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SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA) GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY
BBA III (M) BATCH -2009-2012
Submitted To: Mrs Tanvi Gupta Lecturer
Submitted By: Name Vijay Thapa Enrolment No. – 00514101709
This is to certify that Mr. Vijay Thapa, Enrollment No. – 00514101709 student of Bachelors Of Business Administration to at Jagannath Singh International Indraprastha Management Of Ntpc Ltd. I certify that the project has been completed under my guidance ad it is an authentic work and have never been submitted elsewhere or has not been sourced through other means. School, affiliated Guru Gobind
University has successfully completed the project titled Balnce Sheet Analysis
Mrs Tanvi Gupta [Internal Project Guide]
By Vijay Thapa
TO WHOMSOEVER IT MAY CONCERN
This is to certify that VIJAY THAPA student of BBA (2009-12) has completed his project on “BALANCE SHEET ANALYSIS OF NTPC guidance. His work is up to my satisfaction and worth appreciation. I wish him all the best for future endeavors. Ltd” under my
Mrs. Tanvi Gupta Project Guide
Vijay Thapa Enrolment No. – 00514101709 Bachelors of Business Administration 3rd Semester Jagannath International Management School. I also want to thank Indraprastha University to give us opportunity to prepare independent projects in our interested areas i. students can choose from ‘Finance. Production.e. Kalkaji 4 . Tanvi Gupta. Marketing. Internal Project Guide. Sales and Human Resource etc I am also thanks to Mrs.Acknowledgement I express my gratitude and convey my thanks to all the teachers for their guidance and motivation to complete this project. Her constant motivation and evaluation enabled me to make this project more analytical and conclusive.
CONTENTS Table Of Content Executive Summary Objectives Company’s Profile 1) About The Company 2) Board Of Directors Research Methodology Secondary Data 1) Balance Sheet 2) Profit & Loss Account Ratio Analysis i) Liquidity Ratio ii) Solvency Ratio iii) Activity Ratio iv) Profitability Ratio Analysis Cash Flow Statement Analysis Of Cash Flow Statement Income Statement Analysis Of Income Statement Conclusion Bibliography Page No. 6 10 12 13 15 21 23 24 26 29 31 36 42 50 60 63 65 66 68 70 72 5 .
The Company NTPC was incorporated in 1975. The Company's principal business is generation and sale of bulk power. During fiscal 2009. managerial and financial skills. oil and gas exploration and.939 billion units of electricity. 2009 (fiscal 2009). the power stations of the Company generated 206. The Company has acquired 44. Other business includes providing consultancy. It has an installed coal-based capacity of 23. 66% of total power generation was from coal stations. In the last 31 years.6% stake in Transformers and Electricals Kerala Ltd. project management and supervision. NTPC is the sixth largest thermal power generator in the World and the Second most efficient utility in terms of capacity utilisation based on data of 1998. Combining the technical. Consultancy NTPC provides consultancy in all its aspects of power plant construction and management right from concept of commissioning and beyond. it provides the holistic solutions to power businesses all over the world.NTPC Limited (NTPC) is an India-based company engaged in the generation of thermal power. 2009.895 megawatts comprising 79 units with average fleet age of 18 years. coal mining. 7 . During the fiscal year ended March 31. (TELK) from Government of Kerala on June 19. it has grown into the largest power utility of India.
Quality Assurance and Inspection. every year. Since then. of India. NTPC has been placed under the 'Excellent category' (the best category). and Third Party Quality inspection on the behalf of utility. NTPC was among the first Public Sector Enterprises to enter into a Memorandum of Understanding (MOU) with the Government in 1987-88. Public and others. Project monitoring. establish & operate Electricity Distribution Network in various circles/cities across India. It also provides consultancy in the area of power plant constructions and power generation to companies in India and abroad.INTRODUCTION NTPC Limited or National Thermal Power Corporation Ltd is the largest thermal power generating company of India. It was incorporated in August 2002 with the objective to acquire. NTPC was founded in 1975 to give boost to power development in the country as a wholly owned company of the Government of India. 8 . In recognition of its excellent performance and tremendous potential NTPC has been given the status of " Navratna " by the Government SUBSIDIARIES NTPC Electric Supply Company Ltd (NESCL): NESCL is a wholly owned subsidiary of NTPC. Presently. Government of India holds 89. construction and operation of power generating plants.5% is held by FIIs.5% equity in the company and the balance 10. NTPC is the sixth largest thermal power generator in the world and the second most efficient utility in terms of capacity utilisation based on data of1998. Domestic Banks. The company provides consultancy in the area of: Turnkey execution. NTPC is engaged in engineering.
2002 to develop small and medium sized Hydro Electric Power Projects of up to 250 MW capacity. (NVVN): It was formed to cater to and deal with the vast potential of power trading in the country and optimum capacity utilisation. Provides power at the cheapest average tariff in the country. Second most efficient utility in terms of capacity utilization. 9 . Sixth largest thermal power generator in the world. Major Achievements of NTPC • • • • • Largest thermal power generating company of India. One of the nine PSUs to be awarded the status of Navratna. NTPC Hydro Limited (NHL): It was set up in December.NTPC Vidyut Vyapar Nigam Ltd.
The objective was to determine the financial health of the company by finding out various ratios and analysing the various financial statements of the company like profit and loss account. balance sheet etc…… 11 .OBJECTIVE The basic objective of the project is to know the financial position of NTPC Ltd. By analysing the balance sheet of the company.
9000 MW through Hydro generation. subsidiaries and takeover of stations. It was founded on November 7. In addition under JVs. construction and operation of power generating plants and providing consultancy to power utilities in India and abroad.000 MW company by 2017. located across the country. 13 . joint ventures. NTPC has embarked on plans to become a 75. 3 stations are coal based & another station uses naphtha/LNG as fuel. 1975. It is an Indian public sector company listed on the Bombay Stock Exchange although at present the Government of India holds 84. Forbes Global 2000 for 2009 ranked it 317th in the world. By 2017. NTPC has adopted a multi-pronged growth strategy which includes capacity addition through green field projects. The total installed capacity of the company is 31134 MW (including JVs) with 15 coal based and 7 gas based stations. about 2000 MW from nuclear sources and around 1000 MW from Renewable Energy Sources (RES). the power generation portfolio is expected to have a diversified fuel mix with coal based capacity of around 53000 MW.5%(after divestment the stake by Indian government on 19october2009) of its equity. 10000 MW through gas.ABOUT THE COMPANY NTPC Limited (Formerly National Thermal Power Corporation) is the largest state-owned power generating company in India. With a current generating capacity of 31134 MW. NTPC's core business is engineering. expansion of existing stations.
NTPC has been operating its plants at high efficiency levels. 10 Indian companies make it to FT's top 500 14 . 1956.65% more than for the same quarter in the previous financial year. 170.51% and it generated 29. Every fourth home in India is lit by NTPC. The Net Profit after Tax on March 31. Although the company has 18. Pursuant to a special resolution passed by the Shareholders at the Company’s Annual General Meeting on September 23.202 million. 2006 was INR 58. 2005. 2006 was INR 15528 million.88BU of electricity was produced by its stations in the financial year 2005-2006. 2005). the name of the Company "National Thermal Power Corporation Limited" has been changed to "NTPC Limited" with effect from October 28. The primary reason for this is the company's foray into hydro and nuclear based power generation along with backward integration by coal mining. 2005 and the approval of the Central Government under section 21 of the Companies Act.79% of the total national capacity it contributes 28. (NTPC) is in the 138th position in Fortune 500 in 2009. which is 18.60% of total power generation due to its focus on high efficiency. NTPC’s share at 31 Mar 2001 of the total installed capacity of the country was 24.68% of the power of the country in 2008-09. Net Profit after Tax for the quarter ended June 30.
he is currently pursuing a doctorate in ‘Select Study of Project Performance Metrics in Indian Construction Industry’ from IIT-Delhi. general management. has an illustrious career spanning over 32 years of outstanding contribution in the fields of engineering. Sh. He is a Graduate in Civil Engineering from Birla Institute of Technology. he was Regional Executive Director (National Capital). he was the Executive Director (Finance) in National Fertilizers Limited (NFL) as head of Finance & Accounts department. Chairman & Managing Director since September 2010. He held various managerial positions in Krishak Bharati Cooperative Limited (KRIBHCO) and Engineering Projects of India Limited (EPIL). strategic management and business leadership. As Finance Director on the Board of NTPC.BOARD OF DIRECTORS Shri Arup Roy Choudhury. Contracts & Materials Management.K. comes with rich experience of 29 years of Corporate Finance Management. he is responsible for formulating financial strategies and plans to enable the company in achieving its Vision. Consultancy. Engineering. He has a rich and varied experience of over 31 years in the areas of Commercial. He is also a member of All India Management Association (AIMA) and Institute of Internal Auditors (IIA). Director (Finance) since August 2005. Shri A.Kapoor.J. Prior to joining NTPC in 2001. Prior to his elevation as Director (Commercial). Cost Engineering. He joined NTPC in 1978 as 3rd batch Engineering Executive Trainee (EET) and is the first EET to be on the Board of the Company. Project co-ordination. I. Director (Commercial) since December’ 2008 is a Graduate in Mechanical Engineering and Masters in Business Administration (Marketing). Station Engineering and Quality Assurance & Inspection. A keen learner of the latest professional developments. Mesra and a Post-Graduate in Management and Systems from IIT-Delhi. a Chartered Accountant. Singhal. 15 .
K. Singh (55 yrs). Before his elevation as Director (Technical). administering more than ¼th of NTPC’s turn over along with project implementation activities for 2x490 MW at Dadri Stage-II. He has rich and varied experience of over 35 years in design and execution of large power plants.NTPC. Jain (58 years) is a graduate in Mechanical Engineering from IIT. He has expertise in the area of Financial Management and General Administration. in the areas of Fuel Management. He was elevated as Executive Director (Coal Mining & Coal Washeries) in 2004. is a Graduate in Mining Engineering.K. Shri D. Kharagpur. He started his career in 1974 in coal mining sector firstly with Indian Iron & Steel Company and subsequently joined Bharat Coking Coal Ltd. Com and FICWA. Jain. in 1981 and worked in various capacities. He was actively involved in design and engineering of first pit-head super thermal power station of NTPC at Singrauli. He joined NTPC Ltd. engineering and project execution.K. taking up feasibilities studies. He has held directorship in Steel Authority of India and Naively Lignite Corporation as non-official part-time Director. at Corporate Centre and Power Projects. He has been on the Board 16 . He has worked in various capacities in the areas of renovation & modernisation. has taken over the charge as Director (Technical) as on 13th May 2010. he was Executive Director (Engineering). Shri D. responsible for management of ~ 3900 MW generating capacity. Sengupta is B. Shri P. He has held the position of Director (Finance) in Eastern Coalfields Limited. gas and hydro power projects.P. He has rich and varied experience both in coal as well as power sector. responsible for identification of sites. He joined NTPC Limited in 1978. Director(Projects). design and detailed engineering of coal. Coal Mining & Coal Washery. Sri B. He also oversees the Mine Planning and Design of NTPC’s Captive Coal Blocks. Director (Finance) in Coal India Limited prior to becoming Chairman & Managing Director of Coal India Limited in January 1995.
He has key expertise in strategic management of transport systems with special focus on Railways. He has key expertise in strategic 17 . 1964 batch. He has been on the Board of the Company with effect from August 26. monitoring and control of operational and commercial activities and development of transport infrastructure. He has wide experience in both Development and Regulatory Administration at the Central. London and an Indian Administrative Officer of Gujarat Cadre. UK. Phil (Public Administration) from Indian Institute of Public Administration. Buch is M.Sc. Punjab University.A. Shri M.time director.Sc (Hons. (History) from Delhi University. 2008 as a non-official part . PG Diploma holder in Port Management and Administration from University College. Ministry of Finance.N. He has held various posts in Gujarat Government.Sc (Hons. Sports Authority of India prior to becoming Member of Public Enterprises Selection Board. marketing. He has held various posts in Railways prior to becoming Member (Traffic). He has held various posts in Railways prior to becoming Member (Traffic). State and District levels. UK. (Mathematics) from Delhi University and has pursued Management Development Programme at British Transport Staff College.Sc. GOI. He had held the position of Joint Secretary to the Government of India in Department of Banking. (Mathematics) from Delhi University and has pursued Management Development Programme at British Transport Staff College. M. He has been on the Board of the Company with effect from August 26. Railway Board. He has been also on the Board of various public sector banks. involving planning. 2008 as a nonofficial part .time director.of the Company with effect from August 26. in Physics) and M. in Physics) and M. Additional Secretary to the Ministry of Labour. GOI. 2008 as a non-official part . Railway Board. DirectorGeneral. customer relations. Shri Shanti Narain is B. Shri Shanti Narain is B.time director.
Australia. M. including the “Gem of India” award. Research School of Pacific and Asian Studies. monitoring and control of operational and commercial activities and development of transport infrastructure. Economic Advisory Council to the Prime Minister. He has been on the Board of the Company with effect from January 30. Australian National University.time director.time director. he started the Centre for Excellence in Project Management. In 1973. He has been on the Board of the Company with effect from August 26. Canberra.time director. 2008 as a nonofficial part . He has been on the Board of the Company with effect from August 26. He is also a Member. In 1992. He has published 12 books and monographs on various aspects of Public Finance besides technical articles in a number of journals. Company with effect from August 26. He has been conferred with 6 major awards in India. 2008 as a nonofficial part . Dr. customer relations. He has done his MS in Control Systems at Carleton University. Bangalore and Fellow. involving planning. 2009 as a non-official part . 18 . He has also served as the Head of IT and Project Management Services in BHEL. he returned to India to help the country embark upon major computerization program. National Institute of Public Finance and Policy.time director.management of transport systems with special focus on Railways. He has over 40 years of experience in project oriented work beginning with two state-of-the-art projects in early 1970’s in USA. Shri Adesh Jain is a Bachelor of Science in Mathematics and an Electrical Engineer from the Indian Institute of Science. Institute for Social and Economic Change. marketing. Bangalore. He is author of the book “New Dimensions in Project Management”. 2008 as a non-official part . He has played a number of advisory roles in various Expert Committees. Ottawa. His past positions include Director. New Delhi. Govinda Rao is Director.
Sc. Ministry of Power. He also held the position of Executive Director (Motive Power). He also served as Chairman of Food Corporation of India and after retirement was appointed as Chairman of the National Shipping Board constituted by the Central Government. UK. 2009 as a non-official part .Sc (Engg) from UK. He has also held position of Joint Secretary & Financial Adviser (JS & FA) in Ministry of Water Resources and additional charge of JS & FA. He has been on the Board of the Company with effect from January 30. Shri Arun Kumar Sanwalka is M. (E).Shri Santosh Nautiyal is a Post Graduate in Political Science and Public Administration. Shri Kanwal Nath. He has also handled several projects for establishing large production. Mech. Govt of India in Department of Consumer Affairs. Joint Secretary in Ministry of Steel and Managing Director in Industrial Promotion and Investment Corporation of Orissa Ltd.) National Highway Authority of India. & Prod. RDSO for several years. and holds PG Diploma in Development Finance from the University of Birmingham. He has been on the Board of the Company with effect from January 30. He belonged to Indian Administrative Services (Orissa 1968) and retired in July 2006 as Chairman (in the rank of Secretary to the Govt. Northeast Frontier Railway after 38 years of service.time director. maintenance and repair facilities of Indian Railways. He has wide expertise in the areas of General Management & Administration. of India. He has wide experience in the Audit of Organizations in Power. He has held various positions like Additional Secretary. He has held various positions in Indian Railways and retired from the position of General Manager. in Physics. UK. and AMIE (India) – Mech. Telecommunication and Railway Sector. He has over 37 years of experience in Indian Audit and Accounts service. Project management and coordination.time director. I. He has 19 . Transport planning. He retired as Dy. Comptroller & Auditor General in February 2007. Principal Secretary of Government of Orissa. is M. 2009 as a non-official part .
Principal Director (Commercial Audit).C. Embassy of India. Accountant General (AG) (Audit). Commissioner (Gorakhpur) and Secretary (PWD) in the state of Uttar Pradesh.been on the Board of the Company with effect from January 30. He is an officer of Indian Audit & Accounts Service (1981).P. He graduated with a Master of Arts degree from Delhi University and holds Junior Research Fellowship of UGC for Master of Philosophy. Keshari. Shri T. is a Government nominee Director. Prior to this. 20 . Entitlement. He is looking after the work of Chief Vigilance Officer of our company since October. Shri Keshari appointed as a Director on Board in May. 2009 as a nonofficial part . Washington. USA. Venkatesh. Cadre. 2009. Principal Director (Report States) – Office of Comptroller & Auditor General of India.P. (DOPT) in the Ministry of Personnel & Public Grievances & Pension. Shri Keshari was in the Ministry of Commerce & Industry and has also held various administrative posts in the State of Madhya Pradesh and Chhattisgarh. Shri Keshari is an Indian Administrative Services officer of Madhya Pradesh cadre. 2009. Ranchi and Principal Director of Audit.(48 years) has done his Post Graduation in Mechanical Engineering and is an Indian Administrative Service officer of 1988 batch of U. Rajasthan.time director. Prior to his assignment as Jt. born in 1957. Secy. AG(AE-II) Madhya Pradesh. He has held various important positions such as Director General (Accounts. he held various administrative posts including DM (Bareilly). Complaints & Information System). He holds Masters Degree in Physics from Delhi University. Shri I. is a Government nominee Director in our Company. He is currently Joint Secretary in the Ministry of Power. He is currently the Joint Secretary & Financial Adviser (JS & FA) in the Ministry of Power and also holds additional charge of the post of JS & FA of the Ministry of Labor & Employment. Shri Rakesh Jain.
3. INTERNET SITES CONCERNED BOOKS PEOPLE MAGAZINES 22 .RESEARCH METHODOLOGY SECONDARY DATA : The methodology used for conducting the research is the collection and analysis of secondary data. which is the data available in the published form and is not primary in nature. 4. 2. The following forms of secondary data tools were used for the research purpose: 1.
00 329357.00 260614.00 31.61 19.00 39097.00 0.00 264049.19 25.00 32495.21 31-Mar-08 0.00 79299.21 49.00 383.00 65300.16 0.00 10475.22 49.00 443931.03 29.00 17028.00 328974.00 29827.00 70263.42 6.00 152672.00 %BT 0.18 6.00 424873.09 56.21 4.08 3.70 100.04 31.34 17.32 6.11 8.00 0.00 216391.59 2.00 106886.00 403513.00 162716.00 32434.00 168392.17 24.85 7.66 8.65 4.09 10.00 74391.30 25.00 139835.84 46.00 %BT 0.00 256465.00 12523.50 22.66 30.93 3.00 303.96 30.00 10.00 %BT 10.00 133146.15 54.00 593426.11 1.40 13.00 31.69 32.21 0.16 100.75 20.75 0.29 3.00 485720.00 160943.71 1.00 345678.00 243953.85 52.07 3.00 9.00 63.00 244844.00 0.41 15.00 12154.21 2.00 0.00 53235.00 256402.00 7.00 260917.00 224783.87 100.00 0.00 1052248.00 491246.00 182925.00 25102.00 35842.00 82455.00 271906.00 23816.00 29.26 0.82 24 .34 16.00 12961.55 16.08 2.00 26757.00 149332.49 1.00 82455.00 82455.23 23.46 1.37 31-Mar-07 82455.00 807643.01 31.BALANCE SHEET Balance Sheet 31-Mar-09 Equity Capital Preference Capital Share Capital Reserves and Surplus Loan Funds Current Liabilities Provisions Current Liabilities and Provisions Total Liabilities and Stockholders Equity (BT) Tangible Assets Net Intangible Assets Net Net Block Capital Work In Progress Net Fixed Assets Investments Inventories Accounts Receivable Cash and Cash Equivalents Other Current Assets Current Assets Loans & Advances 0.00 893880.00 55483.00 38902.99 3.
00 100.00 0.00 807643.00 893880.00 1052248.00 0.00 100.00 0.00 0.00 0.00 100.00 25 .Miscellaneous Expenditure Other Assets Total Assets (BT) 0.
Mar '06 12 mths
Mar '07 12 mths
Mar '08 12 mths
Mar '09 12 mths
Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses 26,318.60 175.70 26,142.90 2,897.90 0.00 29,040.80 25.00 16,497.10 1,137.50 705.10 353.20 247.20 -256.40 18,708.70 32,817.30 185.60 32,631.70 2,875.60 0.00 35,507.30 23.70 19,947.60 1,362.60 842.90 410.80 292.40 -418.40 22,461.60 37,302.4 0 211.40 37,091.0 0 3,119.70 0.00 40,210.7 0 26.80 22,160.7 0 2,229.30 920.00 389.80 368.20 -544.70 25,550.1 0 42,196.80 221.60 41,975.20 3,012.80 0.00 44,988.00 31.00 27,292.30 2,897.60 940.00 473.20 394.90 -637.40 31,391.60
Mar '06 12 mths Operating Profit PBDIT Interest PBDT 7,434.20 10,332.10 2,004.60 8,327.50
Mar '07 12 mths 10,170.10 13,045.70 2,055.70 10,990.00
Mar '08 12 mths 11,540.9 0 14,660.6 0 1,982.20 12,678.4 0
12 mths 10,583.60 13,596.40 28 1,737.00 11,859.40
30 0.20 1.28 0.50 32.90 10.00 21.39 2.50 0.70 31.40 157.10 2.50 21.00 0.40 24.70 3.80 0.70 0.20 26.28 1.40 145.00 46.00 11.70 30 .50 24.10 19.60 5.70 14.10 14.90 19.60 24.04 0.50 19.50 0.50 5.90 --- 0.50 19.70 25.50 20.00 2.00 20.80 --- 23.40 0.97 2.90 14.50 2.63 3.40 20.20 47.As on Return Related Return on Total Assets (%) Return on Networth (%) Return on Capital Employed (%) Profitability Gross Margin (%) Operating Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Asset Turnover(x) Leverage Debt/Equity ratio (x) Total Debt/Total Assets (x) Long term Debt/Networth (x) Interest Coverage (x) Liquidity Current Ratio (x) Quick Ratio (x) Cash Ratio (x) Working Capital Working Capital to Sales (x) Working Capital Days (days gross sales) Receivables (days gross sales) Creditors (days cost of sales) FG Inventory (days cost of sales) RM Inventory (days consumption) Cash Flow Indicator Operating Cash Flow/Sales (%) 31-Mar-09 31-Mar-08 31-Mar-07 8.50 32.00 61.20 2.70 2.19 3.72 2.40 146.50 14.40 29.50 --- 0.10 26.50 6.
61 16.95 12.90 3.80 9.86 10.2:1 COMPANY’S CURRENT RATIO TABLE:- Ratio Years Current Ratio Current Ratio Year 2008 216391/79299 2.30 3.05 13.16 -8.50 9.90 8.47 22.01 10.28:1 31 .20 (I) Liquidity Ratios 1.00 3.29 33.60 53.44 8.72:1 2009 243953/106886 2.52 -12.46 17. Its objective is to measure the ability of the firm to meet its short term obligations and to reflect the short term financial solvency of the firm.50 58.41 59.47 17.Per Share Book Value Per Share (Rs) Earnings Per Share (Rs) Dividend Per Share (Rs) Growth(%) Total Operating Income EBITDA EBIT Net Profit Total Assets 13. Current ratio:It establishes a relationship between current assets and current liabilities.08 25.67 14. FORMULA => CURRENT RATIO = CURRENT ASSETS CURRENT LIABILITIES IDEAL RATIO: .
5 2 .6 2 . As very high current ratio shows the idleness of the source or funds available at its disposal. 32 .4 2 .2 . This signifies that the company has better capacity to meet its liabilities or we can say that the company has enough resources to discharge its obligations.2 2 .3 2 .7 2 .8 2 .1 2 200 8 2009 R atios Comments As we can see in the above ratio table as well as in the graph the current ratio for the year 2009-10 have decreased as compared to current ratio for the year 2008-09 but yet it is slightly greater then 2:1. As ideal ratio is always 2:1.
FORMULA => CURRENT RATIO = LIQUID ASSET/QUICK ASSETS CURRENT LIABILITIES QUICK ASSET = CURRENT ASSET – STOCK PREPAID EXPENSES IDEAL RATIO: .2. Its objective is to measure the ability of the firm to meet its short term obligations. Quick Ratio It establishes a relationship between quick assets and current liabilities.97:1 33 .1:1 COMPANY’S CURRENT RATIO TABLE:- Ratio Years Quick Ratio Quick Ratio Year 2008 189634/79299 2.39:1 2009 211519/106886 1.
2009 have decreased as compared to the quick ratio for the previous year i.5 1 0.2. 34 .5 2 1. 1.e.e. As we know that the ideal ratio is 1:1 Even if the ratio has decreased but it still represents the good short term position of the company. 2009 but it is slightly greater than 1:1 i.5 0 R atio 2008 2009 Comments:As we can see in the above ratio as well as in the graph the quick ratio for the year.97:1.
434-0 Quick asset for the year 2009 = 2. 89. 16.519 35 .953-32. 43.434 Quick asset for the year 2009 = 2.391-26.957-0 Quick asset for the year 2008 = 1.WORKING NOTES Quick Assets = current assets – inventory – prepaid expenses Quick asset for the year 2008 = 2. 11.
19:1 36 . FORMULA => DEBT EQUITY RATIO:.II) Solvency Ratio:1. Its objective is to measure the relative proportion of debt and equity in financing the assets of a firm. Debt Equity Ratio:It establishes a relationship between long-term debts and shareholder’s funds.63:1 2009 181277/82454 2.DEBT EQUITY IDEAL RATIO:.2:1 COMPANY’S DEBT EQUITY RATIO TABLE:- Ratio Years Debt Equity Ratio Debt Equity Ratio Year 2008 134782/82454 1.
5 1 0.5 2 1. Now the firm will enjoy benefits of trading on equity but there will be a greater risk to the creditors.e.5 0 R atios 2008 2009 Comments:As we can see in the above ratio as well as in the graph the debt-equity ratio for the year.19 slightly impacts both the creditors and the firm. 37 . 2009 have decreased as compared to the debt equity ratio for the previous year i. 2008 As we know that the ideal ratio is 2:1 Therefore this increase in the debt equity ratio to 2.2.
It measures the extent to which the assets can cover the debt.28 2009 1052248/345678 3. Its objectives are to measure the safety margin available to the suppliers of long term debts.04 38 .2. Formula => Total Assets to Debt Ratio: Total Assets Long Term Debts Ideal Ratio: 2:1 Company Total Asset to Debt Ratio Table: Ratio Years Total Asset Debt Ratio Total Asset Debt Ratio Year 2008 893880/271906 3. Total Assets to Debt Ratio:Its establishes a relationship between total assets and long term debts.
04:1 implies that the company is using less equity then debt.1 3.3 3.3.e. that ideal ratio is 2:1.15 3. As we know. 39 .25 3.05 3 2. which means less safety margins for creditors. Therefore.2 3. this decrease in the total assets to debt equity ratio to 3. 2008.9 2008 2009 Ratio Comments:As we can see in the above ratio as well as in the graph the total assets to debt ratio for the year 2009 have slightly decreased as compared to total assets to debt ratio for the previous year i.95 2.
Proprietary Ratio:It measures a relationship between proprietors fund and total assets.3.68 40 .66 46. Formula => Proprietors Ratio: Proprietors Funds *100 Total Assets Ideal Ratio: Higher the ratio better uses of proprietors funds Company Proprietor’s Ratio Table: Ratio Years Proprietor’s Ratio Proprietor’s Ratio Year 2008 2009 443931*100/893880 491246*100/1052248 49. Its objectives are to measure how the proprietors have financed the assets.
there is some problem while using funds so the company has to take some decision unless their company will suffer.68% implies that the Proprietor’s Funds are not using properly i.50 49.5 47 46.e.5 46 45.5 49 48.5 48 47.5 45 2008 2009 R atio Comments:As we can see in the above ratio as well as in the graph the total Proprietor’s Ratio for the year 2009 have slightly decreased as compared to Proprietor’s Ratio for the previous year i.e. 2008. Therefore.. 41 . this decrease in the Proprietor’s Ratio to 46.
Company’s Capital Turnover Ratio Table:- Ratio Years Capital Turnover Ratio Year 2008 20 2009 24.Net Sales Capital Employed Ideal Ratio: Higher the ratio. Its objective is to measure the efficiency with which the capital employed is utilised. Formula => Capital Turnover Ratio: .III) Activity Ratio:1.9 42 . the more efficient the management and utilization of capital employed. Capital Turnover Ratio:It establishes a relationship between Net sales and Capital Employed.
9 times imply that the management is trying to work efficiently and capital employed has increased in the same proportion as the net sales increases. 2009 have increased as compared to the capital turnover ratio for the previous year i. That is why the ratio increases for the year 2009. the increase in the capital turnover ratio to 24.e. 43 .2008 Therefore.25 20 15 10 5 0 R atio 2008 2009 Comments:We can see in the above ratio as well as in the graph the capital turnover ratio for the year.
Company Fixed Assets Turnover Ratio Table:- Ratio Years Fixed Assets Turnover Ratio Year 2008 . Formula => Fixed Assets Turnover Ratio: .50 44 .Higher the Ratio. b. the more efficient the management and utilization of fixed assets and vice versa. Fixed Assets Turnover Ratio:a. Its objective is to determine the efficiency with which the fixed assets are utilised. I establish a relation between Net sales and fixed assets.Net Sales Net Fixed Operating Assets Ideal Ratio:.50 2009 .2.
3 0. Therefore.2 0.1 0 F ixedAss ets T urnover R atio 2008 2009 Comments:We can see in the above ratio as well as in the graph the fixed asset turnover ratio for the year 2008 has been the same to the fixed asset turnover ration for the year 2009.0.4 0. the no change in the fixed asset ratio implies that the company has not utilised nor over utilised its assets in efficient way. 45 .5 0.
Its objective is to determine the efficiency with which the working capital is utilised. Working Capital Turnover Ratio:a.40 2009 . This establish a relation between Net sales and working capital.3. Formula => Working Capital Turnover Ratio: . b. the more efficient the management and utilization of fixed assets and vice versa.40 46 . Company Working Capital Turnover Ratio Table:- Ratio Years Working Capital Turnover Ratio Year 2008 .Net Sales Working Capital Ideal Ratio: .Higher the Ratio.
25 0.15 0. This signifies that the company is not utilizing the working capital efficiency in the year 2009.3 0 . 47 .0.05 0 2 008 20 09 Ratio Comments:We can see in the above ratio as well as in the graph.4 0 .1 0 . the working capital turnover ratio in the year 2009 has not increased or decreased as compared to previous year i. 2008 working capital turnover ratios.2 0 .e.35 0.
the more efficient the management and utilization of fixed assets and vice versa.60 2009 14. Company Stock Turnover Ratio Table:- Ratio Years Stock Turnover Ratio Year 2008 14.50 48 . Formula => Stock Turnover Ratio: .Higher the Ratio.4. Its objective is to determine the efficiency with which the Inventory is utilised.Cost Of Goods Sold Average Inventory Ideal Ratio: . It establishes a relation between Cost of Goods Sold and Average Inventory. Stock Turnover Ratio:a. b.
the firm may incur hgh carrying costs.52 14. the stock turnover ratio in the year 2009has decreased as compared to the previous year i. obsolete inventory and due to this.54 1 4.5 1 4.50 times in the year 2009 might be due to inventory levels. 2008 stock turnover ratios.56 1 4.46 1 4.44 20 8 0 20 9 0 R atio Comments:We can see in the above ratio as well as in the graph.58 1 4. 49 .e. This decrease in stock turnover ratio to 14.6 1 4.14.48 1 4.
the more efficient the management Company Gross Profit Ratio Table:- Ratio Gross Profit Ratio 2008 32. Gross Profit Ratio:a. It measures a relation between Net sales and Gross Profit. Its objective is to determine the efficiency with which the production operation is carried out.90 50 .70 Year 2009 26. Formula => Gross Profit Ratio: . b.Higher the Ratio.(IV)Profitability Ratio A.Gross Profit * 100 Net Sales Ideal Ratio: . In relation To Sales 1.
35 30 25 20 15 10 5 0 2008 20 09 Ratio Comments:We can see in the above ratio as well as in the gross profit ratio in the year 2009 has decreased as a compared to previous year i. This decrease in the gross profit ratio in the year 2009 might be due to lower sales price with constant cost of goods sold.e. 51 . 2008 gross profit ratios.
00 Year 2009 19. Company Net Profit Ratio Table:- Ratio Net Profit Ratio 2008 20. Net Profit Ratio:a.50 52 .2. b.Net Profit after Tax * 100 Net Sales Ideal Ratio: . Its objective is to determine the overall profitability due to various factors.Higher the Ratio. the more efficient the capacity of the firm and the demand for the product is falling. Formula => Net Profit Ratio: .Net Profit before Tax * 100 Net Sales Net Profit Ratio: . It measures a relation between Net sales and Net Profit.
3 19.8 19.2 2008 2009 Ratio Comments:We can see in the above ratio as well as in the graph.9 19.4 19.e.6 19. 2008.5 19.20 19. Working Notes Here we are considering Net profit be equal to net profit before interest and tax.7 19. In Relation to Investment 53 . This decline in the net profit ratio indicates the cost of production is increasing and also expenses are increasing as a result there is a decline in the net profit so the company should try to reduce its expenses otherwise the company might have pay huge amount of money or might be shut down its operations for a while. B. the net profit ratio in the year 2009 have fall down drastically as compared to previous year i.
Return On Total Assets:a. Its objective is to find out how efficiently the total assets have been used by the management.3. b.Net Profit Before Interest and Tax *100 Total Assets Ideal Ratio: . the more efficient the management and utilisation of total assets.50 Year 2009 8. (Formula) Return On Total Assets: .Higher the Ratio. It measures a relation between Net Profit before interest and tax and total Assets.70 54 . Company Net Profit Ratio Table:- Ratio Net Profit Ratio 2008 11.
e.12 10 8 6 4 2 0 2008 2009 R atio Comments:We can see in the above ratio as well as in the graph. This decrease in the return on total assets to 1. the return on total assets in the year 2009 have decreased as compared to previous year i. 55 .87% in the current year implies that the management is not efficient enough and the assets are not utilized properly. 2008 return on total assets.
b.4. It measures a relation between Capital Employed and Net Profit before Interest and Tax. Its objective is to find out how efficiently the long term funds supplied by the creditors and shareholders have been used.Higher the Ratio.Net Profit before Interest and Tax * 100 Capital Employed Ideal Ratio: . Return On Capital Employed/ Return On Investment(ROI):a. Company’s Return on Investment Table:- Ratio Net Profit Ratio 2008 14.60 Year 2009 14. (Formula) Return on Investment: .50 56 . the more efficient the management and utilisation of capital employed.
6 1 .54 4 1 .56 4 1 . 2008 return on investment of 14.44 4 20 8 0 2 009 Ratio Comments:We can see in the above ratio as well as in the graph. 57 . the return on investment in the year 2009 have decreased as compared to previous year i.52 4 14.14.5 1 .60% This decrease in the return on investment implies that the management is not working efficiently and capital employed is not utilized at its fullest.46 4 1 .58 4 1 .48 4 1 .e.
60 Year 2009 14. Its objective is to find out how efficient the management and utilization of shareholder’s have been used.Higher the Ratio. It measures a relation between Shareholder’s Fund and Net Profit after Interest and Tax.50 58 . Company’s Return On Net Worth Table:- Ratio Return On Shareholder’s Fund 2008 14.Net Profit after Interest and Tax * 100 Shareholder’s Fund Ideal Ratio: . the more efficient the management and utilization of shareholders funds.5. Formula => Return on Net Worth: . b. Return On Shareholders Fund:a.
e.Comments:As we can see in the above ratio as well as in the graph. 2008 Return On shareholder’s Fund of 14.60 This change in the Return on shareholder’s Funds is a danger for the company as there is no proper utilization of shareholder’s funds. 59 . the return on shareholder’s Funds in the year 2009 have changed slightly as compared to previous year i.
Now again we see in the case of Quick Ratio that this year 2009 this ratio has declined to 1.2008 this high ratio slows down.Analysis 1. 3. 4.66% to 46. Proprietary Ratio of the company has declined from 49. 5. As a result we can say that now there is good margin for short term creditors.28:1 to 3.e.39:1 which is too high than the ideal ratio of 1:1.97:1 as compared to previous year having quick ratio to be equal to 2. So this makes the ratio as a satisfactory ratio. Company’s debt equity ratio has slightly increased from the previous year having ratio of 1.63:1 which makes ratio a safety margin for the creditors since the owner’s equity is treated as a margin of safety by creditors. Company’s Current ratio has declined from 2. As we can see in the profit and loss account the amount of debtors is the chief reason for the decline in this ratio. As in previous year the current ratio is too high which shows that the company has idle funds available at its pocket. 61 . This shows that company is on the path of using capital employed efficiently and the management is also becoming efficient.68% in the year 2009. But yet it is above ideal ratio of 2:1.00 to 24. Company’s Capital Turnover Ratio has increased from 20. 2.39 to 1. Now this is positive sign for the company. Company’s Total Assets to debt ratio has decreased from 3.97 in the year 2009. 6. But now in this year i. It means now the assets of the firm are not financed out of proprietor’s funds.04:1 which means less safety for short term as well as long term creditors as owner’s equity is treated as margin of safety by creditors.9 times in the year 2009.
50 times.50 times in 2009. 8. 13. 62 . 11. It means management didn’t become more efficient and firm has no ability to generate sales per rupee of working capital.70%. If there is decline it is due to excessive inventory levels. Decline in company’s return on net worth in the year 2009 is very low compared to 2008 which is 14. 50 times in 2008 and still . 9. 2009 return on total assets also decreases which is shows that the management is not utilizing the total assets efficiently. 12. This decline is also due to increase in house tax which reduces the net profit. It was . But in this year this goes down to 14. In the year 2009 company’s working capital ratio didn’t increase at all. As a result the firm may have to incur high carrying costs. There is no direct relationship between sales and fixed assets.60% declined. this shows that the capital employed is not utilized properly. In year 2008 company’s fixed turnover ratio did not changed at all. Due to this decline in the net profit ratio there is a danger for the company with regard to future adverse economic conditions. 10. In the year 2009 the company’s net profit ratio has declined as compared to net profit ratio in the year 2008 which is 20. Slow moving and obsolete inventory etc.7.00%. Due to decline in the net profit before interest and tax in the year 2009 return on investment also declines to 8. Due to decline in net profit ratio last year i.e. Company’s stock turnover Ratio didn’t move from .50% it shows that the management is not taking this issue as serious issue as a result inefficient utilisation of shareholder’s funds.
60 14459.40 13314.20 -2713.10 Mar '09 12 mths 9467.Cash Flow of NTPC Mar '06 12 mths Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents 6271.60 13314.80 -7500.70 -76.30 8471.10 Mar '10 12 mths 10807.40 -----------------.20 6206.60 1618. ------------------Mar '07 12 mths 8896.80 -6203.50 8065.50 64 .80 9688.70 -1099.40 10171.20 16271.60 -3145. Cr.40 14933.20 8471.20 1338.40 4843.70 -849.30 -2348.10 6078.30 Mar '08 12 mths 10529.30 -1908.60 -1812.10 16271.60 14933.60 10594.in Rs.40 -10497.60 2393.
Typical sources of cash inflow would be cash raised by selling stock and bonds or by bank borrowings. Watch out for a widening gap between a company's reported earnings and its cash flow from operating activities. Investors tend to prefer companies that produce a net positive cash flow from operating activities. Normally it's a good sign when it goes up. Cash Flows from Operating Activities This section shows how much cash comes from sales of the company's goods and services. High growth companies. less the amount of cash needed to make and sell those goods and services.The cash flow statement shows how much cash comes in and goes out of the company over the quarter or the year. as would dividend payments and common stock repurchases. Cash Flow From Financing Activities This section describes the goings-on of cash associated with outside financing activities. changes in cash flow from operations typically offer a preview of changes in net future income. tend to show negative cash flow from operations in their formative years. Likewise. The net income is higher than cash flow in year 2010. the company is speeding or slowing its booking of income or costs. At the same time. paying back a bank loan would show up as a use of cash flow. It also includes acquisitions of other businesses and monetary investments such as money market funds. such as new equipment or anything else that needed to keep the business going. such as technology firms. 65 . Cash Flows from Investing Activities This section largely reflects the amount of cash the company has spent on capital expenditures.
89 121394.00 82013.26 7291.07 0.04 21.Preference Dividend .00 31-Mar07(12) Rs mn 237.26 0.54 74148.00 26.73 106081.00 11582.00 208109.66 -0.00 17981.00 22.00 326335.00 5.07 8.78 0.00 -0.00 20229.Equity -1083.00 0.00 310.00 81944.00 0.54 74148.00 19806.61 30.03 21.00 0.00 25012.00 19289.36 24.00 19.00 5.82 7.85 2.00 19.07 0.15 115419.00 5.00 11908.00 1.00 26385.54 6.00 62.51 1.26 6.61 5255.00 -2745.00 5975.65 63.00 19.09 100.00 112880.00 7.00 %OI 0.88 7.35 80072.74 Rs mn 419765.79 27.52 94034.00 82013.00 94678.08 229985.00 7.00 0.77 4.00 19.07 0.00 3.00 19.00 28401.31-Mar09(12) Profit / Loss A/C Net Sales (OI) Material Cost Increase Decrease Inventories Personnel Expenses Manufacturing Expenses Gross Profit Administration Selling and Distribution Expenses EBITDA EBIT Interest Expense Other Income Pretax Income Provision for Tax Extra Ordinary and Prior Period Items Net Net Profit Adjusted Net Profit Dividend .00 5.85 7.00 32.00 105589.00 0.04 0.99 68647.00 28859.20 100.00 32963.00 0.00 28699.74 20754.00 281563.00 8.00 370936.00 %OI 100.90 6.00 25.00 29241.00 0.00 29683.00 25.56 105294.00 109.76 21385.96 31-Mar08(12) Rs mn 268.00 %OI 0.00 The income statement is basically the first financial statement you will come across in an annual report or quarterly Securities And Exchange 67 .99 68647.00 67.00 31.00 1.00 20427.00 28.07 0.63 4.12 100826.00 Depreciation Depletion and Amortisation 23645.77 32.39 88965.
The company have improved profitability by increasing sales revenue for the year 2009. and 68 . there is just a single number that represents all the money a company brought in during a specific time period. how much it spent (expenses)andthedifference between the two (profit) over a certain time period. Gross profit is calculated as revenue minus cost of sales. NET SALES Revenue. It also contains the numbers most often discussed when a company announces its results -numbers such as revenue. is generally the most straightforward part of the income statement.Expenses Profit. Often. there are several commonly used profit subcategories that tell investors how the company is performing. Cost of goods sold is the expense most directly involved in creating revenue. However. Profits = Revenue . Operating profit is equal to revenues minus the cost of sales and SG&A. earnings and earnings per share.Commission (SEC) filing. It represents the costs of producing or purchasing the goods or services sold by the company. the income statementshows how much money the company generated (revenue). Basically. EXPENSES There are many kinds of expenses. also commonly known as sales. although big companies sometimes break down revenue by business segment or geography. general and administrative expenses (SG&A). This number represents the profit a company made from its actual operations. but the two most common are the cost of goods sold (COGS) and selling. is equal to total revenue minus total expenses. most simply put.
Net income generally represents the company's profit after all expenses. Operating profit also gives investors an opportunity to do profit-margin comparisons between companies that do not issue a separate disclosure of their cost of goods sold figures (which are needed to do gross margin analysis). This number is often called the "bottom line" and is generally the figure people refer to when they use the word "profit" or "earnings". or that sales are increasing faster than operating costs. Operating profit measures how much cash the business throws off. including financial expenses. and some consider it a more reliable measure of profitability since it is harder to manipulate with accounting tricks than net earnings. 69 . have been paid.excludes certain expenses and revenues that may not be related to its central operations. High operating margins can mean the company has effective control of costs.
The company more and more achievement has made the company liable to show better improvement in the nest few years. This is due to high efficiency of the management of the company and resources have been utilized properly in this year 2009-10. Income statement.Conclusion After analyzing the Ratios. And the issue of making the company more indulge in social services and less focussing on profit making. So we can say that company is taking this issue of making the company more efficient and effective through proper management in the future. From the past 2 years there is an increase in the profit of the company NTPC Ltd. 71 . I came to the conclusion that NTPC (National Thermal Power Corporation) ltd. So overall company’s performance is satisfactory. Balance sheet. Cash Flows.
I. S.ntpc.com/financials/ntpc/balance-sheet/NTP http://money. Sultan Chand & Sons. SITES • • • • • http://www. 2003 Fourteenth Edition Bhattacharya.rediff.bseindia. 2003 Third Edition.. Vikas Publishing House.Bibliography BOOKS • • • Maheshwari.moneycontrol. 2003 Third Edition.com/companies/ntpc-ltd/15130025/balance-sheet 73 .com http://en.wikipedia. Pandey.K. Vikas Publishing House. & Dearden. S.M.N. Management Accounting. Accounting for Management – Text and Cases.co.in/ http://www.. Principles of Management Accounting.org/wiki/National_Thermal_Power_Corporation https://www.
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