cash 144595 162716 149332 133146

7. INFERENCE ON OPERATING
ACTIVITIES
Increase is Significant
Guarantee fee Increase in
Increase in
by Loans/advances.
Inventories.

8. INFERENCE ON INVESTING
ACTIVITIES
Purchase of Significant
Investments Increase in Decrease in
Investments in
increases by Dividends Disposal of
Joint ventures/
RS. Received Fixed Assets
Subsidiaries
Millions

9. INFERENCE ON FINANCING
ACTIVITIES

10. RATIO ANALYSIS
• Current Ratio
• Debtors Turnover Ratio
• D/E (Debt/Equity) Ratio
• Collection Period (Debtors)
• Profit Margin
• Expense Ratio (Financial)

11. GROWTH OF THE COMPANY
- A Deep Insight in to Cash Flow Statement
2009-2010 2008-2009
Current Ratio 1.34 0.95
Debtors Turn around Ratio 9.06 Times 12.78 Times
Collection Period (Debtors) 40.27 Days 28.55 Days
D/E Ratio 0.59 0.59
Gross Profit Margin 23.46% 22.61%
Financial Expense Ratio 1.91 1.95

12. MAJOR COMPETITORS
TATA Power
Reliance Power
Adani Power
Power Grid Corporation
NHPC

13. C U R R E N T R AT I O
Current Assets
Current Ratio =
Current Liabilities
NTPC Adani Power Reliance Power
Current Ratio 1.34 2.063 3.017

14. D E B T O R S T U R N O V E R R AT I O
Net credit sales
Debtors turnover ratio =
Average debtors
NTPC Adani Power Reliance Power
Debtors turnover Ratio 9.06 Times 3.3933 Times 0.719 Times

15. DEBTORS COLLECTION PERIOD
Debtors collection 12 Months
=
period Debtors turnover ratio
NTPC Adani Power Reliance Power
Debtors Collection Period 40.27Days 107.56 Days 507.46 Days

16. D / E R AT I O
Total Debt
Debt-equity ratio = Shareholders’ equity
NTPC Adani Power Reliance Power
D/E Ratio 0.59 1.83 0.105

17. P R O F I T M A R G I N R AT I O
Gross Profit
Gross profit margin = Sales X 100
NTPC Adani Power Reliance Power
PROFIT MARGIN Ratio 23.10% 62.88 % 106.62%

18. E X P E N S E R AT I O
NTPC Adani Power Reliance Power
Expense (Financial) Ratio 1.91 3.89 18.35

19.  NTPC enjoys reasonably good amount of financial flexibility.
Company is in the high growing stage – Expansion Stage.
Investor’s point of view- Dividend paid every year remains almost constant
i.e. 5.5%
 Net Profit margin highest among its competitors Rs. 9102.59 Cr…….