Annexure-V- Cover Page for Academic Tasks

Course Code: ACC507 Course Name: FINANCIAL REPORTING, AND

ANALYSIS-II.
Course Instructor: Dr.Sachin Academic Task No. : 01

Academic Task Title: PEARL GLOBAL INDUSTRIES LTD

Date of Allotment 10-12-21 Date of submission: 20/12/2021
Student’s Roll no: B 3 9 Student’s Reg. no: 12112760
Evaluation Parameters: (Parameters on which student is to be evaluated- To be mentioned
by students as specified at the time of assigning the task by the instructor)

Declaration:

I declare that this Assignment is our work. I have not copied it from any other student’s
work or from any other source except where due acknowledgement is made explicitly in
the text, nor has any part been written for me by any other person.
Student’s Signature: gopal gupta Evaluator’scomments (For
Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator‟s Signature and Date:

Marks Obtained: Max. Marks: ………………………
 INTRODUCTION
PEARL worldwide INDUSTRIES LTD. (PGIL)
residence of Pearl fashions Ltd is a multinational equipped to put on garb production
conglomerate. The corporation is running in three wonderful commercial enterprise
streams particularly manufacturing marketing and Distribution and souring of clothes. in
addition they offer supply chain answers for the style enterprise globally along with
warehousing & distribution networks inside the uk & US. The organisation conducts their
commercial enterprise through their subsidiaries in India in addition to overseas. they're
having 15 subsidiaries that function in India US united kingdom Hong Kong Indonesia and
Bangladesh.The corporation product providing consists of various sorts of knits woven
sweaters and bottoms in the guys ladies and youngsters put on classes. they are servicing
eighty two stores across the globe with a healthy spread among u.s.a. Latin the usa &
Europe. some leading customers include hole JC Penney Banana Republic ASDA-Wal-Mart
Kohl's Esprit subsequent to call some. The employer has advertising and distribution
workplaces in united kingdom US and Hong Kong. those offices oversee the advertising and
marketing and merchandizing teams throughout Canada Europe Hong Kong uk and US. The
business enterprise has advanced their very own manufacturers DCC and Kool Hearts in US.
additionally they very own warehousing and processing devices in united kingdom and US
with a blended functionality to deal with two million garments per month. those
warehouses have processing centers and neighborhood distribution infrastructure. also the
agency has cloth development centres in China and India as well as design and product
development teams in India united kingdom US and Hong Kong.house of Pearl models Ltd
turned into integrated as a private limited organization under the call Minia Estates Pvt Ltd
on July five 1989. The call of the organization changed into changed to residence of Pearl
models Pvt Ltd on might also nine 2006. The agency became a public limited organisation of
June 28 2006
Company’s Profit and Loss Statement as on 31st March 2021.
 ▪ Fixed cost:

The term "fixed cost" refers to a cost that does not fluctuate as the amount of goods or
services produced or sold increases or decreases. Fixed costs are expenses that a
business must pay regardless of its specific business operations. As a result, fixed
expenses are typically indirect, as they do not apply to the creation of any goods or
services by a corporation. Companies often have two categories of costs: fixed and
variable costs, which add up to total costs. Shutdown points are frequently used to cut
fixed costs.

▪ Variable cost:

A variable cost is a business expense that fluctuates based on how much the
organization produces or sells. Variable costs rise or fall as a company's production or
sales volume increases or declines—they climb as output increases and fall as
production drops.

Fixed and variable cost of the company for FY 19-21 are as follow:
*Values are in Lakhs
In lac (Rs) In lac (Rs) In lac (Rs)
Variable cost 2021 2020 2019
Electricity & Power 1843 2318 2376
Oil, Fuel & Natural gas 0 0 0
Coals etc 0 0 0
Other power and fuels 0 0 0
Traveling and conveyance 545 1546 1462
Sales Commissions & Incentives 524 692 596
Other Selling Expenses 583 1356 1428
Other Manufacturing Expenses 17090 18992 20772
Selling and Distribution Expenses 4948 5974 6740
Sales Commissions & Incentives 524 692 596
Workmen and Staff Welfare Expenses 224 748 357

In lac (Rs) In lac (Rs) In lac (Rs)

Fixed cost 2021 2020 2019
rent,rates and taxes 381 922 2576
insurance 422 363 290
Depreciation 4411 4204 2589
Salaries, Wages & Bonus 30728 36676 33620
Contributions to EPF & Pension Funds 579 924 810
Repairs and Maintenance 949 1069 105
Interest 4745 5253 4254

*Values are in Lakhs

Cost sheet:
A cost sheet is a statement that lists the many components of a product's total cost and
compares them to previous statistics. The cost sheet can be used to determine a product's
ideal selling price.
A cost sheet document can be created either with historical expenses or with predicted
costs. Based on the actual cost of a product, a historical cost sheet is created. An estimated
cost sheet, on the other hand, is created right before production begins and is based on
estimated costs.
Prime cost:
Direct materials, direct wages, and direct expenses are included in this category. It's also
known as the first cost, basic cost, or flat cost. It can be described as the sum of the cost of
the material consumed, the cost of labour, and the cost of direct charges.
Direct material + Direct Wages + Direct Expenses = Prime Cost
The cost of raw materials utilised or consumed within a certain period is known as direct
material cost. You add the initial stock and the amount of material purchased, then subtract
the closing stock to get the amount of raw material actually consumed within a particular
period. The following is the formula for calculating the amount of material consumed:
Material consumed = Material purchased + Opening stock of material – Closing stock of
material
Factory cost:
This covers indirect salaries, indirect material, and indirect expenses, as well as prime cost +
manufacturing overhead. Works cost, production cost, and manufacturing cost are all terms
used to describe the cost of a factory.
Factory cost = Prime cost + Factory overhead
Office cost:
This is also known as the overall cost of production or administrative cost. The cost of the
office is equivalent to the cost of the manufacturing plus office and administrative
overhead.
Total cost or cost of sales:
The whole cost of production plus the total cost of selling and distribution overhead equals
this figure.
Total cost = Cost of goods sold + Selling and distribution overhead
COST SHEET
Amount 2021 Amount 2020 Amount
Particulars
(in lac) (in lac) 2019(in lac)

opening stock of raw martial 12246 10670 10586

Add: Other Direct Purchases /
Brought in cost 9338 5210 12955
Add: purchase of raw materials 69162 77779 76040
less: Closing Raw Materials 13670 12246 10518
Raw materials consumed 77076 81413 89063
Prime cost
add: factory overheads
Electricity & Power 1843 2318 2376
Oil, Fuel & Natural gas 0 0 0
Coals etc. 0 0 0
Other power and fuels 0 0 0
add: opening stock of WIP 12,212.16 10,652.01 6299.74
less: Closing stock of WIP 9,637.71 12,212.16 10652.01
work cost 4,417.45 757.85 -1976.27
add: office and administration
overheads.
rent, rates and taxes 381 922 2576
insurance 422 363 290
professional and legal fee 3894 6203 5048
Traveling and conveyance 545 1546 1462
Other Administration 1021 2095 1949
Cost of production 6263 11129 11325
add: opening stock of finished goods 1,072.32 1,283.14 3296.54
less: Closing stock of finished goods 2,412.60 1,072.32 1283.14
Cost of goods sold -1,340.28 210.82 2013.4
add: Selling and Distribution
Expenses
Sales Commissions & Incentives 524 692 596
Freight and forwarding 3841 3926 4715
Other Selling Expenses 583 1356 1428
Cost of sales/total cost 86,416.17 99,484.67 107164.13
profit 4281 7397 9160
Sales 90,697.17 106,881.67 116324.13
*Values are in Lakhs
 ➢ PV ratio:

The Profit Volume (P/V) Ratio is a measurement of the profit rate of change as a function of
sales volume. It's one of the most essential ratios for calculating profitability because it
shows the contribution made in relation to sales.

FORMULA FOR PV RATIO= CONTRIBUTION/SALES*100

CONTRIBUTION=Sales-Total variable cost

For Year 2020: For Year 2021:

Sales = 106,881.67 Sales = 90,697.17
Total variable cost = 32318 Total variable cost = 26281
Contribution = 74,563.67 Contribution= 64,416.17
PV ratio = 74,563.67/106,881.67*100 PV ratio = 64,416.17/90,697.17*100
PV ratio = 69.76% PV ratio = 71.02%
*Values are in Lakhs

➢ Break-even point

The break-even point is the moment at which total cost and total income are equal,
indicating that your small firm is not losing money. In other words, you've reached the point
in manufacturing where the expenses of production are equal to the product's profits.
 FORMULA FOR BREAKEVEN POINT= Fixed cost / PV Ratio

For year 2020: For year 2021:

Fixed cost = 49411 Fixed cost = 42215
PV ratio = 69.76% PV ratio = 71.02%
Break-even point = 708.29 Break-even point = 594.41
*Values are in Lakhs

➢ Margin of safety:

Margin of safety is an investing idea that states that an investor should only buy securities if
their market price is much lower than their true worth. In other words, the margin of safety
is the gap between the market price of a security and your estimate of its intrinsic value.
Because investors can define a margin of safety based on their risk choices, buying
securities when this gap exists allows for a low-risk investment.
In accounting, the margin of safety, often known as the safety margin, is the gap between
actual and break-even sales. Managers can use the margin of safety to figure out how much
sales can drop before the company or project loses money.

FORMULA FOR MOS= Actual Sales- Break Even Point

For year 2020; - For year 2021; -

Actual sales = 106,881.67 Actual sales = 90,697.17
Break-even point = 708.29 Break-even point = 594.41
Margin of safety = 106173.38 Margin of safety =90102.76
*Values are in Lakhs
 REFERENCES

1) https://www.financialexpress.com/market/stock-market/pearl-global-industries-ltd-
stock-price/financials-profit-and-loss/
2) https://stocko.financialexpress.com/market/stock-market/pearl-global-industries-
ltd-stock-price/financials-profit-and-loss
3) https://www.moneycontrol.com/financials/pearlglobalindustries/profit-
lossVI/HPF01#HPF01
4) https://pearlglobal.com/financials/