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Financial Management

ASSIGNMENT 2
NAME- Sukhmani Billa

DIVISION- F

BATCH- 34th batch

ROLL NUMBER- 340641


Introduction:
In this assignment, we are going to analyse the annual report of the
following two companies which are as follows:
i. CEAT Tyres
ii. MRF Tyres
We will analyse the balance sheet, and profit & loss a/c of the
company.
CEAT Tyres:
Equity
The equity structure of the company is as follows
Mar Mar Mar
Particulars Mar '16 Mar '15
'14 '13 '12
Equity Share
40.45 40.45 35.96 34.24 34.24
Capital
Share
Application 0 0 0 3.64 3.64
Money
Reserves 1,950.81 1,558.09 931.14 708.77 618.46
Total 1,991.26 1,598.54 967.1 746.65 656.34

If we analyse the equity structure of the company it shows that equity


has grown over the years. In 2012 and 2013 the company also had
share application money which was kept idle not utilize until march
2013. The reserve of the company has also grown substantially from
2012-2016. The company has kept a huge amount of reserve with
them this can be utilise later by the company.
Debt:
The debt of the company is as follows:
Particular Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Secured Loans 556.45 519.15 808.39 682.16 936.43
Unsecured Loans 55.43 92.01 188.88 121.67 134.38
Total Debt 611.88 611.16 997.27 803.83 1,070.81
The company has decreased its debt over a period of time but if we
see the table it shows that company has raised some debt in 2014,
maybe the company wanted to get some capital requirement so they
have raised some loan.
Retained Earnings:
If we analyse the balance sheet the company did not had any retained
earnings head, but the company had reserve and surplus head, which
may consist retained earnings. The retain earnings of the company can
be used for the expansion project.
Fixed Cost:
The profit and loss a/c does not disclose any type of fixed cost but as
we know that depreciation is a fixed cost we assume it.
Particular Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Depreciation 100.42 87.85 82.63 78.16 70.47

If we see the table, we can conclude that there is increase in the fixed
asset of the company.
Variable Cost:
There are various heads of variable cost which is given below:
Particular Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Raw Materials 3,247.83 3,421.07 3,607.61 3,450.89 3,342.81
Power & Fuel Cost 42.81 161.37 172.67 166.77 151.47
Employee Cost 367.17 349.85 289.07 269.1 232.7
Miscellaneous
1,048.78 964.42 768.27 604.38 463.57
Expenses
We can observe that these costs are changing every year as they are
based on the number outputs.
Revenue:
Below table gives us the idea about the revenue of the company for 5
years. It shows that EPS has increased every year since 2012

.
Particular Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Revenue 5,532.23 5,557.89 5,466.54 4,909.41 4,462.97
EBIT 725.22 573.33 546.29 340.11 201.95
EBT 636.06 442.87 377.13 145.73 9.79
EAT 452.52 298.97 253.78 106.35 7.54
EPS 111.87 73.91 70.58 31.06 2.2

Leverages:
Particulars Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
DOL 1.14 1.15 1.15 1.23 1.35
DFL 1.14 1.29 1.45 2.33 20.63
DCL 1.30 1.49 1.67 2.87 27.83
The above table gives us the information about the leverages of the
company. They are consistent for the past 4 years except for year
2012 where the interest was high as compared to other years.
MRF Tyre:
Equity
The equity structure of the company is as follows
Particulars Mar '16 Sep '14 Sep '13 Sep '12 Sep '11
Equity Share Capital 4.24 4.24 4.24 4.24 4.24
Reserves 6,790.09 4,513.40 3,640.90 2,853.56 2,293.53
Total 6,794.33 4,517.64 3,645.14 2,857.80 2,297.77

If we analyse the equity structure of the company it shows that equity


has grown over the years. The reserve of the company has also grown
substantially from 2012-2016. The company has kept a huge amount
of reserve with them this can be utilise later by the company.
Debt:
The debt of the company is as follows:
Particulars Mar '16 Sep '14 Sep '13 Sep '12 Sep '11

Secured Loans 1,056.64 1,390.87 1,259.92 1,433.34 1,139.47


Unsecured Loans 916.87 424.13 168.77 198.09 232.09
Total Debt 1,973.51 1,815.00 1,428.69 1,631.43 1,371.56

The debt of the company is increasing yearly except in 2013 the


company has decreased its debt by 200 Cr approx. and then in next
year the company has issued another debt of 400 Cr.
Retained Earnings:
If we analyse the balance sheet the company did not had any retained
earnings head, but the company had reserve and surplus head, which
may consist retained earnings. The retain earnings of the company can
be used for the expansion project.
Fixed Cost:
The profit and loss a/c does not disclose any type of fixed cost but as
we know that depreciation is a fixed cost we assume it.
Mar Mar Mar
Particular Mar '16 Mar '15
'14 '13 '12

Depreciation 734.76 423.09 372.93 301.11 247.63

If we see the table, we can conclude that there is increase in the fixed
asset of the company.
Variable Cost:
There are various heads of variable cost which is given below:
Particular Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
Raw Materials 11,660.63 8,635.06 8,137.76 8,590.59 7,615.20
Power & Fuel 842.05 664.67 600.11 618.51 436.91
Cost
Employee Cost 1,283.27 732.69 603.49 513.69 446.75
Miscellaneous 2,173.12 1,218.04 1,049.89 904.22 740.01
Expenses

We can observe that these costs are changing every year as they are
based on the number outputs.
Revenue:
Below table gives us the idea about the revenue of the company for 5
years. It shows that EPS has increased every year since 2012.
Particular Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
20,443.82 13,244.02 12,186.92 11,920.02 10,477.82
Revenue
EBIT 3,749.99 1,570.47 1,422.74 991.90 991.32

EBT 3,410.27 1,338.89 1,226.80 833.12 893.65

EAT 2,327.72 897.89 802.21 572.36 619.42


5,488.43 2,117.09 1,891.49 1,349.54 1,460.50
EPS
Leverages:
Particulars Mar '16 Mar '15 Mar '14 Mar '13 Mar '12
DOL 1.20 1.27 1.26 1.30 1.25
DFL 1.10 1.17 1.16 1.19 1.11
DCL 1.32 1.49 1.46 1.55 1.39

The above table gives us the information about the leverages of the
company. There is not much difference in the leverages of the
company they are consistent for the past 5 years.