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Your Logo Here Understanding Basics of Financial Statements Client Company’s Name Trainer’s Name Qualifications
Your Logo Here Understanding Basics of Financial Statements Client Company’s Name Trainer’s Name Qualifications

Your Logo Here

Understanding Basics of Financial Statements

Client Company’s Name

Trainer’s Name

Qualifications

Objectives of the Presentation

Your Logo

Here

Objectives of the Presentation Your Logo Here  Understanding the basic concepts and terms used in
Objectives of the Presentation Your Logo Here  Understanding the basic concepts and terms used in
Objectives of the Presentation Your Logo Here  Understanding the basic concepts and terms used in

Understanding the basic concepts and terms used in the Financial Statements.

Understanding the ratios used for analyzing the Financial Statements.

Discussing

valuations.

factors

that

drive

corporate

 

Your Logo

Contents

Here

Your Logo Contents Here  Objectives of Financial Statements  Basic Accounting Concepts  Structure of
Your Logo Contents Here  Objectives of Financial Statements  Basic Accounting Concepts  Structure of
Your Logo Contents Here  Objectives of Financial Statements  Basic Accounting Concepts  Structure of

Objectives of Financial Statements

Basic Accounting Concepts

Structure of Profit & Loss Statement

Structure of Balance Sheet & Cash flow Statement

Q & A

Your Logo

Here

Your Logo Here Which Company will you choose to invest in?     
Your Logo Here Which Company will you choose to invest in?     
Your Logo Here Which Company will you choose to invest in?     

Which Company will you choose to invest in?

Name of Company: Wise Co.

Prudent Co.

Sales Rs. Crore

1000

800

Net Profit

120

200

Profit Margin

12%

25%

Equity Capital

200

500

Debt Funds

200

100

Return on Equity

60%

40%

There are other financial / non-financial factors that would influence investment decisions.

Your Logo

Objectives of Financial Statements

Here

Your Logo Objectives of Financial Statements Here  To provide information to stakeholders about:  
Your Logo Objectives of Financial Statements Here  To provide information to stakeholders about:  
Your Logo Objectives of Financial Statements Here  To provide information to stakeholders about:  

To provide information to stakeholders about:

Performance of the company during a given period:

Financial health of the company as on a specified date.

To furnish information useful in making decisions relating to investment and lending.

 

Your Logo

Basic Financial Statements

Here

Your Logo Basic Financial Statements Here  Profit and Loss Statement.  Balance Sheet.  Cash
Your Logo Basic Financial Statements Here  Profit and Loss Statement.  Balance Sheet.  Cash
Your Logo Basic Financial Statements Here  Profit and Loss Statement.  Balance Sheet.  Cash

Profit and Loss Statement.

Balance Sheet.

Cash Flow Statement.

Statement of Accounting Policies and Notes to Accounts.

Your Logo

Dual Impact of Financial Transactions

Here

 
Your Logo Dual Impact of Financial Transactions Here INCOME EXPENDITURE ASSETS LIABILITIES
Your Logo Dual Impact of Financial Transactions Here INCOME EXPENDITURE ASSETS LIABILITIES
Your Logo Dual Impact of Financial Transactions Here INCOME EXPENDITURE ASSETS LIABILITIES

INCOME

EXPENDITURE

ASSETS

LIABILITIES

Your Logo

Examples of Financial Transactions

Here

 
Your Logo Examples of Financial Transactions Here  Salary Receipt  Rent payment  Purchase of
Your Logo Examples of Financial Transactions Here  Salary Receipt  Rent payment  Purchase of
Your Logo Examples of Financial Transactions Here  Salary Receipt  Rent payment  Purchase of

Salary Receipt

Rent payment

Purchase of House

Taking of Housing Loan

Buying MF Units

Loan EMI

Your own P & L & Balance Sheet Your Logo
Your own P & L & Balance Sheet Your Logo

Your own P & L & Balance Sheet

Your Logo

Here

Personal P & L A/C (Monthly)

 

Personal Balance Sheet

 

Income

Rs.

15,000

1,000

16,000

3,000

3,000

2,000

2,000

10,000

Assets

Rs. Lakhs

Salary

House Property

11

Interest

Bank balances

2

Total Income

Shares

1

Expenditure

Utilities

Mutual Funds

1

Groceries

Total assets

15

Education

 

Maintenance

Liabilities

Total Exps.

Housing Loan

4

Personal Loan

1

Net Income

6,000

3,000

3,000

Total Liabilities

5

Loan EMI

 

Net Savings

Net wealth

10

Your own P & L & Balance Sheet Your Logo Here Personal P & L A/C
Your Logo Fundamental Accounting Concepts Here  Business Entity: An Enterprise is different
Your Logo
Fundamental Accounting Concepts
Here
Business
Entity:
An
Enterprise
is
different

from the persons who own it.

Going Concern: Enterprise will continue to exist in a foreseeable future.

Accrual:

Revenue

and

expenses

are

recognised as

they are incurred

and

not

as

money is received or paid.

 

Substance

over

form:

Substance

of

a

transaction takes precedence over legal form.

Your Logo

Fundamental Accounting Concepts

Here

 
Your Logo Fundamental Accounting Concepts Here  Prudence: Recognise all known expenses and losses. Do not
Your Logo Fundamental Accounting Concepts Here  Prudence: Recognise all known expenses and losses. Do not
Your Logo Fundamental Accounting Concepts Here  Prudence: Recognise all known expenses and losses. Do not

Prudence: Recognise all known expenses and losses. Do not recognise revenue and profits unless you are sure of realisation of the same.

Capital Expenditure: Expenditure which brings into existence asset or benefit of a long term nature. e.g. Building, computers, furniture, equipment.

Revenue

Expenditure:

Expenses

which

are

incurred to earn revenue and which are written off

over a normal accounting period. e.g. salary, rent, stationery, electricity.

 

Your Logo

Profit and Loss (P&L) Account

Here

Your Logo Profit and Loss (P&L) Account Here  A statement showing revenues and expenditure over
Your Logo Profit and Loss (P&L) Account Here  A statement showing revenues and expenditure over
Your Logo Profit and Loss (P&L) Account Here  A statement showing revenues and expenditure over

A statement showing revenues and expenditure over a defined period of time. It shows results of business operations for a defined duration.

Profit =Total Income – Total Expenditure.

It is a measure of financial performance.

Income and Expenditure are recognised in accordance with Generally Accepted Accounting Principles (GAAP).

Structure of a P & L Account Your Logo
Structure of a P & L Account Your Logo

Structure of a P & L Account

Your Logo

Here

Revenue

 
Structure of a P & L Account Your Logo Here Revenue Cost of Material Employee Costs

Cost of

 

Material

Employee Costs

Selling, General & Admn (SGA)

 

Operating Profit (EBIDTA)

Depreciation

 

Interest

Tax

 

Profit After Tax

Revenue

Your Logo

Here

Revenue Your Logo Here  Total Revenue = Sales + other income.  Sales is usually
Revenue Your Logo Here  Total Revenue = Sales + other income.  Sales is usually
Revenue Your Logo Here  Total Revenue = Sales + other income.  Sales is usually

Total Revenue = Sales + other income.

Sales is usually the amount invoiced during the period for product and services.

Some of the amounts invoiced may not have been collected at the year end.

Other income would include dividend, interest etc.

 

Your Logo

Expenditur

Here

 

e

Your Logo Expenditur Here e  Material Cost - Raw Materials and Consumables.  Employee Related
Your Logo Expenditur Here e  Material Cost - Raw Materials and Consumables.  Employee Related
Your Logo Expenditur Here e  Material Cost - Raw Materials and Consumables.  Employee Related

Material Cost - Raw Materials and Consumables.

Employee Related Expenses (ERE) - Salary & allowances, bonus, staff welfare and benefits.

Selling, General & Administration Expenses (SGA) - Bizdev., Advertisements, Commission, Travel, Marketing office expenses, Rent, Electricity, Maintenance, Insurance, Housekeeping, Telephones, Internet link etc.

 

Your Logo

Depreciation

Here

Your Logo Depreciation Here  Depreciation is a charge for use of capital assets.  Non
Your Logo Depreciation Here  Depreciation is a charge for use of capital assets.  Non
Your Logo Depreciation Here  Depreciation is a charge for use of capital assets.  Non

Depreciation is a charge for use of capital assets.

Non – cash charge to the P&L.

Depreciation method ensures that the original cost of an assets less its salvage value is spread over estimated useful life of an asset.

Depreciation methods:

Reducing Balance.

Straight Line /

 

Your Logo

Interest cost

Here

Your Logo Interest cost Here  Interest is an amount payable to the lenders, e.g. Banks,
Your Logo Interest cost Here  Interest is an amount payable to the lenders, e.g. Banks,
Your Logo Interest cost Here  Interest is an amount payable to the lenders, e.g. Banks,

Interest is an amount payable to the lenders, e.g. Banks, Financial Institution, etc.

The interest will arise in relation to

Working capital loans Term Loans

Provision for Tax

Your Logo

Here

Provision for Tax Your Logo Here  Provision for tax relates to income tax payable on
Provision for Tax Your Logo Here  Provision for tax relates to income tax payable on
Provision for Tax Your Logo Here  Provision for tax relates to income tax payable on

Provision for tax relates to income tax payable on the company profit.

It is a notional Figure arrived at by using the provisions of Income Tax Law, but the Final tax liability is assessed by the assessing officer of the Income tax Dept and the difference is settled accordingly

Profit & Loss Account

Your Logo

Here

Profit & Loss Account Your Logo Here Revenue:100 Material Cost 45 Employee Cost 5 G &
Profit & Loss Account Your Logo Here Revenue:100 Material Cost 45 Employee Cost 5 G &
Profit & Loss Account Your Logo Here Revenue:100 Material Cost 45 Employee Cost 5 G &

Revenue:100

Material Cost 45

Employee Cost 5

G & A Exp 15

OPG Profit 35

Depreciation 10

PBIT 25
PBIT 25

Interest 2

PBT 23
PBT 23
Tax 0.5
Tax 0.5
PAT 22.5
PAT 22.5
 

Your Logo

Dividend

Here

Your Logo Dividend Here  Dividend: A portion of profit which is paid holders. to the
Your Logo Dividend Here  Dividend: A portion of profit which is paid holders. to the
Your Logo Dividend Here  Dividend: A portion of profit which is paid holders. to the

Dividend: A portion of profit which is paid holders.

to the share -

Lenders

are

paid

fixed

rate

of

interest,

whereas

shareholders are paid dividend depending upon the profits and the policy of the company.

The Board of the Company recommends the rate of dividend based on the profitability and policy of the Company.

In India, currently there is no tax on dividend received by the shareholder as the company pays dividend tax.

Retained Earnings (RE) Your Logo Here Profit After Tax 22.5
Retained Earnings (RE)
Your Logo
Here
Profit After Tax 22.5

Dividend 2.5

Retained Earnings (RE) Your Logo Here Profit After Tax 22.5 Dividend 2.5 Retained Earnings 20
Retained Earnings 20
Retained Earnings 20
Profitability Ratios Your Logo Here Amount Rs. Cr. Operating Profit Margin or EBIDTA Margin P &
Profitability Ratios
Your Logo
Here
Amount Rs. Cr.
Operating Profit Margin
or EBIDTA Margin
P & L Account
Revenue
Emp. Costs
SGA
Operating Profit
Depreciation
PBIT
Interest
PBT
Tax
PAT
100
45
= Operating Profit / Sales
20
35
= 35 / 100 = 35%
10
25
Operating Profit shows
intrinsic profitability of a
business.
2
23
0.5
22.5
Profitability Ratios Your Logo
Profitability Ratios Your Logo

Profitability Ratios

Your Logo

Here

PBIT

Ratio

P & L Account

Amount Rs. Cr.

= PBIT / Sales %

Revenue

 

100

Emp. Costs

 

45

= 25 / 100 = 25%

SGA

 

20

Operating Profit

 

35

PBIT Ratio shows profitability of a

Depreciation

 

10

business after

PBIT

 

25

accounting for depreciation.

Interest

 

2

PBT

 

23

 

Tax

 

0.5

PAT

 

22.5

     
Profitability Ratios Your Logo Here PBIT Ratio P & L Account Amount Rs. Cr. = PBIT
Profitability Ratios Your Logo Here Net Profit (PAT) Ratio = PAT / Sales % P &
Profitability Ratios
Your Logo
Here
Net Profit (PAT) Ratio
= PAT / Sales %
P & L Account
Revenue
Emp. Costs
SGA
Operating Profit
Depreciation
PBIT
Interest
PBT
Tax
PAT
Amount Rs. Cr.
100
45
= 22.5 / 100 = 22.5%
20
35
Net Profit Ratio shows
profitability of a business
after accounting for all
expenses including
depreciation, interest &
tax.
10
25
2
23
0.5
22.5

Drivers of Profitability in Business

Your Logo

Here

Drivers of Profitability in Business Your Logo Here Segment  Revenue side  Actual Drivers of

Segment

Drivers of Profitability in Business Your Logo Here Segment  Revenue side  Actual Drivers of
Drivers of Profitability in Business Your Logo Here Segment  Revenue side  Actual Drivers of

Revenue side

Actual Drivers of your business segment

Expenditure Side

Actual Drivers of your business segment

Industry Comparison – P&L Your Logo Here Particulars YOUR CO % PEER CO % (Rs. Crs.)
Industry Comparison – P&L
Your Logo
Here
Particulars
YOUR CO
%
PEER CO
%
(Rs. Crs.)
Net Sales
100 100
Other Income
Total Expenditure
Operating Profit
Depreciation
Latest Actual
Income
Statements
PBIT
Interest (Net)
PBT & EI
Tax & Other Adj.
Net Profit (PAT)
 

Your Logo

Balance Sheet

Here

Your Logo Balance Sheet Here  A statement of Assets and Liabilities of the Company. 
Your Logo Balance Sheet Here  A statement of Assets and Liabilities of the Company. 
Your Logo Balance Sheet Here  A statement of Assets and Liabilities of the Company. 

A statement of Assets and Liabilities of the Company.

A snapshot view of a business at a defined point of time.

Balance Sheet is a measure of financial resources or wealth of a company whereas Profit and Loss Account is an indicator of performance of a company,

Balance Sheet is always balanced. Assets are equal to liabilities.

Assets and Liabilities

Your Logo

Here

Assets and Liabilities Your Logo Here  Liabilities: Amounts owed by the Company to parties external
Assets and Liabilities Your Logo Here  Liabilities: Amounts owed by the Company to parties external
Assets and Liabilities Your Logo Here  Liabilities: Amounts owed by the Company to parties external

Liabilities: Amounts owed by the Company to parties external to the Company – sources of funds.

Assets: Resources owned by the company – Application of funds.

It could be presented in either a Horizontal or vertical format.

 

Your Logo

Balance Sheet: Horizontal Structure

 

Here

 

Liabilities

 

Assets

Equity Capital (10)

Fixed Assets (70)

& Reserves (60)

(e.g. Land & building, Plant & machinery , Computers, DG set)

Loan Funds (30)

 
 

Current Liabilities (10)

Current Assets(40)

(e.g. creditors, provision)

(e.g. cash, inventories, Debtors)

 

Total (110)

Total (110)

Your Logo Balance Sheet: Horizontal Structure Here Liabilities Assets Equity Capital (10) Fixed Assets (70) &
Your Logo Balance Sheet: Horizontal Structure Here Liabilities Assets Equity Capital (10) Fixed Assets (70) &
Your Logo Balance Sheet: Horizontal Structure Here Liabilities Assets Equity Capital (10) Fixed Assets (70) &

Your Logo

Balance Sheet: Vertical Structure

Here

Your Logo Balance Sheet: Vertical Structure Here Liabilities (owed) Sources Assets (owned) Application Equity Capital (10)
Your Logo Balance Sheet: Vertical Structure Here Liabilities (owed) Sources Assets (owned) Application Equity Capital (10)
Your Logo Balance Sheet: Vertical Structure Here Liabilities (owed) Sources Assets (owned) Application Equity Capital (10)

Liabilities

(owed)

Sources

Assets

(owned)

Application

Equity Capital (10)

Reserves (60)

Loan Funds (30)

Fixed Assets (70)

Net Current Assets (30) [Current Assets (40) less: Current Liabilities (10)]

Your Logo

Find the items in the wrong heading

Here

 
Your Logo Find the items in the wrong heading Here  Fixed Assets   
Your Logo Find the items in the wrong heading Here  Fixed Assets   
Your Logo Find the items in the wrong heading Here  Fixed Assets   

Fixed Assets

Land Building Finished products Machinery Computers

Furniture and fixtures

Current Assets

Cash Account receivables Raw material Motor vehicles Loans and advances

Your Logo

How do they relate to each other?

Here

 
Your Logo How do they relate to each other? Here Profit & Loss Account Balance Sheet
Your Logo How do they relate to each other? Here Profit & Loss Account Balance Sheet
Your Logo How do they relate to each other? Here Profit & Loss Account Balance Sheet
Profit & Loss Account Balance Sheet 31 March 2008 Balance Sheet 31 March 2009
Profit & Loss Account
Balance Sheet
31 March 2008
Balance Sheet
31 March 2009
Cash Flow
Cash Flow
Net Worth Your Logo Here Balance Sheet Amount Rs. Cr. Net worth = Share Capital +Reserves
Net Worth
Your Logo
Here
Balance Sheet
Amount Rs. Cr.
Net worth
= Share Capital +Reserves
= Rs. 10 +Rs. 60 = Rs. 70 Cr.
Share Capital
Reserves
Net Worth
Loan Funds
Total Liabilities
10
60
70
30
OR
100
Net worth
= Total Assets – Loan Funds
= Rs.100 – Rs.30 = Rs. 70 Cr
Net Fixed Assets
Current Assets
Current Liabilities
Net Current Assets
Total Assets
70
40
10
30
100
Working Capital Your Logo Here Balance Sheet Amount Rs. Cr.  10 = 60 70 =
Working Capital
Your Logo
Here
Balance Sheet
Amount Rs. Cr.
10
=
60
70
=
Working Capital
Current Assets –
Current Liabilities
Rs. 40 - Rs.10
Rs. 30 Cr.
Share Capital
Reserves
Net Worth
Loan Funds
Total Liabilities
30
=
100
Net Fixed Assets
Current Assets
Current Liabilities
Net Current Assets
70
40
10
30
Total Assets
100
 

Balance Sheet Ratios: Debt to

 
   

Equity

 

Your Logo

 

Here

   

Balance Sheet

Amount Rs. Cr.

Debt to Equity Ratio

     

=

Long Term Debt /

Share Capital

 

10

(Equity + Reserves)

Reserves

 

60

=

Rs. 30 / (Rs.10+60)

Net Worth

 

70

=

Rs. 30 / Rs. 70

Loan Funds

 

30

=

0.42:1

Total Liabilities

 

100

 

Net Fixed Assets

 

70

Current Assets

 

40

Current Liabilities

 

10

Net Current Assets

 

30

Total Assets

 

100

Balance Sheet Ratios: Debt to Equity Your Logo Here Balance Sheet Amount Rs. Cr.  Debt
Balance Sheet Ratios: Debt to Equity Your Logo Here Balance Sheet Amount Rs. Cr.  Debt
Balance Sheet Ratios: Debt to Equity Your Logo Here Balance Sheet Amount Rs. Cr.  Debt
Your Logo Balance Sheet Ratios: Current Ratio Here Balance Sheet Share Capital Reserves Net Worth Loan
Your Logo
Balance Sheet Ratios: Current Ratio
Here
Balance Sheet
Share Capital
Reserves
Net Worth
Loan Funds
Total Liabilities
Net Fixed Assets
Current Assets
Current Liabilities
Net Current Assets
Total Assets
Amount Rs. Cr.
=
Current Ratio
Current Assets / Current
Liabilities
Rs. 40 / Rs.10
10
60
=
70
=
4:1
30
100
70
40
10
30
100
Your Logo Mixed Ratio: Return on Equity Here P & L Account 31.3.06 31.3.05  Return
Your Logo
Mixed Ratio: Return on Equity
Here
P & L Account
31.3.06
31.3.05
Return on Equity
Rs. Cr.
Rs. Cr.
=
Profit After Tax /
Average Equity Cap.
Sales
100
80
PBIT
25
20
and Reserves
PAT
22.5
18
=
Rs. 22.5 / ((Rs. 70 + Rs.
50) / 2)
Balance Sheet
31.3.06
31.3.05
Rs. Cr.
Rs. Cr.
=
Rs. 22.5 / 60
10
10
=
37.5%
Share Capital
Reserves
Net Worth
Loan funds
Total Capital
Employed
60
40
70
50
30
20
100
70
Your Logo Mixed Ratio: Return on Capital Employed Here P & L Account 31.3.06 31.3.05 
Your Logo
Mixed Ratio: Return on Capital Employed
Here
P & L Account
31.3.06
31.3.05
ROCE
Rs. Cr.
Rs. Cr.
= Profit before Interest
Sales
100
80
& Tax (PBIT) / Avg.
PBIT
25
20
Capital Employed.
PAT
22.5
18
= Rs. 25 / ((100+70) / 2)
Balance Sheet
31.3.06
31.3.05
Rs. Cr.
Rs. Cr.
Share Capital
Reserves
Net Worth
Loan funds
10
10
= 29.4%
60
40
70
50
30
20
Total Capital
Employed
100
70
 

Your Logo

ROCE

Here

Your Logo ROCE Here ROCE = PBIT / Average Capital employed = (PBIT / Sales) X
Your Logo ROCE Here ROCE = PBIT / Average Capital employed = (PBIT / Sales) X
Your Logo ROCE Here ROCE = PBIT / Average Capital employed = (PBIT / Sales) X

ROCE = PBIT / Average Capital employed

= (PBIT / Sales) X (Sales / Avg.Capital Empl.)

= Profit Margin X Capital Turnover Ratio

= Operating Efficiency x Efficiency in utilising

capital.

Your Logo
Your Logo

Your Logo

Mixed Ratio: Earnings Per Share (EPS)

Here

 

EPS

 

P & L Account

Amount Rs. Cr.

=

Profit After Tax / No. of

Sales

 

100

shares outstanding

 

PBIT

 

25

=

Rs. 22.5 Cr. / 1 Crore

 

Shares

PAT

 

22.5

=

Rs. 22.5

Balance Sheet

Amount Rs. Cr.

Share Capital (1 Crore shares)

 

10

Reserves

 

60

Net Worth

 

70

Loan Funds

 

30

Total Liabilities

 

100

Your Logo Mixed Ratio: Earnings Per Share (EPS) Here  EPS P & L Account Amount
Your Logo Asset Turnover Ratios Here P & L Account 31.3.06 31.3.05  Fixed Asset Turnover
Your Logo
Asset Turnover Ratios
Here
P & L Account
31.3.06
31.3.05
Fixed Asset Turnover
Rs. Cr
Rs. Cr.
Ratio
Sales
100
80
=
Sales / Avg. Fixed
Assets
PBIT
25
20
=
Rs. 100 Cr / ((70+50)/2)
PAT
22.5
18
=
1.67
Balance Sheet
31.3.06
31.3.05
Rs. Cr
Rs. Cr.
Net Fixed Assets
Net Current Assets
70
50
30
20
Total Assets
100
70

Asset Turnover Ratios

Your Logo

Here

Asset Turnover Ratios Your Logo Here    Inventory Turnover Ratio Sales / Avg. Inventory
Asset Turnover Ratios Your Logo Here    Inventory Turnover Ratio Sales / Avg. Inventory
Asset Turnover Ratios Your Logo Here    Inventory Turnover Ratio Sales / Avg. Inventory

Inventory Turnover Ratio Sales / Avg. Inventory

=

Debtors Turnover Ratio Sales / Avg. Debtors

=

Capital Turnover Ratio

=

Sales / Avg. Capital Employed

Your Logo Industry Comparison – Balance Sheet Here Particulars (Rs. Crs.) Equity Reserves Shareholder Funds YOUR
Your Logo
Industry Comparison – Balance Sheet
Here
Particulars
(Rs. Crs.)
Equity
Reserves
Shareholder Funds
YOUR CO
%
PEER CO
%
Loan Funds
Deferred Tax Liability
Latest Actual
Balance Sheets
Total Liabilities
100
100
Net Fixed Assets
Investments
Current Assets
Less: Current Liabilities
Net Current Assets
Misc. exp not W/Off.
Total Assets
100
100

Your Logo

Here

Your Logo Here Concept of Valuation of Equity Shares  Face Value  Book Value 
Your Logo Here Concept of Valuation of Equity Shares  Face Value  Book Value 
Your Logo Here Concept of Valuation of Equity Shares  Face Value  Book Value 

Concept of Valuation of Equity Shares

Face Value Book Value Market Value

Your Logo Valuation of Equity Shares: Face/Book Value Here Balance Sheet Amount Rs. Cr.  Face
Your Logo
Valuation of Equity Shares: Face/Book Value
Here
Balance Sheet
Amount Rs. Cr.
Face Value is par value of the
share appearing on the face of
share certificate
Share Capital
10
(1 Cr. Shares of Rs.10
each)
= Rs. 10 per share.
Book Value is the net worth
divided by a no. of outstanding
shares.
= (Share Capital + Reserves) /
No. of outstanding shares.
= Rs. 70 Cr. / 1 Cr.
= Rs. 70 per share.
Reserves
Net Worth
Loan Funds
Total Liabilities
Net Fixed Assets
60
70
30
100
70
Current Assets
Current Liabilities
40
10
Net Current Assets
30
Total Assets
100

Your Logo

Here

Your Logo Here Valuation of Equity Shares: Market Value  Market Value (MV) of a listed
Your Logo Here Valuation of Equity Shares: Market Value  Market Value (MV) of a listed
Your Logo Here Valuation of Equity Shares: Market Value  Market Value (MV) of a listed

Valuation of Equity Shares: Market Value

Market Value (MV) of a listed share is the price of the share quoted on a recognized stock exchange.

Your Logo

Here

Your Logo Here Current Valuations of select Auto Companies Name of the Face Value Book Value

Current Valuations of select Auto Companies

Your Logo Here Current Valuations of select Auto Companies Name of the Face Value Book Value
Your Logo Here Current Valuations of select Auto Companies Name of the Face Value Book Value

Name of the

Face Value

Book Value

Market Value

Company

(Rs.)

(Rs.)

(Rs.)*

YOUR CO

 

Actual Data

 

PEER CO 1

     

PEER CO 2

     

* As on DATE

Your Logo Price Earning Ratio Here  PE = MV / EPS 100 / 10 =
Your Logo
Price Earning Ratio
Here
PE
=
MV / EPS
100 / 10 = 10

PE is driven by a no. of subjective and objective factors associated with the company and the industry it belongs to:

Projected Growth of sales, profit,cash flow and EPS. Company brand equity, management practices, corporate governance. Market sentiment

MV

= EPS x Price Earnings (PE) Ratio

EPS = PAT / No. of outstanding shares

Your Logo

Here

Your Logo Here Current PE Ratios of select Auto Companies Name of the EPS (Rs.) PE

Current PE Ratios of select Auto Companies

Your Logo Here Current PE Ratios of select Auto Companies Name of the EPS (Rs.) PE
Your Logo Here Current PE Ratios of select Auto Companies Name of the EPS (Rs.) PE

Name of the

EPS (Rs.)

PE

MV Rs.*

Company

YOUR CO

 

Actual Data

 

PEER CO 1

     

PEER CO 2

     

* As on DATE

Market Value of a Company

Your Logo

Here

Market Value of a Company Your Logo Here  Market Value of a company or Market
Market Value of a Company Your Logo Here  Market Value of a company or Market
Market Value of a Company Your Logo Here  Market Value of a company or Market

Market Value of a company or Market Capitalization is the price you will pay to buy all the shares of a company at a given point of time.

= No. of shares outstanding x Market value of a share.

For Example, market capitalization of M & M is as follows:

No. of Shares

= Actual no. of Shares

Price of a share = Rs. 0.00 per share

Market Cap.

= Rs. Actual Crs

Your Logo

Here

Your Logo Here Q & A
Your Logo Here Q & A
Your Logo Here Q & A

Q & A

Your Logo

Here

Your Logo Here Thank you!! Sooner or Later, those who win are those who think they
Your Logo Here Thank you!! Sooner or Later, those who win are those who think they
Your Logo Here Thank you!! Sooner or Later, those who win are those who think they

Thank you!!

Sooner or Later, those who win are those who think they can

-Anonymous