PROJECT REPORT

ON

COMPARATIVE ANALYSIS OF FINANCIAL PERFORMANCE

OF ZOMATO : A RATIO ANALYSIS APPROACH

SUBMITTED TO: SUBMITTED BY:

Dr. NANDAN VELANKAR SUDHANSHU JEEVTANI
MAHIMA RAMEJA
RITIN BHATIYANI
SAKSHI SADANA
(MBA B) SEM 1

Prestige Institute of Management and Research, Gwalior

Opposite Deen Dayal Nagar, Bhind Road, Gwalior
S.N. Content Page No:

1 Introduction: Company Profile

2 Objective/s of the Study

3 Methodology:
Brief discussion of Ratios used (Why specific ratio is used?)

3 Analysis on the basis of:

a. Liquidity Position
b. Profitability Position
c. Activity Position
d. Solvency Position
5 Remarks of Group on Current Status of Company

6 References (APA 6 Format)

7 Annexures

DECLARATION
We, Sudhanshu Jeevtani, Mahima Rameja, Ritin Bhatiyani , Sakshi Sadana students of MBA 1st
Semester of Prestige Institute of Management and Research Gwalior, hereby declare that the
Project Report entitled “Comparative Analysis of Financial Performance of ZOMATO: A
Ratio Analysis Approach” is submitted by us in the line of partial fulfillment of case study
component for Accounting for Managers subject of the Masters of Business Administration
Degree.

We assure that this project report is the result of our own efforts and that any other institute for
the award of any degree or diploma has not submitted it.

Date: Name and Signature of Student/s

Place
 CERTIFICATE

This is to certify that Sudhanshu Jeevtani, Mahima Rameja , Ritin Bhatiyani , Sakshi
Sadana Student/s of MBA I Semester- B of Prestige Institute of Management and Research,
Gwalior have successfully completed this Project Report of Accounting for Managers subject.
They have prepared this report entitled under my direct supervision and guidance.

Dr. NANDAN VELANKAR

(Project Guide)
 INTRODUCTION OF COMPANY
(ZOMATO)

Founded in 2008, Zomato is a leading platform for restaurant search & discovery, online food
ordering, and restaurant table reservations.
The company was founded by Deepinder Goyal and
Pankaj Chaddah and is headquartered in Gurgaon (officially Gurugram).
Zomato has been a pioneer in food ordering and restaurant discovery in India,
which has benefitted both restaurants and customers. Featuring a robust
review system, Zomato allows foodies to find the best meals and restaurants in their
neighborhood. A notable aspect about Zomato is that it is among the few companies that have
gone global after starting operations in India. Zomato currently features more than 1 million
restaurants globally on its platform.

History:
The story of Zomato started when the founders noticed that people did not even knew the
restaurants that were functional in their neighborhood. The founders thought that it would be a
great idea to list all the restaurants on the web and provide their menus as well. This idea
eventually led to the launch of FoodieBay in 2008. The startup initially catered to the Delhi-NCR
region and after the service gained popularity, the founders decided to implement the idea across
the country. The founders decided to go for a rebranding exercise, which led to the
transformation of FoodieBay into Zomato in 2010. Since then, Zomato has expanded operations
to several new locations in the country. It has also launched international operations and now
covers more than 10,000 locations across 24 countries globally. Millions of people across the
globe use Zomato every day to find the best places to dine in their neighborhood.

Funding:
Zomato has received investments worth $443.8 million through 10 rounds of funding. Top
investors include Ant Financial, Sequoia Capital, Temasek Holdings, Info Edge, and Vy Capital.

Acquisitions:
Zomato has acquired several companies over the years; with the most notable being the
acquisition of US based Urbanspoon in 2015. Other acquisitions made by Zomato include
Obedovat, Menu Mania, Lunchtime, MapleGraph, Sparse Labs, Gastronauci, NexTable,
Cibando, Mekanist, and Runnr.

Competition:
Zomato competes with other restaurant discovery and food delivery platforms such as Swiggy ,
Dineout, Grubhub, Yelp, DoorDash, JustDial, etc
.
About the Founders:
Zomato was founded by Deepinder Goyal and Pankaj Chaddah, both of whom are from IIT,
Delhi. Deepinder Goyal currently serves as the Chief Executive Officer (CEO) at Zomato. Prior
to launching Zomato, he used to work at Bain & Company as a Senior Associate Consultant.
Pankaj Chaddah is the co-founder and prior to launching Zomato, he had worked at Bain &
Company as a Senior Analyst and Associate Consultant
 OBJECTIVES OF THE STUDY

The major objectives of the resent study are to know about financial strengths and
weakness of ZOMATO through FINANCIAL RATIO ANALYSIS.

The main objectives of resent study aimed as:

To evaluate the performance of the company by using ratios as a yardstick to

measure the efficiency of the company. To understand the liquidity, profitability and efficiency
positions of the company during the study period. To evaluate and analyze various facts of the
financial performance of the company. To make comparisons between the ratios during different
periods.

OBJECTIVES

1. To study the present financial system at ZOMATO

2. To determine the Profitability, Liquidity Ratios.

3. To analyze the capital structure of the company with the help of  Leverage   ratio.

4. To offer appropriate suggestions for the better performance of the organization

 METHODOLOGY

The information is collected through secondary sources during the project. That information was
utilized for calculating performance evaluation and based on that, interpretations were made.

Sources of secondary data:

1. Most of the calculations are made on the financial statements of the company provided
statements.

2. Referring standard texts and referred books collected some of the information regarding
theoretical aspects.

3. Method- to assess the performance of the company method of observation of the work in
finance department in followed.
 Introduction of Ratio Analysis

Meaning:
An analysis of financial statements with the help of ratio may be termed as ratio analysis. The
ratio analysis is a very powerful analytical tool useful for measuring performance of a business
enterprise. Thus, ratio analysis implies the process of computing, determining and presenting the
relationship of terms and group of items in the financial statement.

Types and Application of Ratio analysis:

Current Ratio
or Working
capital Ratio

Liquidity
Ratio

Quick Ratio
or Liquid
Ratio or Acid
Test ratio

I. LIQUIDITY RATIO

(1) Current Ratio

Meaning: Current ratio shows the relationship between current assets and current
liabilities. It is calculated by dividing current assets by current liabilities on a particular
date.

Formula: Current Ratio= Current Assets

Current Liabilities

Factors : The two terms used to calculate the ratio have been explained as under:

(a) Current Assets

Current assets are those which will normally convert themselves into cash within one
accounting year. Current assets include Current Investments (i.e. Short-term
investments, Marketable securities etc.) + Inventories (i.e. Raw material, Work-in-
progress, Stock of finished goods) + Trade Receivables (i.e. Debtors and Bills Receivables
less provision) + Cash and Cash Equivalents (i.e. Cash in hand, Cash at bank, Cheques,
Drafts on hand etc.) + Short-term loans and Advances + Other Current Assets (i.e.
prepaid expenses + accrued incomes + advance payment of tax)

Note: (1) Inventories excludes stores and spares and Loose Tools.

(2) Trade receivables are taken after deducting provisions for doubtful debts.

(b) Current Liabilities

These include those liabilities which are likely to be paid within one accounting year.
Current liabilities includes, Short-term borrowings (i.e. Bank overdraft, Cash credit,
Short-term loan from bank etc.) + Trade payables (i.e. Creditors and Bills payable) + Other
current liabilities (i.e. Outstanding expenses, Income received in advance, Unpaid or
unclaimed dividends, Interest accrued and due/not due on borrowings, Calls-in-
advance and interest thereon etc.) + Short-term provisions (i.e. Provision for tax,
Proposed dividend etc.)

Objective The objective of calculating current ratio is to access the ability of the
enterprise to meet the short-term obligations promptly.

Significance: Current ratio of 2 1 is generally considered to be acceptable. If the

current ratio is more than 2:1, it is beneficial to the short-term creditors. If the current
ratio is less than 2:1, it indicates lack of liquidity and shortage of working capital.

Note: Increase in current assets means increase in current ratio.

Decrease in current assets means decrease in current ratio.

Increase in current liabilities means decrease in current ratio.

Decrease in current liabilities means increase in current ratio.

(2) Quick Ratio or Liquid Ratio or Acid Test Ratio

Meaning: Quick ratio is the relationship between liquid assets and current liabilities.
Quick ratio is computed by dividing liquid assets (or quick assets) by current liabilities.

Formula:

Quick Ratio or Liquid Ratio or Acid Ratio = Liquid Ratio /Quick Assets

Current liability

Factors: The two items used to calculate the ratio have been discussed as under:
 (a) Liquid Assets: The term liquid assets imply all Current Assets — Inventories —
Other Current Assets (i.e. Prepaid Expenses + Payment of Advance Tax)

(b)Current Liabilities : It refers the same meaning as used in current ratio.

Objective: The objective of calculating quick ratio is to ascertain the short-term liquidity
position of the enterprise. As liquidity implies the ability to convert current assets into
cash.

Significance: Generally, a quick ratio of 1:1 or more is considered to be good for the reason
that it indicates availability of funds to meet the liabilities 100%.

Note: 1. Increase in quick assets means increase in quick ratio.

2. Decrease in quick assets means decrease in quick ratio.

3. Increase in current liabilities means decrease in quick ratio.

4. Decrease in current liabilities means increase in quick ratio.

(3.) Cash Ratio

Meaning: The cash ratio is a measure of the liquidity of a firm, namely the ratio of the total
assets and cash equivalents of a firm to its current liabilities. The metric calculates the ability of
a company to repay its short-term debt with cash or near-cash resources, such as securities
which are easily marketable.

Formula: Cash Ratio = Cash & Cash equivalents / Current Liabilities

 Debt Equity
Ratio

Total Asset
to Debt
Solvency Proprietary
Ratio
Ratio
Ratio

Intrest
Coverage
Ratio

II. SOLVENCY RATIOS

Solvency ratios are a key component of the financial analysis which helps in determining
whether a company has sufficient cash flow to manage the debt obligations that are due.
Solvency ratios are also known as leverage ratios. It is believed that if a company has a low
solvency ratio, it is more at the risk of not being able to fulfil its debt obligation and is likely to
default in debt repayment.

Solvency ratios are used by prospective business lenders to determine the solvency state of a
business. Companies that have a higher solvency ratio are deemed more likely to meet the debt
obligations while companies with a lower solvency ratio are more likely to pose a risk for the
banks and creditors. Solvency ratios vary with the type of industry, but as a good measure a
solvency ratio of 0.5 is always considered as a good number to have.

Solvency ratios should not be confused with liquidity ratios. They are totally different. Liquidity
ratios determine the capability of a business to manage its short-term liabilities while the
solvency ratios are used to measure a company’s ability to pay long-term debts.
Types of Solvency Ratios

1. Debt to equity ratio

Debt to equity is one of the most used debt solvency ratios. It is also represented as D/E
ratio. Debt to equity ratio is calculated by dividing a company’s total liabilities with the
shareholder’s equity. These values are obtained from the balance sheet of the company’s
financial statements.

It is an important metric which is used to evaluate a company’s financial leverage. This ratio
helps understand if the shareholder’s equity has the ability to cover all the debts in case business
is experiencing a rough time.

It is represented as

Debt to equity ratio = Long term debt / shareholder’s funds

Or

Debt to equity ratio = total liabilities / shareholders’ equity

A high debt-to-equity ratio is associated with a higher risk for the business as it indicates that the
company is using debt for fuelling its growth. It also indicates lower solvency of the business.

2. Debt Ratio

Debt ratio is a financial ratio that is used in measuring a company’s financial leverage. It is
calculated by taking the total liabilities and dividing it by total capital. If the debt ratio is higher,
it represents the company is riskier.

The long-term debts include bank loans, bonds payable, notes payable etc.

Debt ratio is represented as

Debt Ratio = Long Term Debt / Capital or Debt Ratio = Long Term Debt / Net Assets

Low debt to capital ratio is indicative of a business that is stable while a higher ratio casts doubt
about a firm’s long-term stability. Trading on equity is possible with a higher ratio of debt to
capital which helps generate more income for the shareholders of the company.
3. Proprietary Ratio or Equity Ratio

Proprietary ratios is also known as equity ratio. It establishes a relationship between the
proprietors funds and the net assets or capital.

It is expressed as

Equity Ratio = Shareholder’s funds / Capital or   Shareholder’s funds / Total Assets

4. Interest Coverage Ratio

The interest coverage ratio is used to determine whether the company is able to pay interest on
the outstanding debt obligations. It is calculated by dividing company’s EBIT (Earnings before
interest and taxes) with the interest payment due on debts for the accounting period.

It is represented as

Interest coverage ratio = EBIT / interest on long term debt

Where EBIT = Earnings before interest and taxes or Net Profit before interest and tax.

A higher coverage ratio is better for the solvency of the business while a lower coverage ratio
indicates debt burden on the business.
III. PROFITABILITY RATIO

1.Gross Profit

This ratio measures the marginal profit of the company. This ratio is also used to measure the
segment revenue. A high ratio represents the greater profit margin and it’s good for the
company. Formula: Gross Profit ÷ Sales × 100 Gross Profit= Sales + Closing Stock – op stock
– Purchases – Direct Expenses
2.Net Profit

This ratio measures the overall profitability of company considering all direct as well as
indirect cost. A high ratio represents a positive return in the company and better the
company is. Formula: Net Profit ÷ Sales × 100 Net Profit = Gross Profit + Indirect Income
– Indirect Expenses

3.Operating Profit Ratio

 Operating profit ratio is a type of profitability ratio that is used for determining the operating
profit and net revenue generated from the operations. It is expressed as a percentage.

The formula for calculating operating profit ratio is:

Operating Profit Ratio = Operating Profit/ Revenue from Operations × 100 

Or  Operating Profit Ratio = 100 – Operating ratio 

4.Return on Capital Employed (ROCE) or Return on Investment (ROI)

 Return on capital employed (ROCE) or Return on Investment is a profitability ratio that

measures how well a company is able to generate profits from its capital. It is an important ratio
that is mostly used by investors while screening for companies to invest.

The formula for calculating Return on Capital Employed is :

ROCE or ROI = EBIT ÷ Capital Employed × 100

Where EBIT = Earnings before interest and taxes or Profit before interest and taxes

Capital Employed = Total Assets – Current Liabilities

5.Return on assets

Return on assets is a profitability ratio that provides how much profit a company is

able to generate from its assets
 It is calculated by dividing the company's earnings after taxes (EAT) by its total assets, and
multiplying the result by 100%.

IV. ACTIVITY RATIO

Activity ratios are used to determine the efficiency of the organisation in utilising its assets for
generating cash and revenue. It is used to check the level of investment made on an asset and the
revenue that it is generating. For this reason, the activity ratio is also known as the efficiency
ratio or the more popular turnover ratio.

The role of activity ratio or turnover ratio is in the evaluation of the efficiency of a business by
careful analysis of the inventories, fixed assets and accounts receivables.

Let us discuss the types of activity ratios.

Types of Activity Ratios

1. Stock Turnover ratio or Inventory Turnover Ratio

2. Debtors Turnover ratio or Accounts Receivable Turnover Ratio
3. Creditors Turnover ratio or Accounts Payable Turnover Ratio
4. Working Capital turnover ratio.
5. Investment Turnover Ratio

The following are discussed below.

1.Stock Turnover Ratio

This is one of the most important turnover ratios which highlights the relationship between the
inventory or stock in the business and cost of the goods sold. It shows how fast the inventory
gets cleared in an accounting period or in other words, the number of times the inventory or the
stock gets sold or consumed. For this reason, it is also known as the inventory turnover ratio.

It is calculated by the following formula

Stock Turnover Ratio = Cost of Goods Sold / Average Inventory

A high stock turnover ratio is indicative of fast moving goods in a company while a low stock
turnover ratio indicates that goods are not getting sold and are being stored at warehouses for an
extended period of time.

2.Debtor Turnover Ratio

This ratio is an important indicator of a company which shows how well a company is able to
provide credit facilities to its customers and at the same time is also able to recover the due
amount within the payment period.

It is also known as accounts receivable turnover ratio as the payments for credit sales that will be
received in the future are known as accounts receivables.

The formula for calculating Debtor Turnover ratio is

Debtor Turnover Ratio = Credit Sales / Average Debtors

A higher ratio indicates that the credit policy of the company is sound, while a lower ratio shows
a weak credit policy.

3.Creditors Turnover Ratio

Creditors turnover ratio is a measure of the capability of the company to pay off the amount for
credit purchases successfully in an accounting period.

It shows the number of times the account payables are cleared by the company in an accounting
period. For this reason, it is also known as the Accounts payable turnover ratio.

The formula for calculating creditors turnover ratio is

Creditors Turnover ratio = Net Credit Purchases / Average Creditors

Where average creditors are also known as average accounts payable.

A high ratio is indicative that a company is able to finance all the credit purchases and vice
versa.

4. Working Capital Turnover Ratio

This ratio is helpful in determining the effectiveness with which a company is able to utilise its
working capital for generating sales of its goods.

The formula for calculating working capital turnover ratio is

Working capital turnover ratio = Sale or Costs of Goods Sold / Working Capital

If a company has a higher level of working capital it shows that the working capital of the
business is utilized properly and on the other hand, a low working capital suggests that business
has too many debtors and the inventory is unused.

Also read: Working Capital Turnover Ratio

5. Investment Turnover Ratio or Net Asset Turnover Ratio

Investment Turnover Ratio is related to the sales taking place in the business and the net assets or
the capital employed. It determines the ability of the business to generate sales revenue by the
use of net assets of the business. The ratio is calculated using the following formula

Investment Turnover Ratio = Net Sales/ Capital Employed

 CALCULATION OF RATIOS

I. LIQUIDITY RATIO: -

1.Current Ratio = Current assets

Current Liabilities

Year Current Assets Current Liabilities Current Ratio

2020-21 4150.55 517.74 8.01
2019-20 1263.36 720.83 1.75
2018-19 2993.67 671.96 4.46
2017-18 1110.56 119.2 9.32

Current Ratio
10
9
8
7
6 Current Ratio
5
4
3
2
1
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-
A good current ratio is between  1.2 to 2. ZOMATO has a high current ratio compared to their
peer groups, it indicates that management may not be using their assets and its short-term
financing facilities efficiently. This may also indicate problems in working capital management
of the company and is not securing it’s financing very well. In 2017-18 the company’s current
ratio goes up to 8.01 as compared to last four years, which means that there is unsold inventory
as well as the number of creditors are high.

2. Quick Ratio or Liquid Ratio or Acid Test Ratio= Current assets - inventories /Current
liabilities

Year Liquid Assets Current Liabilities Liquid Ratio

2020-21 4135.75 517.74 7.99
2019-20 1259.63 720.83 1.75
2018-19 2991.54 671.96 4.45
2017-18 1110.56 119.2 9.32

Liquid Ratio
10
9
8
7
6 Liquid Ratio
5
4
3
2
1
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-
An optimal quick ratio is considered as 1:1 i.e. current liabilities = current assets. The quick ratio
for Zomato is greater than the optimal ratio. That indicates too much cash and near-cash that
leads to inefficient use of resources. In the year 2017-18 the ratio goes up to 9.32 as compared to
last three years, which is inadequate for a business as this implies that the business has 9 times
idle current assets against the requirement of 1. These idle assets could have been utilized to
make extra money.

3. Cash Ratio=Cash & Cash equivalents/Current Liabilities

Year Cash Equivalents Current Liabilities Cash Ratio

2020-21 903.66 517.74 1.74

2019-20 359.88 720.83 0.49

2018-19 238.69 671.96 0.35

2017-18 208.07 119.2 1.74

Cash Ratio
2
1.8
1.6
1.4
1.2 Cash Ratio
1
0.8
0.6
0.4
0.2
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-
The cash ratio of ZOMATO is less than 1 in 2019-20 and 2018-19 , that indicates that there are
more current liabilities than cash and cash equivalents. It means insufficient cash on hand exists
to pay off short-term debt. The cash ratio indicates to creditors, analysts, and investors the
percentage of a company’s current liabilities that cash and cash equivalents will cover. As the
cash ratio is less than 1 in two years ,the creditor of the zomato will assume more risk while
extending credit to the company. In this case, they will rely on the previous track record of the
company. On the other hand, the company would like to keep it low or optimized to suit its
requirements because idle cash means unwanted loss of interest cost.

II. SOLVENCY RATIOS: -

1. Debt to Equity Ratio = Debt or long term debt

Share holder`s fund

Year Total debt shareholder funds Debt Equity Ratio

2020-21 577.65 7643.79 0.075
2019-20 2171.14 457.35 4.74
2018-19 717.11 2365.28 0.30
2017-18 120.53 1036.64 0.11

Debt Equity Ratio

5
4.5
4
3.5
3 Debt Equity Ratio
2.5
2
1.5
1
0.5
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-
The optimal D/E ratio varies by industry, but it should not be above a level of 2.0. The debt equity
ratio of ZOMATO is less than 1 but in 2019-20 it is above the level of 2, that indicates that the
portion of assets provided by stockholders is lesser than the portion of assets provided by creditors.
Creditors usually like a low debt to equity ratio because a low ratio (less than 1) is the indication of
greater protection to their money.

2. Proprietary ratio = Shareholder fund/ total assets

Year Shareholder fund Total Assets Proprietary ratio

2020-21 7643.79 8703.54 0.87
2019-20 457.35 2900.38 0.15
2018-19 2365.28 3314.12 0.71
2017-18 1036.64 1349.12 0.76

Proprietary ratio
1
0.9
0.8
0.7
0.6 Proprietary ratio
0.5
0.4
0.3
0.2
0.1
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-
Proprietary ratio is a type of solvency ratio that is useful for determining the amount or
contribution of shareholders or proprietors towards the total assets of the business.
It is also known as equity ratio or shareholder equity ratio or net worth ratio. The main purpose
of this ratio is to determine the proportion of the total assets of a business that is funded by the
proprietors.

Proprietary ratio can be used to evaluate the stability of the capital structure of a business or
company and also show how the assets of a business are formed by issuing a number of equity
shares rather than taking loans or debt from outside.

It also indicates how much the shareholders will receive in the event of liquidation of the
company.

The proprietary ratio is expressed in the form of a percentage and is calculated by dividing the
shareholders equity with the total assets of the business.

3. Interest Coverage Ratio = Profit before interest, depreciation, amortization & tax/fixed
interest charges

Profit before Interest,

Year depreciation, Fixed Interest
amortization & tax Charges Interest Coverage Ratio
2020-21 -628.1 13.1 -47.64

2019-20 -2347.81 13.17 -178.14

2018-19 -2226.63 64.91 -34.30

2017-18 -122.33 37.99 -3.22

 Interest Coverage Ratio
0
-20 2020-21 2019-20 2018-19 2017-18

-40
-60
-80 Interest Coverage Ratio
-100
-120
-140
-160
-180
-200

INTERPRETATION-
The interest coverage ratio is a debt and profitability ratio used to determine how easily a
company can pay interest on its outstanding debt. The interest coverage ratio is calculated by
dividing a company's earnings before interest and taxes (EBIT) by its interest expense during a
given period.

4. Debt to equity ratio= Long term borrowings and loan / total assets

Long term
Year
borrowings and loan Total assets Debt to equity ratio
2020-21 0 8703 0

2019-20 1.47 2900 0

2018-19 1.31 3314 0

2017-18 1.33 1349 0

 Debt to equity ratio
1
0.9
0.8
0.7
0.6 Debt to equity ratio
0.5
0.4
0.3
0.2
0.1
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-

For lenders and investors, a high ratio means a riskier investment because the business might not
be able to produce enough money to repay its debts. If a debt to equity ratio is lower — closer to
zero — this often means the business hasn't relied on borrowing to finance operations

III. ACTIVITY RATIO-:

1. FIXED ASSETS TURN OVER RATIO= NET SALES

AVERAGE FIXED ASSETS
FIXED
Year NET SALES FIXED ASSETS ASSETS
RATIO
2020-21 2118.42 291.39 7.2
2019-20 2742.72 382.22 7.1
2018-19 1397.01 103.44 13.5
2017-18 485.09 66.36 7.3
 FIXED ASSETS RATIO
16
14
12
10
FIXED ASSETS RATIO
8
6
4
2
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION—

The fixed asset turnover ratio reveals how efficient a company is at generating sales from its
existing fixed assets. A higher ratio implies that management is using its fixed assets more
effectively. A high FAT ratio does not tell anything about a company's ability to generate solid
profits or cash flows.

2. DEBTOR TURNOVER RATIO— CREDIT SALES/ DEBTORS

DEBTOR
Year CREDIT SALES DEBTORS TURNOVER
RATIO
2020-21 2118.42 129.87 16.31
2019-20 2742.72 123.12 22.27
2018-19 1397.01 70.34 19.8
2017-18 485.09 26.08 18.6
NOTE – Whole sale is considered as on credit

DEBTOR TURNOVER RATIO

25

20

15 DEBTOR TURNOVER RATIO

10

0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION—

A high receivables turnover ratio can indicate that a company's collection of accounts
receivable is efficient and the company has a high proportion of quality customers that pay their
debts quickly. A high receivables turnover ratio might also indicate that a company operates on a
cash basis.

3. CREDITOR TURNOVER RATIO— NET CREDIT PURCHASE/ AVERAGE

CREDITORS

NET CREDIT
Year CREDITORS RATIO
PURCHASE
2020-21 202.87 297.16 0.68
2019-20 110.52 268.73 0.41
2018-19 18.72 371.87 0.05
2017-18 0 68.18 0
 CREDITORS TURNOVER RATIO
0.8
0.7
0.6
0.5 CREDITORS TURNOVER
RATIO
0.4
0.3
0.2
0.1
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION—

In essence, a creditors turnover ratio is a measure of how often a particular company pays off
its debts to suppliers within a given accounting period. ... A higher ratio is a good sign, as it
means a business is paying off its debts more quickly.

4. WORKING CAPITAL TURNOVER RATIO—COGS/ SALES

WORKING CAPITAL
WORKING CAPITAL= CA- CL

Year SALES WORKING CAPITAL RATIO

2020-21 2118.42 3632.8 0.58
2019-20 2742.72 542.53 5.05
2018-19 1397.01 2321.71 0.60
2017-18 485.09 991.37 0.48
 WORKING CAPITAL TURNOVER
RATIO
6

4 WORKING CAPITAL
TURNOVER RATIO
3

0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION-

The working capital turnover ratio measures how efficiently a business uses its working
capital to produce sales. A higher ratio indicates greater efficiency. In general, a high ratio can
help your company's operations run more smoothly and limit the need for additional funding.

5. STOCK TURNOVER RATIO—COGS/ AVERAGE INVENTORY

Year SALES AVERAGE INVENTORY RATIO

2020-21 2118.42 14.80 143
2019-20 2742.72 3.73 735
2018-19 1397.01 2.13 655
2017-18 485.09 0 0
 STOCK TURNOVER RATIO
800
700
600
500
STOCK TURNOVER RATIO
400
300
200
100
0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION—

Inventory turnover is the rate that inventory stock is sold, or used, and replaced. The inventory
turnover ratio is calculated by dividing the cost of goods by average inventory for the same
period. A higher ratio tends to point to strong sales and a lower one to weak sales.

6. DEBT COLLECTION PEROID- AVERAGE ACCOUNT RECEIVABLE / SALES

TURNOVER * 365 DAYS

AVERAGE ACCOUNT
Year SALES TURNOVER RATIO
RECEIVABLE
2020-21 129.87 2118.42 22.3 DAYS
2019-20 123.12 2742.72 16.3 DAYS
2018-19 70.34 1397.01 18.3 DAYS
2017-18 26.08 485.09 19.6 DAYS
INTERPRETATION—

In accounting the term Debtor Collection Period indicates the average time taken to collect
trade debts. In other words, a reducing period of time is an indicator of increasing efficiency. It
enables the enterprise to compare the real collection period with the granted/theoretical credit
period.

7. DEBT PAYMENT PEROID- AVERAGE ACCOUNT PAYABLE / AVERAGE

CREDIT PURCHASES * 365 DAYS

AVERAGE ACCOUNT
Year PURCHASE RATIO
PAYABLE
2020-21 297.16 202.87 534 DAYS
2019-20 268.73 110.52 887 DAYS
2018-19 371.87 18.72 7250 DAYS
2017-18 68.18 0 0 DAYS

INTERPRETATION—

Accounts payable turnover ratio (also known as creditors turnover ratio or creditors' velocity) is
computed by dividing the net credit purchases by average accounts payable. It measures the
number of times, on average, the accounts payable are paid during a period.

IV.PROFITABILITY RATIO

1. GROSS PROFIT RATIO= GROSS PROFIT / SALES *100

Year GROSS PROFIT SALES RATIO

2020-21 2118.42 2118.42 100
2019-20 2742.74 2742.74 100
 2018-19 1397.01 1397.01 100
2017-18 485.09 485.09 100

GROSS PROFIT RATIO

120

100

80
GROSS PROFIT RATIO
60

40

20

0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION—

The Gross Profit ratio indicates the amount of profit that is available to cover operating and
non-operating expenses of your business. Change in gross profit ratio reflect the changes in the
selling price or cost of revenue from operations or a combination of both

2. NET PROFIT—NET PROFIT / SALES *100

Year NET PROFIT SALES RATIO

2020-21 -816.43 2118.42 -38.53
2019-20 -2385.60 2742.74 -86.97
2018-19 -1001.12 1397.01 -71.66
2017-18 -106.31 485.09 -21.91
 NET PROFIT RATIO
0
-10 2020-21 2019-20 2018-19 2017-18

-20
-30
-40 NET PROFIT RATIO
-50
-60
-70
-80
-90
-100

INTERPRETATION-

It is the ratio of net profits to revenues for a company or business segment. Expressed as a
percentage, the net profit margin shows how much profit is generated from every $1 in sales,
after accounting for all business expenses involved in earning those revenues.

3. OPERATING PROFIT RATIO= OPERATING PROFIT / NET SALES *100

OPERATING PROFIT=Net sales – (Cost of goods sold + Administrative and office expenses
+ Selling and distribution exp

Year OPERATING PROFIT NET SALES RATIO

2020-21 2118.42 2118.42 100
2019-20 2742.74 2742.74 100
2018-19 1397.01 1397.01 100
2017-18 485.09 485.09 100
.
 OPERATING PROFIT RATIO
120

100

80
OPERATING PROFIT RATIO
60

40

20

0
2020-21 2019-20 2018-19 2017-18

INTERPRETATION—

The operating profit margin ratio indicates how much profit a company makes after paying
for variable costs of production such as wages, raw materials, etc. It is also expressed as a
percentage of sales and then shows the efficiency of a company controlling the costs and
expenses associated with business operations.

4. RETURN ON CAPITAL EMPLOYED= EBIT

TOTAL ASSETS-TOTAL CURRENT LIABILITIES

Year EBIT TOTAL ASSETS - CL RATIO

2020-21 -815.12 8185.80 -0.099
2019-20 -2385.60 2179.55 -1.09
2018-19 -1001.12 2642.16 -0.37
2017-18 -106.31 1230.51 -0.086
 RETURN ON CAPITAL EMPLOYED
0
2020-21 2019-20 2018-19 2017-18
-0.2

-0.4 RETURN ON CAPITAL

EMPLOYED
-0.6

-0.8

-1

-1.2

INTERPRETATION—
Ultimately, the calculation of ROCE tells you the amount of profit a company is generating
per $1 of capital employed. The more profit per $1 a company can generate, the better. Thus, a
higher ROCE indicates stronger profitability across company comparisons

5 .RETURN ON ASSETS= NET PROFIT / TOTAL ASSETS

Year NET PROFIT TOTAL ASSETS RATIO

2020-21 -816.43 8703.54 -0.09
2019-20 -2385.60 2900.38 -0.8
2018-19 -1001.12 3314.12 -0.3
2017-18 -106.31 1349.71 -0.07
 RETURN ON ASSET
0
2020-21 2019-20 2018-19 2017-18
-0.1
-0.2
-0.3
RETURN ON ASSET
-0.4
-0.5
-0.6
-0.7
-0.8
-0.9

INTERPRETATION—

The term return on assets (ROA) refers to a financial ratio that indicates how profitable a
company is in relation to its total assets. ... A higher ROA means a company is more efficient
and productive at managing its balance sheet to generate profits while a lower ROA indicates
there is room for improvement.
 REMARK OF GROUP ON CURRENT SITUATION OF
ZOMATO

AS PER OUR OPINION

ITS STRENGTHS

 User friendly interface

 Well connected
 Strong funding
 First service provider

IT`S WEAKNESS

 Security issue
 Increased competition
 Inefficiency in expansion

IT`S OPPORTUNITIES

 More acquisition
 Scope of expansion in future
 Online users

IT`S THREATS

 Tough competition
 Fragile business model
 Policies by government
 REFERENCE

https://www.moneycontrol.com/india/stockpricequote/online-services/zomato/Z

https://www1.nseindia.com/live_market/dynaContent/live_watch/get_quote/GetQuote.jsp?
symbol=ZOMATO

https://groww.in/stocks/zomato-ltd

https://www.angelone.in/research/zomato-limited-research-report-12-07-2021
 ANNEXURE

Consolidated balance sheet

In crores

 ZOMATO Mar 21 Mar 20 Mar 19 Mar 18

  12 mths 12 mths 12 mths 12 mths

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS

Equity Share Capital 0.03 0.03 0.03 0.03

Preference Share Capital 0.00 0.00 0.00 0.00

Total Share Capital 0.03 0.03 0.03 0.03

Revaluation Reserves 0.00 0.00 0.00 0.00

Reserves and Surplus 7,643.76 457.35 2,365.28 1,036.61

Total Reserves and Surplus 7,643.76 457.35 2,365.28 1,036.61

Money Received Against Share

0.00 0.00 0.00 0.00
Warrants

Employees Stock Options 0.00 0.00 0.00 0.00

Total Shareholders Funds 7,643.79 457.38 2,365.31 1,036.64

Preference Shares Issued By

0.00 0.00 0.00 0.00
Subsidiary Companies

Equity Share Application Money 0.00 0.00 0.00 0.00

Preference Share Application

0.00 0.00 0.00 0.00
Money

Share Capital Suspense 0.00 0.00 0.00 0.00

Hybrid/Debt/Other Securities 454.93 252.40 243.72 174.38

Statutory Consumer Reserves 0.00 0.00 0.00 0.00

Special Appropriation Towards

0.00 0.00 0.00 0.00
Project Cost

Service Line Contribution From

0.00 0.00 0.00 0.00
Consumers

Government/Other Grants 0.00 0.00 0.00 0.00

Minority Interest -5.71 -6.50 -31.42 8.43

Policy Holders Funds 0.00 0.00 0.00 0.00

Group Share In Joint Ventures 0.00 0.00 0.00 0.00

NON-CURRENT LIABILITIES

Long Term Borrowings 0.00 1.47 1.31 1.33

Deferred Tax Liabilities [Net] 0.00 0.00 0.00 0.00

Other Long Term Liabilities 66.89 1,458.09 48.96 2.53

Long Term Provisions 25.91 16.71 14.27 7.21

Total Non-Current Liabilities 92.79 1,476.27 64.55 11.07

Foreign Currency Monetary Item

0.00 0.00 0.00 0.00
Translation Difference A/C

CURRENT LIABILITIES

Short Term Borrowings 1.36 0.00 0.00 0.00

Trade Payables 297.16 268.73 371.87 68.18

Other Current Liabilities 212.24 442.85 294.97 48.49

Short Term Provisions 6.98 9.25 5.12 2.53

Total Current Liabilities 517.74 720.83 671.96 119.20

Total Capital And Liabilities 8,703.54 2,900.38 3,314.12 1,349.71

ASSETS

NON-CURRENT ASSETS

Tangible Assets 83.85 103.24 39.77 4.86

Intangible Assets 207.42 278.02 68.93 60.21

Capital Work-In-Progress 0.00 0.19 0.32 0.75

Intangible Assets Under

0.13 0.77 0.43 0.54
Development

Other Assets 0.00 0.00 0.00 0.00

Cnstruction Stores 0.00 0.00 0.00 0.00

Mining Development Expenditure 0.00 0.00 0.00 0.00

Assets Held For Sale 0.00 0.00 0.00 0.00

Fixed Assets 291.39 382.22 109.44 66.36

Non-Current Investments 0.00 0.00 7.30 9.57

Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00

Long Term Loans And Advances 0.00 0.00 0.00 4.32

Other Non-Current Assets 3,013.82 45.53 15.22 52.77

Total Non-Current Assets 4,553.00 1,637.03 320.45 239.14

Minority Interest 0.00 0.00 0.00 0.00

Group Share In Joint Ventures 0.00 0.00 0.00 0.00

Foreign Currency Monetary Item

0.00 0.00 0.00 0.00
Translation Difference A/C

CURRENT ASSETS

Current Investments 2,205.25 323.92 2,137.25 819.66

Inventories 14.80 3.73 2.13 0.00

Trade Receivables 129.87 123.12 70.34 26.08

Cash And Cash Equivalents 903.66 359.88 238.69 208.07

Short Term Loans And Advances 0.00 0.00 0.00 0.00

OtherCurrentAssets 896.97 452.71 545.26 56.75

Total Current Assets 4,150.54 1,263.36 2,993.67 1,110.57

Total Assets 8,703.54 2,900.38 3,314.12 1,349.71

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES,
COMMITMENTS

Contingent Liabilities 93.89 0.66 0.00 0.07

Other Earnings 0.00 0.00 0.00 0.00

BONUS DETAILS

Bonus Equity Share Capital 0.00 0.00 0.00 0.00

NON-CURRENT INVESTMENTS

Non-Current Investments Quoted

0.00 0.00 0.00 0.00
Market Value

Non-Current Investments
0.00 0.00 7.30 9.57
Unquoted Book Value

CURRENT INVESTMENTS

Current Investments Quoted

0.00 0.00 0.00 0.00
Market Value

Current Investments Unquoted

2,205.25 323.92 0.00 0.00
Book Value

CONSOLIDATED PROFIT AND LOSS ACCOUNT

  Mar 21 Mar 20 Mar 19 Mar 18

  12 mths 12 mths 12 mths 12 mths

INCOME
Revenue From Operations
1,915.75 2,398.40 1,296.30 466.36
[Gross]
Less: Excise/Sevice Tax/Other
0.00 0.00 0.00 0.00
Levies
Revenue From Operations [Net] 1,915.75 2,398.40 1,296.30 466.36
Other Operating Revenues 78.04 206.34 16.29 0.00
Total Operating Revenues 1,993.79 2,604.74 1,312.59 466.36
Other Income 124.64 138.00 84.42 18.73
Group Share In Joint Ventures 0.00 0.00 0.00 0.00
Total Revenue 2,118.42 2,742.74 1,397.01 485.09
EXPENSES
Cost Of Materials Consumed 0.00 0.00 0.00 0.00
Purchase Of Stock-In Trade 202.87 110.52 18.72 0.00
Purchase of Crude Oil And Others 0.00 0.00 0.00 0.00
Cost of Power Purchased 0.00 0.00 0.00 0.00
Cost Of Fuel 0.00 0.00 0.00 0.00
Aircraft Fuel Expenses 0.00 0.00 0.00 0.00
Aircraft Lease Rentals 0.00 0.00 0.00 0.00
Operating And Direct Expenses 0.00 0.00 0.00 0.00
Changes In Inventories Of FG,WIP
-11.01 -1.60 -2.13 0.00
And Stock-In Trade
Employee Benefit Expenses 740.77 798.88 600.79 290.49
Finance Costs 10.08 12.64 62.34 25.20
Provsions and Contingencies 0.00 0.00 0.00 0.00
Depreciation And Amortisation
137.74 84.24 25.59 16.02
Expenses
Miscellaneous Expenses Written
0.00 0.00 0.00 0.00
Off
Other Expenses 1,528.32 4,001.64 2,892.73 259.69
Less: Inter Unit / Segment /
0.00 0.00 0.00 0.00
Division Transfer
Less: Transfer to / From
0.00 0.00 0.00 0.00
Investment / Fixed Assets / Others
Less: Amounts Transfer To Capital
0.00 0.00 0.00 0.00
Accounts
Less: Share of Loss From 0.00 0.00 0.00 0.00
Partnership Firm
Group Share In Joint Ventures 0.00 0.00 0.00 0.00
Total Expenses 2,608.78 5,006.31 3,598.04 591.41
Profit/Loss Before Exceptional,
-490.36 -2,263.57 -2,201.04 -106.31
ExtraOrdinary Items And Tax
Exceptional Items -324.77 -122.03 1,199.92 0.00
Profit/Loss Before Tax -815.12 -2,385.60 -1,001.12 -106.31
Tax Expenses-Continued Operations
Current Tax 1.30 0.00 0.00 0.00
Less: MAT Credit Entitlement 0.00 0.00 0.00 0.00
Deferred Tax 0.00 0.00 0.00 0.00
Other Direct Taxes 0.00 0.00 0.00 0.00
Tax For Earlier Years 0.00 0.00 0.00 0.00
Total Tax Expenses 1.30 0.00 0.00 0.00
Profit/Loss After Tax And Before
-816.43 -2,385.60 -1,001.12 -106.31
ExtraOrdinary Items
Prior Period Items 0.00 0.00 0.00 0.00
Extraordinary Items 0.00 0.00 0.00 0.00
Profit/Loss From Continuing
-816.43 -2,385.60 -1,001.12 -106.31
Operations
Profit Loss From Discontinuing
0.00 0.00 0.00 0.00
Operations
Total Tax Expenses Discontinuing
0.00 0.00 0.00 0.00
Operations
Net Profit Loss From
0.00 0.00 0.00 0.00
Discontinuing Operations
Profit/Loss For The Period -816.43 -2,385.60 -1,001.12 -106.31
Minority Interest 3.61 18.44 45.60 3.24
Share Of Profit/Loss Of Associates 0.00 0.00 0.00 0.00
Consolidated Profit/Loss After
-812.82 -2,367.16 -955.52 -103.07
MI And Associates
OTHER ADDITIONAL INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) -2.00 -5.00 0.00 0.00
Diluted EPS (Rs.) -2.00 -5.00 0.00 0.00
Imported Raw Materials 0.00 0.00 0.00 0.00
Indigenous Raw Materials 0.00 0.00 0.00 0.00
Imported Stores And Spares 0.00 0.00 0.00 0.00
Indigenous Stores And Spares 0.00 0.00 0.00 0.00
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 0.00 0.00 0.00 0.00
Preference Share Dividend 0.00 0.00 0.00 0.00
Tax On Dividend 0.00 0.00 0.00 0.00