CASH FLOW ANALYSIS AND FINANCE

1. AGRO-PROJECT CASH FLOW ANALYSIS AND
FINANCE (AG60121 )
Assignment Submitted
To
Prof. P. K. Singh
IIT Kharagpur-721302
Tractors India Limited
Technology. Innovation. Leadership.
By (Group-VIII)
•Sharath - Introduction about the company, Kind of Business, Product Portfolio, Investments etc.
•Cinu Varghese - Balance Sheet Analysis
•Omkiran - Profit/Loss Analysis
•Ravindar - Cash Flow Analysis
•Rana Singh and Deepika - Capital Structure and Capital Budgeting
•Dipti Paridhi kindo - Working Capital Analysis
•Niladri S. Bagchi and Rana Singh - Ratio Analysis
•Raj Kumar - Leverage and Risk Analysis for this Company
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2. CONTENTS
1) INTRODUCTION
2) PRODUCT PORTFOLIO
3) BALANCE SHEET ANALYSIS
4) PROFIT AND LOSS STATEMENT
5) CASH FLOW STATEMENT
6) CAPITAL STRUCTURE AND CAPITAL BUDGETING
7) WORKING CAPITAL ANALYSIS
8) RATIO ANALYSIS
9) RISK ANALYSIS
10) SWOT ANALYSIS
11) CONCLUSION
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3. INTRODUCTION
TIL Limited, the leading manufacturer of
material handling equipment in India since 1944,
provides a wide range of Mobile Cranes – the
latest in Hydraulic Truck Cranes, Rough Terrain
Cranes, Industrial Cranes, Crawler Cranes, RTG
Cranes, etc. Partnering India’s Infrastructure
growth since 1944, TIL Limited offers world-
class equipment in India, in alliance with global
technology leaders.
TIL has two factories in Eastern India, located
at Kamarhatty (Kolkata) and Changual
(Kharagpur) in West Bengal – representing
cutting-edge technology in material handling and
road building solutions.
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TIL LIMITED SHAREHOLDER FUND

4. PRODUCT PORTFOLIO
Their portfolio of cranes includes–
A range of Truck Cranes,
 Rough Terrain Cranes,
higher capacity cranes – All Terrain Cranes, from 100tonnes to 450 tonnes – which they
import directly from their overseas technology partner / collaborator, Manitowoc of U.S.A.,
for customers in India.
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5. BALANCE SHEET ANALYSIS
YEAR 16-Mar 17-Mar YEAR Mar-16 Mar-17
SHAREHOLDER FUNDS NON-CURRENT ASSETS
equity share capital 10.03 10.03 tangible asset 195.24 179.2
preference share capital 0 0 intengible assets 0.73 4.76
TOTAL SHARE CAPITAL 10.03 10.03 capital work-in-progress 2.2 1.76
revaluation reserve 6.44 0
intengible assets under
development 0.04 0
reserve and surplus 270.77 302.35 FIXED ASSETS 198.21 185.72
TOTAL RESERVE & SURPLUS 277.21 302.35 Non-current investments 15.24 17.99
TOTAL SHAREHOLDER'S FUND 287.24 312.38 deferred Tax Assets(net) 0.49 1.26
NON-CURRENT LIABILITIES Long Term Loans & advances 12.62 29.88
long term borrowings 26.19 14.97 Other Non-current Assets 0.15 0.31
deferred tax liabilities(net) 8.32 10.68 TOTAL NON-CURRENT ASSETS 226.71 235.16
long term provision 2.97 3.15 CURRENT ASSETS
TOTAL NON-CURRENT LIABILITIES 37.48 28.8 inventories 174.24 185.13
CURRENT LIABILITIES Trade receivable 137.39 94.12
short term borrowings 260.07 34.54 Cash & Cash Equivalents 29.88 16.31
trade payables 95.17 78.82 Short term loans & advances 31.7 39.38
other current liabilities 119.34 114.42 Other current assets 200.89 0
short term provision 1.46 1.14 TOTAL CURRENT ASSETS 574.1 334.94
TOTAL CURRENT LIABILITIES 476.04 228.92 TOTAL ASSETS 800.81 570.1
TOTAL CAPITAL & LIABILITIES 800.76 570.1
* ALL VALUES IN INR CRORE
BALANCE SHEET ANALYSISbase year 2012-2013
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6. Continue…
476.04
228.92
800.76
570.1
37.48 28.8
287.24 312.38
0
100
200
300
400
500
600
700
800
900
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Capital & Liability analysis
TOTAL CURRENT LIABILITIES TOTAL CAPITAL & LIABILITIES
TOTAL NON-CURRENT LIABILITIES TOTAL SHAREHOLDER'S FUND
226.71 235.16
574.1
334.94
800.81
570.1
100
300
500
700
900
1100
1 2
Asset analysis
TOTAL NON-CURRENT ASSETS TOTAL CURRENT ASSETS
TOTAL ASSETS #REF!
 there is rise in total value of equity as compare to financial year
2016 because profit made by selling of its subsidiary business
Tractors India Private Ltd (TIPL)added to surplus of company.
 long-term liability which have very big significant decrease take
place from 2016 to 2017 which reduce by 89%. It has reduced to
greater extent which may attract share holder.
 there is decrease in Current liability of 77.51% in 2017 compare to
2016 which means company had paid lot to fulfil current stock
requirement and services.
 Tangible fixed asset(non current asset) steep decline in FY 2017 because
of sale.
 Intangible assets It drop down to minimum level because sale of
subsidiary.
 Work in progress It’s value decline drastically in Financial Year 2016-
2017 because of lesser sales due to declining market share and lesser
demand of product in market.
 Inventories It increased because of decreasing demand and customer
order against project sale in Financial Year of 2017.
 Trade receivables It have considerable decrease in Financial Year 2017
because selling of business and lesser no of order received.
 Cash equivalent; decrease with drastic in last Financial Year 2017 to
tackle short term liabilities
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7. PROFIT AND LOSS STATEMENT
336.42
332.89
312.98
308.17
319.16
321.84
290
295
300
305
310
315
320
325
330
335
340
Jan-16 Jan-17
Income statement
Revenue From Operations(Gross sale) TOTAL OPERATING REVENUES
TOTAL REVENUE
166.47 168.66
380.23
312.77
0
50
100
150
200
250
300
350
400
Jan-16 Jan-17
Expenses analysis
Cost of Material consumed TOTAL EXPENSES
The operating income from operations have sharp decrease because revenue raise from
selling subsidiary TIPL and decrease in demand of cranes and other equipment and fall in
market share.
Revenue from other operations consisting of selling commissions, scrap sale, duty
incentives gone down.
Total expenses have decrease throughout the year, because sale of caterpillar dealership
business and cast of expenses also come down in FY 2017.
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8. Continue..
-61.07
9.07
-61.34
-114.96
17.75
141.41
-43.59
26.45
-150
-100
-50
0
50
100
150
200
Jan-16 Jan-17
Profit & loss analysis
PROFIT/LOSS BEFORE EXCEPTIONAL ITEMS AND TAX PROFIT/LOSS FROM CONTINUING OPERATIONS
NET PROFIT/LOSS FROM DISCOUNTING OPERATIONS PROFIT/LOSS FOR THE PERIOD
 The profit before tax and exceptional items positive in FY 2017 because company incurred losses in FY 2016 because
increase in expenses and generate lesser revenue and further small recovery in FY 2017.
 Huge amount of losses were incurred by written off trade receivable and inventory(long term payment, unused out of
date and spare parts were written off) in last FY 2017 because of which profit after tax(PAT) reduce to INR -114 Crore.
 Sale of caterpillar dealership business brought in some cash from discontinued operations and company had made
overall profits of INR 26 Crore because of this big sale of it’s subsidiary.
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9. CASH FLOW STATEMENT
PARTICULAR 2015-2016 2016-2017
PROFIT/LOSS BEFORE TAX
EXTRAORDINARY ITEMS &
TAX -61.07 -112.6
Net cash flow from
operating activities 71.07 -41.51
Net cash use in Investing
Activities -54.5 321.78
Net cash used from
Financing Activities -44.83 -274.89
NET INCREASE/DECREASE
IN CASHANDCASH
EQUIVALENT -28.26 5.38
Cash & cash Equivalent
Begining of year 37.8 9.54
Cash & cash Equivalent
End of year 9.54 14.92
Cash Flow Statement(base year 2012-2013)
OPERATING ACTIVITY It can be seen that company has not done very well to
generate money from it’s operation. However company has to spend from it’s
own account in operating activity due to decrease in revenue collections and
written off inventories, include trade receivable/advances/claims.
Investment activity Here seen that lesser investment on it’s asset. However
there has been accumulation of cash in last FY 2017 because of sale of it’s
subsidiary business.
FINANCIAL ACTIVITY Company has invested in getting free from all the short
term and long term borrowing and financial costs. This give short term relief
from borrowing.
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10. CAPITAL STRUCTURE AND CAPITAL BUDGETING
 NPV shows negative value which is negative sign for company. Which might be occur because in
last FY 2017 sale got decrease and company sell there on of subsidiary in order to maintain there
cash flow and to attract outside finance.
 Here IRR which is negative because of negative value of NPV. it depends solely on the outlay and proceeds
associated with the project and not any rate determined outside the investment. In last FY 2017 because of less
profit and decrease in value of sale, company sell there on subsidiary in order to recover investment.
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No of days of
inventory 186 200
No of days of
receivables 155 105
OPERATING CYCLES 341 305
*ALLDATA IN CRORE
INVESTMENT 2015-2016 2016-2017
CASHFLOW -54.5 9.54 14.92
PV ₹ 1.37
NPV ₹ 55.87
IRR -38%
CAPITALBUDGETING
DISCOUNTRATE---7.30%

11. WORKING CAPITAL
ANALYSIS
• Working capital measures a company’s operation efficiency and short-term
financial health. Here working capital increase by 27% which means in FY17
TIL tried to maintain their flow of capital although its sale decrease from
exceptional items of Rs. 13,078 lakhs.
• The Board of Directors of the Company, at its meeting held on 21st April 2016,
had approved the sale of its Caterpillar Dealership Business as a going concern
in Rs 25,245 lakhs in which the inventory written off by Rs. 8,822 Lakhs and
Trade Receivables written off by Rs. 3,345 lakhs.
• Against the backdrop of the economic scenario; TIL maintained its position
during the FY16-17. TIL also launched a new and improved range of long
boom truck cranes in the 25–80 ton category, which affect a significant
expansion in the market share of truck cranes during the year
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12. RATIO ANALYSIS
 Current ratio shows insufficient liquidity of company day to day work
and shows the ability of company to meet it’s current obligations of
business and interest of creditors are least protected.
 Quick ratio shows how quickly firm able to convert into cash. it should
be noted here is that high value of trade receivable as compare to
current cash and cash equivalent.
 Debtor’s turnover ratio shows in how many days amount collected
from debtors. It value should increase.
 Stock to working capital ratio value decreasing show that decreasing
liquid assets in company to take care of current liabilities.
 Net working capital ratio improve slightly and company seem to have
ability to meet it’s current obligations. But still value very low which
need to improve in further coming year as other liquidity ratio shows
insufficient liquidity of company.
 Inventory turnover ratio down in last year which show that no of days
of holding of it’s inventory has increased. This may because of
decrease in sale due to poor demand of it’s product against sale. This
affect can also seen in Debtor’s turnover ratio shows poor collection of
current debts.
 Working capital turnover ratio drop below 1 which shows inefficient
utilization of working capital.
 Fixed asset turnover ratio decrease at almost half of it’s value which
show underutilization of fixed assets.
 Total asset turnover ratio which follow same trend as above and
shows insufficient use of total assets. 12

13. Continue….
 Gross profit in FY 2017 value increase because profit
addition from discontinue operation(sale of subsidiary
business).
 Net profit ratio have negative because loss made by
company, however PAT value was higher because high profit
from discontinued operation.
 Return on asset margin increase shows profitability of
company has increased. However this increase in profit
because discontinued operation and sale of it’s subsidiary
business and decrease in total assets the company own
because of which value of ROA increased.
 Return on invested capital has increased showing better
profit return on the capital employed.
 Debt equity ratio has sudden dip in FY 2017 which show that company
have lower outsider borrowing which means position of company
slightly better position after sale of dealership business.
 Solvency ratio which show the strength of firm .it’s value increase
continuously which show company’s solvency position is good.
 Fixed asset ratio which gone over 1 which not good for company in last
FY 2017. The value of fixed asset have gone down and value of capital
employed have considerably reduced as long and short term borrowing
have reduced and dependency of short term borrowing is more
currently which is bad for business as it is not good for long term.
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14. 14
Strength:-
• Increase in net-worth and turnover every year
• Increase in share prices
• Inflow of cash from investing activity which provide
the much need cash required to improve it’s profit
and get rid of most of debts.
• Improvement in EPS
Weakness:-
• Debt must have reduced but assets also got reduced and is not sufficient
to take care of liabilities that can be seen from proprietary ratio
• It is more dependent on outsiders fund, can be seen from Debt ratio and
Fixed Asset ratio
• Inventory Turnover ratio shows that conversion of inventory to finished
good is deteriorating, possible reasons of decreases in sales.
• Debtor’s turnover ratio shows deteriorating collection period from their
debtors.
Opportunity:-
• Sales of it’s subsidiary has helped the
company to relive itself from
outstanding liabilities.
• Profit from discontinued operations has
saved the company from making losses
for continuous 2 years.
• Decreases in Debt Equity ratio shows
lesser debt.
• The Profit ratio have improved as the
company made profit this year and the
share prices have increased.
Threat:-
• Cash flow from operating activity has dipped into negative value
and cash generation from operation needs immediate attentions.
• Insufficient liquidity to take care of current liability , can be seen
from Liquidity ratio.
• Decrease in borrowing after sale of it’s subsidiary can be seen from
Net Working Capital ratio
• Debtor’s turnover ratio shows deteriorating collection periods from
there debtor’s.
• Solvency ratio shows deteriorating solvency position of the
company
• Creditors turnover ratio has also decrease ,shows company credit
payment cycle has decreased and it may face problem in releasing
payment to suppliers and has forced the company to take short term
loans.
SWOT
Analysis

15. CONCLUSION
• The company is trying it’s best to come out of it’s loss making condition and has been able to gain
the confidence of it’s share holder which is evident from raising share price. The net worth of
company also stable which give one more reason for shareholder to maintain their belief on
company for their profit maximization.
• The company got a relief from it’s losses and increase debts by selling off it’s successful subsidiary
of caterpillar dealership business. The company is looking at current market conditions and
demand of crane and TIL India unsuccessful road construction equipment. It is too early to
confirms that the company will be successful to reach the set target.
• TIL has intensified focus on aggressive production in order to cater to the Indian retail segment,
along with its existing base of large institutional clients.TIL has a rich legacy of over seven
decades, partnering the nation’s infrastructure build and earning the trust of all stakeholders. As
emerged as a more nimble, adaptive and stronger organization, TIL is confident of breaking new
barriers in technological innovation and market leadership.
• The company has potential to be more profitable and shareholders should invest in TIL Limited’s
share.
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16. THANK YOU
Any question?
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