NATIONAL LAW UNIVERISTY, ODISHA

SUBJECT –CORPORATE ACCOUNTING

TOPIC – ‘BRITANNIA INDUSTRIES LTD’

Submitted to: Submitted by:

CA. A.B. Debasis Rout 1. Mansi Indurkar (2018bba028)

b 2. Tanushka Joshi (2018bba058)

 Acknowledgement

At the onset, we would like to express their earnest gratefulness and thank our mentor Mr. A.B.
Debasis Rout for instilling confidence in them and entrusting the task to carry out a project on
this topic. We are indeed privileged having being groomed in a prestigious institution like
National Law University Odisha, Cuttack. We would also like to express their gratitude to their
friends for their support and help. Our gratitude also goes out to the staff and administration of
National Law University Odisha, Cuttack for the library infrastructure and IT lab that was a
source of great help for the completion of this project
 FINANCIAL STATEMENT 2018-19

1) CURRENT RATIO 2018 2019

(a) CURRENT ASSESTS
Inventories 594.58 718.89
Financial asset:
Investments 735.48 594.7
Trade receivables 230.32 350.96
Cash and cash equivalents 88.91 24.73
Bank balance other than (iii) above 8.34 15.75
Loans receivable assets 820.41 1121.41
Other financial assets 98.51 119.54
Other current assets 190.97 124.29
TOTAL CURRENT ASSETS 2767.52 3070.27
(b) CURRENT LIABILITIES
Financial liabilities:
Trade payables 866.36 1032.52
Borrowings 9.01 -
Other financial liabilities 182.62 205.17
Other current liabilities 82.05 84.83
Governments grants 0.71 0.71
Provisions 171.05 188.52
Current tax liabilities, (net) 54.23 70.59
TOTAL CURRENT LIABILITIES 1366.03 1582.34
CURRENT RATIO (a/b) 2.025958434 1.9403352
COMMENT Since there has been a fall in the current ratio and
in the year 2019 it is less than 2:1, this indicates
that there is lack of liquidity and shortage of
working capital. Though the fall is not much
significant.

2) ASSETS TO DEBT RATIO 2018 2019

(a) TOTAL ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1008.31 1283.85
Capital WIP 200.28 64.91
Investment property 14.99 64.91
Intangible assets 7.97 7.62
Financial assets:
Investment 450.65 1050.97
Loan receivable 86.74 15.55
Other financial assets - 1
 Deferred tax assets (net) 8.68 29.52
Income- tax assets (net) 14.07 93.15
Other non-current assets 68.09 2582.7
TOTAL NON-CURRENT ASSETS 1859.78 718.89
CURRENT ASSESTS
Inventories 594.58 718.89
Financial asset:
Investments 735.48 594.7
Trade receivables 230.32 350.96
Cash and cash equivalents 88.91 24.73
Bank balance other than (iii) above 8.34 15.75
Loans receivable assets 820.41 1121.41
Other financial assets 98.51 119.54
Other current assets 190.97 124.29
TOTAL CURRENT ASSETS 2767.52 3070.27
TOTAL ASSETS 4627.3 5652.97
(b) NON-CURRENT LIABILITIES
Financial liabilities :
Borrowings 0.3 0.26
Other financial liabilities 24.97 27.03
Deferred tax liabilities (net) 3.87
Government grants 0.72
LONG TERM DEBT 25.99 31.16
TOTAL ASSETS TO DEBT RATIO (a/b) 178.0415544 181.4175225
COMMENT The ratio is sufficiently high and indicates
that there is use of lower debts in financing
the assets which means a larger safety margin
for lenders.
3) QUICK RATIO 2018 2019
(a) LIQUID ASSETS
Financial asset:
Investments 735.48 594.7
Trade receivables 230.32 350.96
Cash and cash equivalents 88.91 24.73
Bank balance other than (iii) above 8.34 15.75
Loans receivable assets 820.41 1121.41
Other financial assets 98.51 119.54
Other current assets 190.97 124.29
TOTAL LIQUID ASSETS 2172.94 2351.38
(b) CURRENT LIABILITIES
Financial liabilities:
Trade payables 866.36 1032.52
Borrowings 9.01 -
Other financial liabilities 182.62 205.17
Other current liabilities 82.05 84.83
Governments grants 0.71 0.71
Provisions 171.05 188.52
Current tax liabilities, (net) 54.23 70.59
TOTAL CURRENT LIABILITIES 1366.03 1582.34
QUICK RATIO (a/b) 1.59069713 1.486014384
COMMENT Ideal liquid ratio is 1:1. Though here, there is
a decrease in the ratio but it is still higher than
1 which shows that business possess a good
safety margin to meet its current liabilities
debts.
4) PROPREITORY RATIO 2018 2019
(a) TOTAL EQUITY
Equity share capital 24.01 24.03
Other Equity 3211.27 4015.42
TOTAL EQUITY 3235.28 4039.45
(b) TOTAL ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1008.31 1283.85
Capital WIP 200.28 64.91
Investment property 14.99 64.91
Intangible assets 7.97 7.62
Financial assets:
Investment 450.65 1050.97
Loan receivable 86.74 15.55
Other financial assets - 1
Deferred tax assets (net) 8.68 29.52
Income- tax assets (net) 14.07 93.15
Other non-current assets 68.09 2582.7
TOTAL NON-CURRENT ASSETS 1859.78 718.89
CURRENT ASSESTS
Inventories 594.58 718.89
Financial asset:
Investments 735.48 594.7
Trade receivables 230.32 350.96
Cash and cash equivalents 88.91 24.73
Bank balance other than (iii) above 8.34 15.75
Loans receivable assets 820.41 1121.41
Other financial assets 98.51 119.54
Other current assets 190.97 124.29
TOTAL CURRENT ASSETS 2767.52 3070.27
TOTAL ASSETS 4627.3 5652.97
PROPREITORY RATIO (a/b) 0.699172304 0.714571278
COMMENT Here, this ratio indicates that for the year 2019
almost 71% of the total assets are funded by
equity which shows that the long term
financial position of the company is very
sound. The increase in the ratio is always a
good indicator for long term financial safety
of the business.
5) DEBT TO EQUITY RATIO 2018 2019
LONG TERM DEBT
NON-CURRENT LIABILITIES
Financial liabilities :
Borrowings 0.3 0.26
Other financial liabilities 24.97 27.03
Deferred tax liabilities (net) 3.87
Government grants 0.72
LONG TERM DEBT 25.99 31.16
TOTAL ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1008.31 1283.85
 Capital WIP 200.28 64.91
Investment property 14.99 64.91
Intangible assets 7.97 7.62
Financial assets:
Investment 450.65 1050.97
Loan receivable 86.74 15.55
Other financial assets - 1
Deferred tax assets (net) 8.68 29.52
Income- tax assets (net) 14.07 93.15
Other non-current assets 68.09 2582.7
TOTAL NON-CURRENT ASSETS 1859.78 718.89
CURRENT ASSESTS
Inventories 594.58 718.89
Financial asset:
Investments 735.48 594.7
Trade receivables 230.32 350.96
Cash and cash equivalents 88.91 24.73
Bank balance other than (iii) above 8.34 15.75
Loans receivable assets 820.41 1121.41
Other financial assets 98.51 119.54
Other current assets 190.97 124.29
TOTAL CURRENT ASSETS 2767.52 3070.27
TOTAL ASSETS 4627.3 5652.97
CURRENT LIABILITIES
Financial liabilities:
Trade payables 866.36 1032.52
Borrowings 9.01 -
Other financial liabilities 182.62 205.17
Other current liabilities 82.05 84.83
Governments grants 0.71 0.71
Provisions 171.05 188.52
Current tax liabilities, (net) 54.23 70.59
TOTAL CURRENT LIABILITIES 1366.03 1582.34
DEBT TO EQUITY RATIO : LONG 0.008033308 0.007713883
TERM DEBT / SHAREHOLDER’S FUND
Shareholder’s Fund: Noncurrent assets + 3235.28 4039.47
Working Capital – Noncurrent Liabilities
Working capital: Current assets – Current 1401.49 1487.93
Liabilities
COMMENT This ratio indicates the relationship between
the long term debt and shareholder's fund.
Here there is fall in the ratio which shows that
there is sufficient protection to the long term
lenders.A high debt to equity ratio is a danger
signal for the long term lenders.
6) INVENTORY TURNOVER RATIO 2018 2019
REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9282.04 10389.49
EXPENSES
Cost of materials consumed 4405.17 4944.77
Excise duty 76.11 -
Purchases of stock-in-trade 1372.46 1381.88
Other expense 1825.26 2221.05
Employee benefits expense 294.87 321.64
Finance Cost 1.45 1.54
Depreciation and amortization expense 119.76 135
Change in inventories in finished goods 4.18 49.02
TOTAL EXPENSES 8090.9 8956.86
GROSS PROFIT 1445.2 1716.11
COST OF MATERIALS CONSUMED
Opening stock 336.47 332.29
Closing Stock 332.29 403.71
Purchases 4400.99 5016.19
4737.46 5348.48
INVENTORY TURNOVER RATIO: Cost of 23.43692805 23.56896739
goods sold / Average Inventory
Cost of goods sold: Revenue From Operation – 7836.84 8673.38
Gross Profit
Average inventory: Opening Stock – Closing 334.38 368
Stock
COMMENT Here there is an increase in the Inventory
Turnover Ratio which indicates that inventory is
being sold more quickly. This shows that even if
goods are sold at low profit margin rate, the
business will still be able to make enough profit.
7) ASSET TURNOVER RATIO 2018 2019
(a) REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9673.42 10914.28
Customer Loyalty programme 5.87 1.38
Stock returns 80.14 99.83
Trade discount, promotions 317.11 426.35
NET SALES 9282.04 10389.49
(b) TOTAL ASSETS
NON-CURRENT ASSETS
Property, plant and equipment 1008.31 1283.85
Capital WIP 200.28 64.91
Investment property 14.99 64.91
Intangible assets 7.97 7.62
Financial assets:
Investment 450.65 1050.97
Loan receivable 86.74 15.55
Other financial assets - 1
Deferred tax assets (net) 8.68 29.52
Income- tax assets (net) 14.07 93.15
Other non-current assets 68.09 2582.7
TOTAL NON-CURRENT ASSETS 1859.78 718.89
CURRENT ASSESTS
Inventories 594.58 718.89
Financial asset:
Investments 735.48 594.7
Trade receivables 230.32 350.96
Cash and cash equivalents 88.91 24.73
Bank balance other than (iii) above 8.34 15.75
Loans receivable assets 820.41 1121.41
Other financial assets 98.51 119.54
Other current assets 190.97 124.29
TOTAL CURRENT ASSETS 2767.52 3070.27
TOTAL ASSETS 4627.3 5652.97
ASSET TURNOVER RATIO (a/b) 2.005930024 1.837879911
COMMENT This ratio measures the value of the sales
relative to its assets. There is a fall in the ratio
from the previous year which indicates that there
has been a fall in the efficiency of the company
by which it uses its assets to generate revenue.
8) WORKING CAPITAL TURNOVER RATIO 2018 2019
(a) REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9673.42 10914.28
Customer Loyalty programme 5.87 1.38
Stock returns 80.14 99.83
Trade discount, promotions 317.11 426.35
NET SALES 9282.04 10389.49
(b) WORKING CAPITAL 1401.49 1487.93
WORKING CAPITAL TURNOVER RATIO 6.622979829 6.982505897
(a/b)
COMMENT This ratio shows the number of times working
capital has been rotated in producing Revenue
from Operations. A high working capital
turnover ratio shows that the working capital is
being used efficiently however a very high ratio
is not a good sign. Here there is a negligible fall
in the ratio and the ratio is not too high and not
too low. Thus, the working capital is being used
efficiently.

9) GROSS PROFIT RATIO 2018 2019

REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9673.42 10914.28
Customer Loyalty programme 5.87 1.38
Stock returns 80.14 99.83
Trade discount, promotions 317.11 426.35
(a) NET SALES 9282.04 10389.49
(b) GROSS PROFIT 1445.2 1716.11
GROSS PROFIT RATIO (a/b)*100 15.56985318 16.51776605
COMMENT Here there is an increase in gross profit which
indicates that there is an increase in sale of more
profitable goods. This also indicates that selling
prices might have gone up but there was no
equivalent or significant increase in the other
direct charges like price of raw material.
10) NET PROFIT RATIO 2018 2019
(a) NET PROFIT 947.89 1122.2
REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9673.42 10914.28
Customer Loyalty programme 5.87 1.38
Stock returns 80.14 99.83
Trade discount, promotions 317.11 426.35
(b) NET SALES 9282.04 10389.49
NET PROFIT RATIO (a/b)*100 10.212087 10.80131056
COMMENT An increase in the ratio over the previous year
shows improvement in the overall efficiency
and profitability of the business. This shows
increase in overall efficiency of the business
operations.

11) OPERATING RATIO 2018 2019

(a) COST OF GOODS SOLD 7836.84 8673.38

(b) OPERATING EXPENSE

Advertising and sales promotion 345.45 437.92
Carriage, freight and distribution 467.69 533.1
TOTAL OPERATING EXPENSE 813.14 971.02
REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9673.42 10914.28
Customer Loyalty programme 5.87 1.38
Stock returns 80.14 99.83
Trade discount, promotions 317.11 426.35
(c ) NET SALES 9282.04 10389.49
OPERATING RATIO (a+b)/c*100 93.19050554 92.828515
COMMENT This ratio is a measurement of the efficiency and
profitability of the business. Here there is fall in
the ratio from the previous year, which shows
that the margin of profit is higher on Revenue
from Operations than the previous year.
12) DEBTORS TURNOVER RATIO 2018 2019
Assumption all sales are credit sale
REVENUE FROM OPERATIONS
Sale of goods/Income from operations 9673.42 10914.28
Customer Loyalty programme 5.87 1.38
Stock returns 80.14 99.83
Trade discount, promotions 317.11 426.35
(a) NET SALES 9282.04 10389.49
(b) Trade receivables 230.32 350.96
DEBTORS TURNOVER RATIO (a/b) 40.30062522 29.60303168
COMMENT Here there is a significant drop in the Debtor
Turnover Ratio which indicates that credit sales
has been made to such customers who do are not
much credit worthy and thus the rate at which
the amount is being collected is very low.

13) CREDITORS TURNOVER RATIO 2018 2019

(a) EXPENSES
Purchases of stock-in-trade 1372.46 1381.88
(b) CURRENT LIABILITIES
Trade payables 866.36 1032.52
CREDITORS TURNOVER RATIO (a/b) 0.631246084 1.338356642
COMMENT Here, there is an increase in the creditor turnover
ratio which indicates that the trade payables are
being paid more quickly than the previous year.
This also indicates increase in credit worthiness
of the business.
14) EARNING YIELD 2018 2019
(a) EARNING PER SHARE 39.48 46.71
(b) MARKET VALUE OF SHARE 2499 3092
EARNING YIELD (a/b)*100 1.579831933 1.510672704
COMMENT This indicates the percentage of how much a
company earned per share. This yield mainly is
used by many investment managers to determine
optimal asset allocations and determine which
assets seem overpriced or underpriced. The
current ratio of the company shows the safe and
sound position of its business.

14) RETURN ON CAPITAL EMPOLYED 2018 2019

(a) NET PROFIT BEFORE TAX 1445.2 1716.11
NON CURRENT ASSET 4777.3 5553.11
WORKING CAPITAL 1401.49 1487.93
(b) CAPITAL EMPOLYED 6178.79 7041.04
RETURN ON CAPITAL EMPOLYED 23.3896928 24.37296195
(a/b)*100
COMMENT This ratio is the barometer of overall
performance of the business. There is a fall in
the ratio, though it is not significant, so it is safe
to say that overall business's performance is
good enough for its survival with reasonable
profits