A Project Report On

Financial Statement Analysis Of SUNTV

Submitted in partial fulfilment of the requirement for the award of
MASTER OF BUSINESS ADMINISTRATION
From

NARYANA BUSINESS SCHOOL

AHMEDABAD
Subject : Financial Statement Analysis
Component : Major

Submitted By
Name : Krutika Jain
Batch : MBA2021
Roll No. : 18

Under the Guidance Of

Name : Dr. Nidhi Srivastava
Designation : Professor
 CONTENTS
1. INTRODUCTION TO ENTERTAINMENT INDUSTRY 3
2. INTRODUCTION TO SUN TV 6
3. PESTEL ANALYSIS OF ENTERTAINMENT INDUSTRY 7
4. INTRODUCTION TO FINANCIAL STATEMENT ANALYSIS 9
5. MEANING & CONCEPTS OF FINANCIAL STATEMENT ANALYSIS 11
6. COMPARATIVE ANALYSIS OF BALANCE SHEET 14
7. COMPARATIVE ANALYSIS OF INCOME STATEMENT 17
8. COMMON SIZE ANALYSIS OF BALANCE SHEET 19
9. COMMON SIZE ANALYSIS OF INCOME STATEMENT 22
10. ANALYSIS OF SUN TV 24
11. RATIO ANALYSIS 24
12. FINDINGS 29
13. ANNEXURES 30
14. BIBLIOGRAPHY 34
 Introduction to Entertainment Industry
Entertainment is a form of activity that holds the attention and interest of an audience or gives
pleasure and delight. It can be an idea or a task, but is more likely to be one of the activities or events
that have developed over thousands of years specifically for the purpose of keeping an audience's
attention.
Most forms of entertainment have persisted over many centuries, evolving due to changes in culture,
technology, and fashion for example with stage magic. Films and video games, for example, although
they use newer media, continue to tell stories, present drama, and play music.

The entertainment industry (informally known as show business or show biz) is part of the tertiary
sector of the economy and includes many sub-industries devoted to entertainment. However, the term
is often used in the mass media to describe the mass media companies that control the distribution and
manufacture of mass media entertainment. In the popular parlance, the term show biz connotes the
commercially popular performing arts, especially musical theatre, vaudeville, comedy, film, fun, and
music. It applies to every aspect of entertainment including cinema, television, radio, theatre, and
music.

Types of Entertainment:
• Exhibition entertainment
• Live entertainment
• Mass Media entertainment
• Electronic entertainment

The media and entertainment industry are expected to increase 25% to Rs. 1.73 trillion (US$ 23.29
billion) in 2021, according to the FICCI-EY report 2021.

The Indian media and entertainment (M&E) business was valued at Rs. 1.38 trillion (US$ 19 billion)
in 2020, according to an EY analysis, and is expected to reach Rs. 1.73 trillion (US$ 23.7 billion) in
2021. Furthermore, due to the acceleration of digital adoption among consumers across regions, it is
expected to expand to Rs. 2.23 trillion (US$ 30.6 billion) by 2023.
Government Initiatives
The Telecom Regulatory Authority of India (TRAI) is about to method the Ministry of Information
and Broadcasting, Government of India, with a request to Fastrack the guidelines on broadcasting, in
a try and increase reforms withinside the broadcasting sector. The Government of India has agreed to
installation National Centre of Excellence for Animation, Gaming, Visual Effects and Comics
enterprise in Mumbai. The Indian and Canadian Government have signed an audio-visible co-
manufacturing deal to allow manufacturers from each the international locations trade and discover
their tradition and creativity, respectively.

In October 2021, Prasar Bharati determined to public sale its information with the desire of monetising
the content material thru sale to tv and OTT systems.
In June 2021, the Union Ministry of Information and Broadcasting notified the Cable Television
Network (Amendment) Rules, 2021, which objectives to set up a three-layer statutory mechanism for
residents to elevate grievances with admire to broadcasted content material.

As a part of the enlargement to encompass all virtual systems and virtual (OTT) gamers below an
unmarried roof, in May 2021, the Indian Broadcasting Foundation (IBF) introduced the flow to be
renamed because the Indian Broadcasting and Digital Foundation (IBDF).

As according to the Information Technology (Intermediary Guidelines and Digital Media Ethics
Code) Rules, 2021, IBDF could additionally shape a self-regulatory body (SRB) soon.

To ease filming in railways, the Film Facilitation Office (FFO) installation withinside the National
Film Development Corporation (NFDC) collaborated with the Ministry of Railways to increase an
included unmarried window filming mechanism to streamline the permission procedure for filming
throughout railway premises.

In November 2021, the authorities introduced that it's miles running toward growing a National Centre
of Excellence for AVGC (animation, visible effects, gaming and comics).

On February 25, 2021, the authorities mentioned the Information Technology (Intermediary
Guidelines and Digital Media Ethics Code) Rules 2021 to set up an innovative institutional mechanism
and a three-tier criticism redressal framework for information publishers and OTT systems at the
virtual media.

In February 2021, the virtual enjoyment committee of the Internet and Mobile Association of India
(IAMAI) finalised a code of behaviour to shape the idea for self-law code for OTT content material.
The code has been advocated through 17 OTT systems along with Netflix, Amazon Prime Video,
Disney+ Hotstar, ZEE5 and Voot.

In February 2021, Prasar Bharati (India) and PSM (the legit State Media of Maldives) inked a
settlement to facilitate collaboration and ability constructing withinside the subject of broadcasting.

Digital audio–visible content material along with movies and net indicates on over-the-top (OTT)
streaming systems, in addition to information and modern-day affairs on on-line systems, had been
added below the Ministry of Information and Broadcasting in November 2020. The Telecom
Regulatory Authority of India (TRAI) is about to method the Ministry of Information and
Broadcasting, Government of India, with a request to Fastrack the guidelines on broadcasting, in an
try and increase reforms withinside the broadcasting sector. The Government of India has agreed to
installation National Centre of Excellence for Animation, Gaming, Visual Effects and Comics
enterprise in Mumbai. The Indian and Canadian Government have signed an audio-visible co-
manufacturing deal to allow manufacturers from each the international locations trade and discover
their tradition and creativity, respectively.

In October 2021, Prasar Bharati determined to public sale its information with the desire of monetising
the content material thru sale to tv and OTT systems.

In June 2021, the Union Ministry of Information and Broadcasting notified the Cable Television
Network (Amendment) Rules, 2021, which objectives to set up a three-layer statutory mechanism for
residents to elevate grievances with admire to broadcasted content material. As a part of the
enlargement to encompass all virtual systems and virtual (OTT) gamers below an unmarried roof, in
May 2021, the Indian Broadcasting Foundation (IBF) introduced the flow to be renamed because the
Indian Broadcasting and Digital Foundation (IBDF).
As according to the Information Technology (Intermediary Guidelines and Digital Media Ethics
Code) Rules, 2021, IBDF could additionally shape a self-regulatory body (SRB) soon. To ease filming
in railways, the Film Facilitation Office (FFO) installation withinside the National Film Development
Corporation (NFDC) collaborated with the Ministry of Railways to increase an included unmarried
window filming mechanism to streamline the permission procedure for filming throughout railway
premises.

In November 2021, the authorities introduced that it's miles running toward growing a National Centre
of Excellence for AVGC (animation, visible effects, gaming and comics). On February 25, 2021, the
authorities mentioned the Information Technology (Intermediary Guidelines and Digital Media Ethics
Code) Rules 2021 to set up an innovative institutional mechanism and a three-tier criticism redressal
framework for information publishers and OTT systems at the virtual media.

In February 2021, the virtual enjoyment committee of the Internet and Mobile Association of India
(IAMAI) finalised a code of behaviour to shape the idea for self-law code for OTT content material.
The code has been advocated through 17 OTT systems along with Netflix, Amazon Prime Video,
Disney+ Hotstar, ZEE5 and Voot.

In February 2021, Prasar Bharati (India) and PSM (the legit State Media of Maldives) inked a
settlement to facilitate collaboration and ability constructing withinside the subject of broadcasting.
Digital audio–visible content material along with movies and net indicates on over-the-top (OTT)
streaming systems, in addition to information and modern-day affairs on on-line systems, had been
added below the Ministry of Information and Broadcasting in November 2020.
 Introduction to Sun TV
Sun TV Network is an Indian Mass media company headquartered in Chennai, Tamil Nadu, India. It
is a part of Sun Group and is one of Asia's largest TV networks. Established on 14 April 1992 by
Kalanithi Maran, it owns a variety of television channels in multiple languages and radio stations in
multiple languages. Its flagship channel is Sun TV, which was the first fully privately owned Regional
TV Channel in India and the First Tamil TV channel in World. Sun Group has owned Hyderabad-
based IPL team Sunrisers Hyderabad since 2012.

Revenue: ₹3,388.03 crore (2020-2021)

Operating income: ₹1,453.22 crore (2020-2021)
Net income: ₹1,520.41 crore (2020-2021)
Total assets: ₹7,777.68 crore (2019-2020)

Sun TV is the flagship channel of the Sun TV Network, which began broadcasting on April 14, 1993,
the Tamil New Year.
On a time-sharing agreement with ATN, it began with four and a half hours of programming per day.
In January 1997, however, it was changed to a 24-hour programming channel.
In January 1997, Sun TV was listed on the Bombay Stock Exchange after raising $133 million.
It is the world's most popular Tamil television channel, with broadcasts in the United States, the United
Arab Emirates, Singapore, Malaysia, Sri Lanka, Australia, Canada, South Africa, Qatar, Hong Kong,
Europe (the United Kingdom, France, Germany, Italy, Denmark, Austria, Switzerland, the
Netherlands, and Ireland), and other countries.
 Pestel Analysis of Entertainment Industry
Political Factors:
The entertainment industry is one of the major sources of revenue for many countries like India. Tax
policies have a major impact on the industry because it is mostly applicable on large-scale shows,
celebrity or sponsors stage shows, festivals, etc. The government will decide what entertainment
facilities to provide to the public and that what will be the prices and taxes. The PESTEL analysis of
the entertainment industry assesses the political factors that affect this industry to a greater extent.

Economical Factor:
Economic Factors play a vital role in the entertainment industry. People with higher disposable income
tend to spend more on entertainment. India has one of the best media industries in terms of films and
theatres, yet it needs to grow more in the children' genre. The PESTEL analysis of the Indian
entertainment industry is based on economic factors like inflation, employment rate, income
distribution, GDP growth and demographics.

Social Factors:
The entertainment industry is highly dependent on the audience, as most people spend their time on
social media or television even while working. People watch dramas, play games, watch other
influencers' life, and whatnot. Our society is being dictated by the entertainment industry directly or
indirectly.

Technological Factors:
Technology and the entertainment industry are inseparable things. From black and white television to
colourful visuals our media industry is dominated by technology. The increasing use of technology
will reshape the future content creators, as high internet access will become a necessity. This is the
PESTEL analysis of the entertainment industry.

Environmental Factors:
This is the PESTEL analysis of the entertainment industry. The entertainment industry has affected
the environment to some extent. Media is used for educating people to protect the environment as
much as possible. Entertainment industry includes all sorts of leisure activities like amusement parks,
media and sports stadiums.
Legal Factors:
This is the PESTEL analysis of the entertainment industry. There are laws and regulations implied in
the entertainment industry which are strict. Everything will be as per the contract and agreement.
Every person will be hired according to the agreement.
 Introduction to Financial Statement
Analysis
Financial statement analysis is the process of analysing a company's financial statements for decision-
making purposes. External stakeholders use it to understand the overall health of an organization as
well as to evaluate financial performance and business value. Internal constituents use it as a
monitoring tool for managing the finances.
Horizontal Analysis and Vertical Analysis:
Horizontal analysis compares financial information over time, typically from past quarters or years.
Horizontal analysis is performed by comparing financial data from a past statement, such as the
income statement. When comparing this past information, one will want to look for variations such as
higher or lower earnings.
Vertical analysis is a percentage analysis of financial statements. Each line item listed in the financial
statement is listed as the percentage of another line item. For example, on an income statement each
line item will be listed as a percentage of gross sales. This technique is also referred to as normalization
or common-sizing.

Users of Financial Statement Analysis:

There are a number of users of financial statement analysis. They are:

Creditors: Anyone who has lent funds to a company is interested in its ability to pay back the
debt, and so will focus on various cash flow measures.
Investors: Both current and prospective investors examine financial statements to learn about a
company's ability to continue issuing dividends, or to generate cash flow, or to continue growing
at its historical rate
Management: The company controller prepares an ongoing analysis of the company's financial
results, particularly in relation to a number of operational metrics that are not seen by outside
entities (such as the cost per delivery, cost per distribution channel, profit by product, and so
forth).
Regulatory authorities: If a company is publicly held, its financial statements are examined by
the Securities and Exchange board to see if its statements conform to the various accounting
standards.
Others:
Bankers and financial institutions
Employees.
Government.
Trade associations.
Economists and researchers.
Taxation authorities
 Meaning & Concepts of Financial
Statement Analysis
The term ‘financial analysis’, also known as analysis and interpretation of financial statements’, refers
to the process of determining financial strengths and weaknesses of the firm by establishing strategic
relationship between the items of the balance sheet, profit and loss account and other operative data.
“Analysing financial statements,” according to Metcalf and Titard, “is a process of evaluating the
relationship between component parts of a financial statement to obtain a better understanding of a
firm’s position and performance.”

Types of financial statements

Companies use balance sheets, income statements, and cash flow statements to manage their
operations and provide stakeholder transparency. All three statements are interrelated and give rise to
different perspectives on a company's activities and performance.

Balance sheet:
The balance sheet is a report of a company's financial value with respect to its book value. It is divided
into three parts, including the company's assets, liabilities, and capital. Liquid assets such as cash and
accounts receivable can tell a lot about the efficiency of a company's operations. Debt includes the
company's expense arrangements and the debt that the company is paying back. Equity includes
disclosure of participation and retained earnings from net income. The balance sheet must balance
assets and liabilities to equal shareholder`s equity. This figure is considered a company`s book value
and serves as an important performance metric that increases or decreases with the financial activities
of a company.

Income Statement:
The income statement breaks down the revenue a company earns against the expenses involved in its
business to provide a bottom line, meaning the net profit or loss. The income statement is broken into
three parts that help to analyze business efficiency at three different points. It begins with revenue and
the direct costs associated with revenue to identify gross profit. After that, it shifts to operating profit
and deducts indirect costs such as marketing costs, general costs, and depreciation costs. The end
result after deducting interest and taxes is net income. The basic analysis of the
income statement usually involves calculating gross margin, operating margin, and net margin, each
of which divides profit by sales. The rate of return helps indicate whether business costs are low or
high at various points in operation.

Cash Flow Statement:

The cash flow statement provides an overview of the company's cash flow from operating, investing
and financing activities. Net income is carried forward to the cash flow statement and displayed as the
top item for operating activities. As the title suggests, investment activities include cash flows
associated with company-wide investments. The Treasury section includes cash flows from liabilities
and equity finance. The bottom row shows the amount of cash available to the company.

Objectives of Financial Statement Analysis:

The major objectives of financial statement analysis are to provide decision makers information
about a business enterprise for use in decision-making. Users of financial statement information
are the decision-makers concerned with evaluating the economic situation of the firm and
predicting its future course.
Financial statement analysis can be used by the different users and decision makers to
achieve the following objectives:
1. Assessment of Past Performance and Current Position:
Past performance is often a good indicator of future performance. Therefore, an investor or
creditor is interested in the trend of past sales, expenses, net income, cash flow and return on
investment. These trends offer a means for judging management’s past performance and are
possible indicators of future performance.
Similarly, the analysis of current position indicates where the business stands today. For
instance, the current position analysis will show the types of assets owned by a business
enterprise and the different liabilities due against the enterprise. It will tell what the cash position
is, how much debt the company has in relation to equity and how reasonable the inventories and
receivables are.
2. Prediction of Net Income and Growth Prospects:
The financial statement analysis helps in predicting the earning prospects and growth rates in the
earnings which are used by investors while comparing investment alternatives and other users
interested in judging the earning potential of business enterprises. Investors also consider the risk
or uncertainty associated with the expected return.
The decision makers are futuristic and are always concerned with the future. Financial statements
which contain information on past performances are analyzed and interpreted as a basis for
forecasting future rates of return and for assessing risk.
3. Prediction of Bankruptcy and Failure:
Financial statement analysis is a significant tool in predicting the bankruptcy and failure
probability of business enterprises. After being aware about probable failure, both managers and
investors can take preventive measures to avoid/minimize losses.
Corporate managements can effect changes in operating policy, reorganize financial structure or
even go for voluntary liquidation to shorten the length of time losses.
In accounting and finance area, empirical studies conducted have suggested a set of financial
ratios which can give early signal of corporate failure. Such a prediction model based on
financial statement analysis is useful to managers, investors and creditors. Managers may use the
ratios prediction model to assess the solvency position of their firms and thus can take
appropriate corrective actions.
Investors and shareholders can use the model to make the optimum portfolio selection and to
bring changes in the investment strategy in accordance with their investment goals. Similarly,
creditors can apply the prediction model while evaluating the creditworthiness of business
enterprises.
4. Loan Decision by Financial Institutions and Banks:
Financial statement analysis is used by financial institutions, loaning agencies, banks and others
to make sound loan or credit decision. In this way, they can make proper allocation of credit
among the different borrowers. Financial statement analysis helps in determining credit risk,
deciding terms and conditions of loan if sanctioned, interest rate, maturity date etc.
However, objectives of financial statements analysis may be stated to bring out the
significance of such analysis:
(i) To assess the earning capacity or profitability of the firm.
(ii) To assess the operational efficiency and managerial effectiveness.
(iii) To assess the short term as well as long term solvency position of the firm.
(iv) To identify the reasons for change in profitability and financial position of the firm.
(v) To make inter-firm comparison.
(vi) To make forecasts about future prospects of the firm.
(vii) To assess the progress of the firm over a period of time.
(viii) To help in decision making and control.
(ix) To guide or determine the dividend action.
(x) To provide important information for granting credit.
 Comparative Analysis of Balance sheet
(2019-2020)

Balance sheet (2019-2020) Horizontal Analysis

Particulars 2019 2020 Horizontal

Analysis

ASSETS
Non-Current Assets
Property, Plant and Equipment 684.19 650.89 -4.87%
Capital Work-in-progress 13.36 66.3 396.26%
Investment Properties 11.26 8.28 -26.47%
Goodwill 4.8 4.8 0.00%
Other intangible assets 411.78 387.71 -5.85%
Right to use assets - 93.71
Investment in Joint Venture 445.65 441.62 -0.90%
Financial assets
Investments 261.39 277.49 6.16%
Other financial assets 13.51 13.54 0.22%
Deferred tax assets (Net) 1.09 0.99 -9.17%
Non-Current tax assets (Net) 98.1 77.15 -21.36%
Other non-current assets 207.86 210.71 1.37%
2152.99 2233.19 3.73%

Current Assets
Inventories 0.24 -
Financial Assets
Investments 2093.48 1972.92 -5.76%
Trade receivables 1133.99 1367.22 20.57%
 Cash and Cash Equivalents 378.9 405.8 7.10%
Bank Balances other than cash and cash
equivalents 214.1 297.37 38.89%
Other Financial Assets 170.01 187.13 10.07%
Other current assets 54.01 43.93 -18.66%
4044.73 4274.37 5.68%

TOTAL ASSETS 6197.72 6507.56 5.00%

EQUITY AND LIABILITIES

Equity
Equity share capital 197.04 197.04 0.00%
Other equity 5329.45 5527.07 3.71%
Equity attributable to the equity holders of
the parent 5526.49 5724.11 3.58%
Equity attributable to the owners of the
parent
Non-controlling interest 4.42 4.75 7.47%
Total Equity 5530.91 5728.86 3.58%

Non-Current Liabilities
Financial Liabilities
Trade Payables
- total outstanding dues of micro enterprises
and small enterprises
- total outstanding dues of creditors other
than micro enterprises and small enterprises 229.4 316.65 38.03%
Other financial liabilities 184.35 221.22 20.00%
Government grants 0.78 0.64 -17.95%
Short term provisions 17.66 21.13 19.65%
Other current Liabilities 116.96 51.38 -56.07%
549.15 611.02 11.27%
TOTALL EQUITY AND LIABILITIES 6197.72 6507.56 5.00%

A comparative balance sheet is a statement that shows the financial position of an organization over
different periods for which comparison is made or required. The financial position is compared with
2 or more periods to depict the trend, direction of change, analyse and take suitable actions.
In the above balance sheet, it can be seen that non-current assets (Fixed Assets) are increased by
3.73%, indicating poor liquidity of the firm.
Managers, analysts, and investors will look to a firm's current assets position, especially in relation to
current liabilities, in order to determine if the company has enough liquidity to meet its short-term
obligations such as payroll and bills. The current assets of the above firm increase by 5.68%
showcasing the ability of the firm increased.
 Comparative Analysis of Income Statement
(2019-2020)

Profit & Loss A/C (2019-2020) Comparative Analysis

Particulars 2019 2020 Horizontal

Analysis

INCOME
Revenue from operation 3782.54 3519.85 -6.94%
Other income 227.11 260.65 14.77%

Total income (I) 4009.65 3780.5 -5.71%

EXPENDITURE
Operating expenses 533.31 573.02 7.44%
Employee benefit expenses 329.86 323.22 -2.01%
Other expenses 312.69 347.69 11.19%
Depreciation and amortization expenses 662.81 700.2 5.64%
Finance Costs 1.65 12.75 672.72%

Total expenditure (II) 1840.32 1956.88 6.33%

Profit before share of profit / (loss) of

Joint Venture and tax (I-II) 2184.74 1823.62 -16.52%

Share of profit / (loss) from joint venture 15.41 -4.17 -127.06%

Profit before tax 2184.74 1819.45 -16.72%

Current Taxes 722.8 454.32 -37.14%
Deferred Taxes (Net) 28.26 -20.36 -172.04%
Income tax expense 751.06 433.96 -42.22%

Profit of the year 1433.68 1385.49 -3.36%

A comparative income statement combines information from several income statements as columns
in a single statement. It helps you identify financial trends and measure performance over time. You
can compare different accounting periods from your records. Or, you can compare your income
statement to other companies.
Profit of the year have reduced by 3.36% indicating loss for the financial year 2020 compared to year
2019.
 Common size Analysis of Balance sheet
Balance sheet (2019-2020)

Particulars 2019 2020 Vertical Analysis

2019 2020
ASSETS
Non-Current Assets
Property, Plant and
Equipment 684.19 650.89 11.03938222 10.00205914
Capital Work-in-progress 13.36 66.3 0.215563143 1.01881504
Investment Properties 11.26 8.28 0.181679714 0.127236629
Goodwill 4.8 4.8 0.077447836 0.073760365
Other intangible assets 411.78 387.71 6.644056201 5.957839805
Right to use assets - 93.71 0 1.440017457
Investment in Joint Venture 445.65 441.62 7.190547492 6.786260903
Financial assets
Investments 261.39 277.49 4.2175187 4.264117427
Other financial assets 13.51 13.54 0.217983387 0.208065696
Deferred tax assets (Net) 1.09 0.99 0.017587113 0.015213075
Non-Current tax assets (Net) 98.1 77.15 1.582840141 1.185544198
Other non-current assets 207.86 210.71 3.353813983 3.23792635
2152.99 2233.19 34.73841994 34.31685609

Current Assets
Inventories 0.24 - 0.003872392 0
Financial Assets
Investments 2093.48 1972.92 33.77822812 30.31735397
Trade receivables 1133.99 1367.22 18.29688982 21.00971793
 Cash and Cash
Equivalents 378.9 405.8 6.113538527 6.23582418
Bank Balances other than
cash and cash equivalents 214.1 297.37 3.45449617 4.569608271
Other Financial Assets 170.01 187.13 2.743105529 2.875578558
Other current assets 54.01 43.93 0.871449501 0.675061006
4044.73 4274.37 65.26158006 65.68314391

TOTAL ASSETS 6197.72 6507.56 100 100

EQUITY AND
LIABILITIES
Equity
Equity share capital 197.04 197.04 3.179233654 3.027862978
Other equity 5329.45 5527.07 85.99049328 84.93306247
Equity attributable to the
equity holders of the
parent 5526.49 5724.11 89.16972693 87.96092545
Non-controlling interest 4.42 4.75 0.071316549 0.072992028
Total Equity 5530.91 5728.86 89.24104348 88.03391747

Non-Current Liabilities
Financial Liabilities
Trade Payables
- total outstanding dues of
creditors other than micro
enterprises and small
enterprises 229.4 316.65 3.701361146 4.86587907
Other financial liabilities 184.35 221.22 2.974480938 3.399430816
Government grants 0.78 0.64 0.012585273 0.009834715
Short term provisions 17.66 21.13 0.284943495 0.324699273
Other current Liabilities 116.96 51.38 1.887145595 0.789543239
549.15 611.02 8.860516448 9.389387113
TOTALL EQUITY AND
LIABILITIES 6197.72 6507.56 100 100

Common size balance sheet refers to percentage analysis of balance sheet items on the basis of the
common figure as each item is presented as the percentage which is easy to compare, like each asset
is shown as a percentage of total assets and each liability is shown as a percentage of total liabilities
and stakeholder equity as a percentage of total stakeholder’s equity.
In vertical Analysis total assets and total liabilities are takes as base respectively for percentage
calculation.
 Common size Analysis of Income
Statement
Profit & Loss A/C (2019-2020)

Particulars 2019 2020 Vertical Analysis

2019 2020
INCOME
Revenue from operation 3782.54 3519.85 100 100
Other income 227.11 260.65 6.004166512 7.405145106

Total income (I) 4009.65 3780.5 106.0041665 107.4051451

EXPENDITURE
Operating expenses 533.31 573.02 14.09925606 16.27967101
Employee benefit expenses 329.86 323.22 8.720595156 9.182777675
Other expenses 312.69 347.69 8.266667372 9.877977755
Depreciation and
amortization expenses 662.81 700.2 17.52288145 19.89289316
Finance Costs 1.65 12.75 0.043621482 0.362231345

Total expenditure (II) 1840.32 1956.88 48.65302151 55.59555095

Profit before share of profit

/ (loss) of Joint Venture and
tax (I-II) 2184.74 1823.62 - -

Share of profit / (loss) from

joint venture 15.41 -4.17 0.407398203 0.118470958
Profit before tax 2184.74 1819.45 57.7585432 51.6911232

Current Taxes 722.8 454.32 19.10885278 12.90736821

Deferred Taxes (Net) 28.26 -20.36 0.747117017 -0.57843374
Income tax expense 751.06 433.96 19.8559698 12.32893447

Profit of the year 1433.68 1385.49 37.9025734 39.36218873

Common size balance sheet refers to percentage analysis of balance sheet items on the basis of the
common figure as each item is presented as the percentage which is easy to compare, like each asset
is shown as a percentage of total assets and each liability is shown as a percentage of total liabilities
and stakeholder equity as a percentage of total stakeholder’s equity.
Revenue from operations have decreased by Rs. 262.69. Total income has reduced by Rs. 229.15.
total expenditure has increased by Rs. 116. Profit of the year have increased around 1.45961533%.
 Analysis of SUN TV
The Media & Entertainment (ME) sector witnessed a strong uptick in programming investments
across the board in the year under review. As the intensity of competition increased in traditional TV
broadcasting, the M&E sector was also influenced greatly by the growing presence of OTT players
and the consequential commitments of big budgets into content, aided by the rapid spread of digital
infrastructure during the year ended March 2020
Sun TV, the flagship channel of your company, is the most watched channel in India today and it is
the largest in South India by penetration, viewership & ad revenues. It airs an assortment of fiction
and nonfiction content apart from movies across channels. Sun TV Network Limited (Sun Network)
maintains its dominant position in the southern states of India as one of the largest television and radio
entertainment Company in India with a portfolio of Satellite Television Channels spread across four
languages and in genres of GEC, news, music, action, life, movies, kids and comedy. Sun Network
also has a large network pan India in the FM Radio broadcasting segment along with its subsidiaries.
Sun Network continues to consolidate its leadership position, built over the years, by fortifying its
hold over key aspects of pricing and access to quality content. Sun Network is one of the first Regional
GE channels in country to adopt HD and it also forged early partnerships with OEMs to pre-load Sun
TV app on their devices.
The Total Income for the year ended March 31, 2020 was Rs.3,653.35 crore as against Rs. 3,883.22
crore during the previous year ended March 31, 2019. Profit Before Tax was Rs. 1,797.88 crore as
against Rs. 2,135.94 crore in the previous year. Profit After Tax was Rs. 1,371.83 crore as against Rs.
1,394.86 crore in the previous year. During the financial year ended March 31, 2020, the Board of
Directors have declared an Interim Dividends of Rs. 2.50 per equity share (50%) of face value of Rs.
5.00 each declared on August 9, 2019, November 12, 2019 and Rs. 7.50 per equity share (150%)
declared on February 14, 2020, and Rs. 12.50 per equity share (250%) of face value of Rs. 5.00 on
March 9, 2020 and have not recommended any Final Dividend. The dividend pay-out would result in
a total dividend of 500%, i.e., Rs. 25.00 per equity share of face value of Rs. 5.00 each for the financial
year ended March 31, 2020. (Prev. Year of 250%, i.e., Rs. 12.50 per equity share of face value of Rs.
5.00 each). The Reserve and Surplus of the Company as on March 31, 2020 stood at Rs. 5,427.05
crore as against Rs. 5,243.48 crore as on March 31, 2019
As per the analysis Sun tv is currently at the second position in regards to market capitalization in the
industry and holds a strong first position with profit 1520.41 Cr followed by Zee Tv with net profit
1121.00 Cr in the entertainment industry of India.
 Ratio Analysis

2019 2020
Liquidity Ratio

Current Ratio 0.731295 0.389814

Quick Ratio 0.731252 0.746111

Activity/ Turnover Ratio

Debtors turnover ratio 3.335602607 2.574457659

Asset turnover ratio 0.610311534 0.540886292
Investment turnover ratio 14.47086729 12.68460125
Working capital turnover ratio -2.54514258 -2.419989137

Profitability Ratios

Net Profit Margin 37.9025734 39.36218873

Return on Capital Employed 3.276405573 2.341877488
Return On Equity 68.38910776 61.44067057
Return On Net Worth 1.120560631 1.135925821

Solvency/Leverage Ratio
Debt-equity Ratio 1.121456838 1.136868439
Debt to Asset Ratio 0.088605164 0.093893871

Liquidity Ratio:
Liquidity ratios determine a company's ability to cover short-term obligations and cash
flows, while solvency ratios are concerned with a longer-term ability to pay ongoing debts.

• Current Ratio = Current Assets / Current Liabilities

Current Ratio of 2020 is less than current ratio of 2019, and less than ideal ratio 1:1 depicting that the
firm is not capable to convert assets to cash in 1 year period of time.

• Quick Ratio = Quick Assets / Current Liabilities

Ideal Ratio of Quick Ratio is 1:1, ratio of 2020 and 2019 is less than the ideal ratio. Indicating that
Assets cannot be converted to cash quickly.

Profitability Ratio:
Profitability ratios are a class of financial metrics that are used to assess a business's
ability to generate earnings relative to its revenue, operating costs, balance sheet assets, or
shareholders' equity over time, using data from a specific point in time.
Profitability ratios can be compared with efficiency ratios, which consider how well a company uses
its assets internally to generate income.

• Net Profit Margin = Net Profit ⁄ Total revenue x 100

Net profit margin is one of the most important indicators of a company's financial health. By tracking
increases and decreases in its net profit margin, a company can assess whether current practices are
working and forecast profits based on revenues. Net Have increased from 2019 to 2020.

• Return On Capital Employed = (Net Operating Profit / Capital

Employed) × 100
Return on capital employed (ROCE) is a financial ratio that can be used to assess a company's
profitability and capital efficiency. In other words, this ratio can help to understand how well a
company is generating profits from its capital as it is put to use. Return on capital employed have
reduced indicating firm is not using its capital efficiently.
 • Return On Equity = Net Income / Shareholders' Equity
Return on equity (ROE) is a measure of financial performance calculated by dividing net income by
shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt, ROE
is considered the return on net assets. ROE is considered a gauge of a corporation's profitability and
how efficient it is in generating profits.

Activity Ratio:
An activity ratio is a type of financial metric that indicates how efficiently a company is
leveraging the assets on its balance sheet, to generate revenues and cash.

• Debtors turnover ratio = Net Credit Sales / (Average Debtors +

Bills Receivables)
The Debtors turnover ratio also known as receivables turnover ratio is an accounting measure used to
quantify a company's effectiveness in collecting its accounts receivable, or the money owed by
customers or clients. This ratio measures how well a company uses and manages the credit it extends
to customers and how quickly that short-term debt is collected or is paid. A firm that is efficient at
collecting on its payments due will have a higher accounts receivable turnover ratio. In this firm
Debtors turnover ratio is reducing indicating the company’s ability to collect the debt is weak.

• Asset turnover ratio = Net Revenue / Total Assets

The asset turnover ratio measures the efficiency of a company's assets in generating revenue or sales.
Asset turnover ratio I s less than 1 depicting the firm is not using its assets to generate profit efficiently.

• Investment turnover ratio = Net sales / (Stockholders' equity +

Debt outstanding)
The investment turnover ratio compares the revenues produced by a business to its debt and equity.
The ratio is used to evaluate the ability of a management team to generate revenue with a specific
amount of funding.

• Working capital turnover ratio = Net Sales / Working capital

Working capital turnover is a ratio that measures how efficiently a company is using its working
capital to support sales and growth. Also known as net sales to working capital, working capital
turnover measures the relationship between the funds used to finance a company's operations and the
revenues a company generates to continue operations and turn a profit. Working Capital Turnover
Ratio is negative, which means that Company has not sufficient short-term funds for fulfilling the
sales done for that period. This will cause a shortage of funds and can cause a business to run out of
money.
Solvency Ratio:
A solvency ratio is a key metric used to measure an enterprise’s ability to meet its long-
term debt obligations and is used often by prospective business lenders. A solvency ratio indicates
whether a company’s cash flow is sufficient to meet its long-term liabilities and thus is a measure of
its financial health. An unfavorable ratio can indicate some likelihood that a company will default on
its debt obligations.

• Debt-equity Ratio = Total liabilities / Total shareholders' equity

The debt-to-equity ratio shows the proportions of equity and debt a company is using to finance its
assets and it signals the extent to which shareholder's equity can fulfil obligations to creditors.
Analysts see 2.0 as the ideal D/E ratio. A low debt-to-equity ratio indicates a lower amount of
financing by debt via lenders, versus funding through equity via shareholders.

• Debt to Asset Ratio = Total Debt / Total Assets

Total-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative to assets
owned by a company. Using this metric, analysts can compare one company's leverage with that of
other companies in the same industry. This information can reflect how financially stable a company
is. In general, many investors look for a company to have a debt ratio between 0.3 and 0.6. From a
pure risk perspective, debt ratios of 0.4 or lower are considered better, while a debt ratio of 0.6 or
higher makes it more difficult to borrow money. Debt to asset ratio of Sun TV is 0.093.
 Findings
In a modern economy in which competitiveness is often the key word, businesses raise the stakes by
publishing positive, better-than expected results. In upping the ante, profitable companies take a step
toward winning the economic competition and attracting investor interest. To understand financial
statement analysis, it’s important to understand the underlying data that make up corporate accounting
reports. These include statements of financial condition, shareholders’ equity reports, statements of
cash flows and statements of profit and loss. Although all businesses must post performance
information, financially shaky firms may be more eager to publish timely reports to shed the
bankruptcy stigma that generally looms around insolvent operations.

Financial statement analysis traces a company’s rise or fall from its inception to the reporting date.
Investors and financial analysts can review the firm’s operations over many years, pinpointing specific
parts of its business along the way. Accounting report review refers to the way a company or investor
analyses corporate performance and how the analyst compares such performance to rivals’
achievements. To analyse a financial statement, investors use three methods: vertical analysis,
horizontal analysis and ratio analysis. In vertical analysis, external financiers compare other financial
statement items with one item, which is referred to as the benchmark. For example, investors may
compare a company’s material costs and salaries expense proportionately to its revenues. Horizontal
analysis means comparing one financial item, such as sales or net income, from one period to another.
Ratio analysis relies on various accounting metrics, such as net profit margin and debt-to-equity ratio,
to evaluate an organization’s financial standing.
 Annexures

Profit & Loss A/C

PARTICULARS Amount Amount

INCOME
Revenue from operation xx xx
Other income xx xx

Total income (I) xx xx

EXPENDITURE
Operating expenses xx xx
Employee benefit expenses xx xx
Other expenses xx xx
Depreciation and amortization expenses xx xx
Finance Costs xx xx
xx xx
Total expenditure (II) xx xx
xx xx
Profit before share of profit / (loss) of Joint Venture and xx xx
tax (I-II)

Share of profit / (loss) from joint venture xx xx

Profit before tax xx xx

Current Taxes xx xx
Deferred Taxes (Net) xx xx
Income tax expense xx xx
Profit of the year xx xx
INCOME xx xx
 Balance Sheet

Particulars Amount Amount

ASSETS
Non-Current Assets
Property, Plant and Equipment xx xx
Capital Work-in-progress xx xx
Investment Properties xx xx
Goodwill xx xx
Other intangible assets xx xx
Right to use assets xx xx
Investment in Joint Venture xx xx
Financial assets xx xx
Investments xx xx
Other financial assets xx xx
Deferred tax assets (Net) xx xx
Non-Current tax assets (Net) xx xx
Other non-current assets xx xx

Current Assets
Inventories xx xx
Financial Assets xx xx
Investments xx xx
Trade receivables xx xx
Cash and Cash Equivalents xx xx
Bank Balances other than cash and cash xx xx
equivalents
Other Financial Assets xx xx
Other current assets xx xx

TOTAL ASSETS

EQUITY AND LIABILITIES

Equity
Equity share capital xx xx
Other equity xx xx
Equity attributable to the equity holders of the
parent
Non-controlling interest xx xx
Total Equity xx xx

Non-Current Liabilities
Financial Liabilities xx xx
Trade Payables xx xx
- total outstanding dues of creditors other than xx xx
micro enterprises and small enterprises
Other financial liabilities xx xx
Government grants xx xx
Short term provisions xx xx
Other current Liabilities xx xx

TOTALL EQUITY AND LIABILITIES xx xx

 Bibliography
https://en.wikipedia.org/wiki/Entertainment
https://en.wikipedia.org/wiki/Sun_TV_(India)
https://freepestelanalysis.com/pestel-analysis-of-entertainment-industry/