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BALANCE SHEET OF JOHN LIMITED AS O LIABILITIES NET WORTH LONG TERM DEBT DEFERRED TAX LIABILITIES SHOR TERM

DEBT TRADE CREDITORS AS ON MAR 31, 2012 AS ON MAR 31, 2011 1370 1070 400 500 60 50 100 100 50 40

TOTAL

1980

1760

EXPENSES Opening stock (finished goods) Raw material Employee compensation Power and fuel Other manufacturing expenses Research and development Depreciation Advertising Other marketing and selling expenses General and administrative expenses Training expenses Restructuring expenses Interest Tax expenses Net profit

INCOME STATEMENT OF JOHN LIMITED FOR THE YEAR 2012 2011 60 40 1485 1200 200 180 35 30 500 410 50 180 80 80 120 130 105 100 160 160 70 90 10 10 35 40 132 120 330 300 3372 3070

Number of shares outstanding = 100 Market price per share = Rs.20

E SHEET OF JOHN LIMITED AS ON ASSETS GOODWILL INTANGIBLE ASSETS PROPERTY, PLANT AND EQUIPMENT (NET) INVESTMENTS INVENTORIES PREPAID EXPENSES RECEIVABLES CASH AND BANK TOTAL AS ON MAR 31, 2012 AS ON MAR 31, 2011 200 200 45 50 400 400 150 100 235 255 5 5 650 550 295 200 1980 1760

OF JOHN LIMITED FOR THE YEAR ENDED 31 MAR INCOME Sales Other income Closing stock (finished goods)

2012 3300 12 60

2011 3000 10 60

3372

3070

Assessing liquidity position CURRENT ASSETS INVENTORIES PREPAID EXPENSES RECEIVABLES CASH AND BANK TOTAL QUICK ASSETS CURRENT LIABILITIES TRADE CREDITORS SHOR TERM DEBT TOTAL Assessing solvency position LONG TERM DEBT SHOR TERM DEBT TOTAL DEBT NET WORTH DEFERRED TAX LIABILITIES EFFECTIVE NET WORTH TOTAL ASSETS INVESTED CAPITAL CAPITAL EMPLOYED Net profit Tax expenses Interest Restructuring expenses EBIT MAR 31, 2012 MAR 31, 2011 235 255 5 5 650 550 295 200 1185 1010 945 750

50 100 150

40 100 140

400 60 460 1370 60 1430 1980 1930 1870 330 132 35 10 507

500 50 550 1070 50 1120 1760 1720 1670 300 120 40 10 470

Annual Cost of goods sold Sales Net fixed assets

2972 3300 645

2700 3000 650

Gross profit Operating profit Net profit NOPLAT(Assuming 40% tax rate)

1080 497 330 357

1200 460 300 330

No. of shares Market price

100 20

100 16

MAR 31, 2012 ASSESSING LIQUIDITY POSITION OF THE COMPANY EXCLUDING SHORT TEM DEBT IN CURRENT LIABILITIES CURRENT RATIO QUICK RATIO CASH RATIO INCLUDING SHORT TEM DEBT IN CURRENT LIABILITIES CURRENT RATIO QUICK RATIO CASH RATIO

MAR 31, 2011

23.7 18.9 5.9 7.9 6.3 1.97

25.25 18.75 5 7.21 5.36 1.43

ASSESSING SOLVENCY POSITION OF THE COMPANY TOTAL DEBT/TOTAL ASSETS LONG TERM TERM /TOTAL ASSETS DEBT/EQUITY INTEREST COVERAGE RATIO 0.23 0.20 0.28 14.49 0.31 0.28 0.45 11.75

ASSESSING ASSET EFFICIENCY OF THE COMPANY Cost of goods sold per day Inventory storage period =Inventory (FG)/Cost of goods sold per day Inventory turnover (Using cost of goods sold) = cost of goods sold/inventory Inventory turnover (Using net sales) = Net sales/Inventory 8.14 28.86 12.65 14.04 7.40 34.47 days 10.59 times 11.76 times

Sales per day Average collection period Receivables turnover

9.04 71.89 5.08

8.22 66.92 days 5.45 times

Purchases per day Average payment period Creditor turnover Total asset turnover = Net sales/Total assets Fixed asset turnover =Net Sales/Net Fixed assets Current asset turnover = Net sales/current assets

4.07 12.29 29.70 1.67 5.12 2.78

3.29 12.17 days 30.00 times 1.70 times 4.62 times 2.97 times

ASSESSING PROFITABILITY POSITION OF THE COMPANY Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Retrn on Assets (%) =(NOPLAT/Total Assets) Retrn on Assets (%) =(EBIT/Total Assets) Return on invested capital = NOPLAT/ IC Return on capital employed = PBIT/CE Return on networth = PAT/Effective networth

32.73 15.06 10.00 18.03 25.61 18.50 27.11 23.08

40.00 15.33 10.00 18.75 26.70 19.19 28.14 26.79

DUPONT ANLAYSIS Net profit/Sales Sales/ Total assets Total Assets/Networth ROE ASSESSING MARKET PERFORMANCE OF THE COMPANY Bok value per share = Earning per share = Net profit/ Number of shares Price/Earning ratio Price/Book value ratio

0.10 1.67 1.38 0.23

0.10 1.70 1.57 0.27

14.3 3.30 6.06 1.40

11.2 3.00 5.33 1.43

Current ratio is very high. It is due to less amount of creditors. However, comparision with peer group and industry average is Quick ratio is also very high due to low inventory Cash ratio is also very high.

The liquidity ratios are high even after considering the short term debt. From this, it can be intrepreted that the firm is more dependent on long term sources of finance and investment in fixed asse It can put an effort to improve its bargaining power with the suppliers, thereby increasing the trade creditors and also can inc

For every rupee of investment in total assets, the firm sourced Rs.0.23 from outside debt in the year 2012, which is less than As a whole, it is observed that the firm is more depedent on internal sources than external sources for financing

As indicated by the coverage ratio, the firm is comfortable zone in paying it interest obligations. By looking at both capital structure and coverage ratio, the solvency position of the firm is good. It has a scope for further bo

Average collection period is higher compared to average payment period. It may be an indication of inability of the company to collect money from its customers Morever, it has low bargaining power over its suppliers, as is evident from comparatively less number of average payment pe

The company is able to generate around Rs.1.67 for every rupee of investment in total assets The company is able to generate around Rs.1.67 for every rupee of investment in fixed assets Despite fixed asset turnover ratio marginally increased compared to previous year, current asset turnover resultantly total as It is an indication of marginal decline in asset utilization efficiency of the company. The marginal decline in current asset eficie

All profitbility ratios marginally declined compared to previous years'. This observation was already evident from low total as

peer group and industry average is also required to have meaningful conclusion.

ance and investment in fixed assets is relatively lower than the investment in current assets he trade creditors and also can increase its investments in fixed assets, so as to bring a balance between profitability and liquidty

the year 2012, which is less than the previous year's values. It is due to repayment of debt sources for financing

ood. It has a scope for further borrowings

ss number of average payment period

asset turnover resultantly total asset turnover decreased. ginal decline in current asset eficiency is mainly due to increase in receivables.

already evident from low total asset turnover.

profitability and liquidty

INCOME STATEMENT INCOME Sales Other income Stock adjustments (Closing stock-Opening stock) Total EXPENDITURE Raw material Employee compensation Power and fuel Other manufacturing expenses Research and development Depreciation Advertising Other marketing and selling expenses General and administrative expenses Training expenses Restructuring expenses Interest Tax expenses Net profit Total 2012 3300 12 0 3312 1485 200 35 500 50 80 120 105 160 70 10 35 132 330 3312

BALANCE SHEET AS ON MAR 31, 2012 LIABILITIES NET WORTH LONG TERM DEBT DEFERRED TAX LIABILITIES SHOR TERM DEBT TRADE CREDITORS TOTAL ASSETS GOODWILL INTANGIBLE ASSETS PROPERTY, PLANT AND EQUIPMENT (NET) INVESTMENTS INVENTORIES PREPAID EXPENSES RECEIVABLES CASH AND BANK TOTAL 1370 400 60 100 50 1980 200 45 400 150 235 5 650 295 1980

2011 3000 10 20 3030 1200 180 30 410 180 80 130 100 160 90 10 40 120 300 3030

Vertical Analysis (Individual account balance/Net Sales)*100 2012 2011 100.00 100.00 0.36 0.33 0.00 0.67 100.36 101.00 45.00 6.06 1.06 15.15 1.52 2.42 3.64 3.18 4.85 2.12 0.30 1.06 4.00 10.00 100.36 40.00 6.00 1.00 13.67 6.00 2.67 4.33 3.33 5.33 3.00 0.33 1.33 4.00 10.00 101.00

Raw material cost is 45% of sales for the year 2012 a

All operating expenses contribute to around 85% of s

AS ON MAR 31, 2011 1070 500 50 100 40 1760 200 50 400 100 255 5 550 200 1760

Vertical Analysis (Individual account balance/Total assets)*100 AS ON MAR 31, ON MAR 31, 2011 AS 2012 69.19 20.20 3.03 5.05 2.53 100.00 10.10 2.27 20.20 7.58 11.87 0.25 32.83 14.90 100.00 54.04 25.25 2.53 5.05 2.02 88.89 10.10 2.53 20.20 5.05 12.88 0.25 27.78 10.10 88.89

Around 69% of total asset are sourced fro Around 20% is from long term debt

Out of total assets, intangible assets are a Inventory is around 12% and receivables As a whole, it is observed that receivables

5% of sales for the year 2012 as against to 40% in the previous years

contribute to around 85% of sales

% of total asset are sourced from internal capital as against to 54% in the previous year % is from long term debt

l assets, intangible assets are around 12% and tangible fixed assets are around 20% s around 12% and receivables is around 30%. , it is observed that receivables account for major part of the assets compared with even tangible fixed assets

INCOME STATEMENT INCOME Sales Other income Stock adjustments (Closing stock-Opening stock) Total EXPENDITURE Raw material Employee compensation Power and fuel Other manufacturing expenses Research and development Depreciation Interest Other marketing and selling expenses General and administrative expenses Training expenses Restructuring expenses Interest Tax expenses Net profit Total

BALANCE SHEET LIABILITIES NET WORTH LONG TERM DEBT DEFERRED TAX LIABILITIES SHOR TERM DEBT TRADE CREDITORS TOTAL ASSETS GOODWILL INTANGIBLE ASSETS PROPERTY, PLANT AND EQUIPMENT (NET) INVESTMENTS INVENTORIES PREPAID EXPENSES RECEIVABLES CASH AND BANK TOTAL

2012 3300 12 0 3312 1485 200 35 500 50 80 120 105 160 70 10 35 132 330 v 3312

2011 3000 10 20 3030 1200 180 30 410 180 80 130 100 160 90 10 40 120

Absolute change % Change 300 10.00 2 20.00 -20 -100.00 282 9.31 285 20 5 90 -130 0 -10 5 0 -20 0 -5 12 #VALUE! 582 23.75 11.11 16.67 21.95 -72.22 0.00 -7.69 5.00 0.00 -22.22 0.00 -12.50 10.00 #VALUE! 21.32

2730

AS ON MAR 31, 2012 1370 400 60 100 50 1980 200 45 400 150 235 5 650 295 1980

AS ON MAR 31, 2011 1070 500 50 100 40 1760 200 50 400 100 255 5 550 200 1760 300 -100 10 0 10 220 0 0 -5 0 50 -20 0 100 95 220 28.04 -20.00 20.00 0.00 25.00 12.50 0.00 -10.00 0.00 50.00 -7.84 0.00 18.18 47.50 12.50

Increase in sales is observed. Why?

Increase in rawmaterial consumption is observed. Proportionate increase in raw material consumption is more tnan proporti Increase in rawmaterial consumption is observed. Proportionate increase in raw material consumption is more tnan proporti It may be an indication of rise in raw material prices. Not only rawmaterial cost but also other operating expenses also increased. Decrease is observed in Research and Development expenses and interest Decrease is in interst is due to repayment of a part of long term debt

An increase in netwoth of the company is observed. This is due to reatined earnings in the previous year A part of debt is repaid, as is evident from fall in debt by 20% An increase in trade creditors is also observed

A substantial increase in investments is observed.

An increase in receivables and cash is observed Proportionate in increase in receivables is more than the proportionate in sales. It is also an indication of inability of the comp From this, it is observed that the retained earningss of the previous year have been partly put in investments and partly kept

onsumption is more tnan proportionate increase in sales. onsumption is more tnan proportionate increase in sales.

previous year

indication of inability of the company to collect money from its customers ut in investments and partly kept in the form cash and receivables.A part of long term loan is repaid. Retained earnigs are invested in fixe

tained earnigs are invested in fixed assets