HEALTHCARE COMPANY LIMITED:

Financial Statement Analysis

The next three worksheets give the company's balance sheet

(BS), profit and loss statement (P&L) and per share data for
five years. You need to comment on the company's financial
performance. Specifically, comment on the company's
efficiency in utilising assets, liquidity position, capital structure
and profitability. Also, comment on the company's
performance in the stock market. The company earned ROE
of 6.5% in 2000 which increased to 26.5% in 2004. How has
ROE been influenced by assets utilisation, profit margin, and
leverage factor (tax and financial)?

Hint: You may calculate the following ratios

Sales/Capital Employed (CE) or Net Assets (NA)
PBIT/Sales
PBIT/CE
PBT/PBIT
PAT/PBT
PAT/PBIT
CE/NW
Leverage factor (PAT/PBIT *CE/NW)
ROE
EBITDA/NA (CE)
M/B
P/E
Dividend yield (DPS/share price)
Earnings yield (EPS/Share price)
 CADILA HEALTHCARE LIMITED
Balance Sheet as on 31 March
(Rs crore)
LIABILITIES 2010 2011 2012 2013
Net worth
Paid-up equity capital 29.77 29.77 29.80 31.40
Reserves & surplus 475.77 512.65 522.20 429.80
505.54 542.42 552.00 461.20
Borrowings 228.93 52.09 266.30 442.90
Deferred tax liabilities 0.00 0.00 39.50 90.50
Current liabilities & provisions
Sundry creditors 75.87 66.92 75.90 155.80
Other current liabilities 18.98 6.20 9.20 16.50
Provisions 19.38 23.62 25.30 37.00
114.23 96.74 110.40 209.30
Total liabilities 848.70 691.25 968.20 1,203.90

ASSETS
Gross fixed assets
Land & building 65.94 77.87 82.30 222.00
Plant & machinery 117.87 144.18 183.90 296.30
Other fixed assets 27.34 34.66 30.70 47.10
Capital WIP 24.93 24.69 45.20 29.00
236.08 281.40 342.10 594.40
Less: cummulative depreciation 20.98 33.52 48.10 113.40
Net fixed assets 215.10 247.88 294.00 481.00
Investments 10.09 176.64 188.00 90.00
Deferred tax assets 0.00 0.00 0.20 4.80
Inventories
Raw materials and stores 27.78 27.94 30.90 65.30
Finished goods 32.81 39.90 47.40 71.90
Semi-finished goods 10.11 15.90 27.40 38.40
70.70 83.74 105.70 175.60
Receivables
Sundry debtors 59.13 51.61 66.90 136.80
Others 62.31 74.98 218.50 82.60
121.44 126.59 285.40 219.40
Cash & bank balance 378.66 41.87 5.70 9.00
Intangible / DRE not written off 54.71 16.53 89.20 224.10
Total assets 850.70 693.25 968.20 1,203.90
2014

31.40
508.10
539.50
405.70
107.20

164.60
17.30
57.10
239.00
1,291.40

206.50
338.60
50.00
41.60
636.70
136.10
500.60
144.10
9.80

56.10
70.30
33.90
160.30

165.90
70.10
236.00
37.20
203.40
1,291.40
 CADILA HEALTHCARE LIMITED
Profit & loss account for the year ending on 31 March
Rs. Crore Mar 2010 Mar 2011 Mar 2012 Mar 2013
Income
Sales 477.75 508.79 588.80 1,028.20
Expenditure
Raw materials, stores, etc. 248.09 234.13 276.50 450.60
Wages & salaries 39.63 50.24 55.30 100.40
Energy (power & fuel) 6.19 8.65 11.10 19.60
Indirect taxes (excise, etc.) 29.89 56.29 60.80 94.60
Advertising & marketing expenses 36.49 37.26 54.60 85.80
Distribution expenses 7.17 7.95 8.30 12.00
Others 42.00 51.07 52.10 112.00
Total 409.46 445.59 518.70 875.00
Change in stocks -0.92 12.88 19.00 9.10
Total expenditure 410.38 432.71 499.70 865.90
Operating income 67.37 76.08 89.10 162.30
Other net income (including non-recurring) 6.16 22.96 21.30 24.00
PBDIT (EBITDA) 73.53 99.04 110.40 186.30
Financial charges (incl. lease rent) 20.73 13.64 16.50 43.70
PBDT 52.80 85.40 93.90 142.60
Depreciation 9.86 14.33 18.80 38.20
PBT 42.94 71.07 75.10 104.40
Tax provision 5.25 5.50 8.00 27.80
PAT 37.69 65.57 67.10 76.60
Appropriation of profits
Dividends 15.57 19.95 20.90 24.80
Retained earnings 22.12 45.62 46.20 51.80
Mar 2014

1,172.30

483.80
124.90
18.10
81.40
100.40
13.30
178.90
1,000.80
-7.20
1,008.00
164.30
82.40
246.70
28.50
218.20
53.10
165.10
22.20
142.90

42.50
100.40
 CADILA HEALTHCARE LIMITED
(Rs) 2010 2011 2012 2013 2014
Share Price 130.00 127.95 130.05 123.50 454.20
EPS 6.33 9.64 11.27 12.87 22.75
BV per Share 84.91 90.51 92.70 77.18 85.90
DPS 2.32 3.00 3.49 3.69 6.00