MITTAL SCHOOL OF BUSINESS MBA (GEN)

Continuous Assessment - 1
Analysis Report on AIA Engineering Limited
Course: FINANCIAL REPORTING, STATEMENTS AND ANALYSIS-I
Section: Q2141

Submitted By
Student Name Roll No
Masthan Shaik RQ2141B29

Submitted To
Gagandeep Singh
UID: 15831
Course Instructor
Course Code: ACCM506
FINANCIAL REPORTING, STATEMENTS AND ANALYSIS-I

1
 INTRODUCTION

AIA Engineering (NSE: AIAENG), Established withinside the yr 1991, an authorized ISO 9001 employer,
specialises withinside the design, development, manufacture, set up and servicing of excessive chromium
wear, corrosion and abrasion resistant castings used withinside the cement, mining and thermal energy era
industries.1

Vega Industries is a completely owned subsidiary of AIA Engineering, completely offering its products,
presenting customer service and technical offerings to clients from its places of work worldwide.

The employer's philosophy is to offer clients with optimized answers via technical assessment in their
requirements, thereby presenting in particular designed answers in best metallurgy for the application, plus
supplying technique optimization offerings worldwide.

As a end result of this approach, the Group is these days the main employer for Quality, Services and
Innovation in its area with an enviable popularity presenting Global Solutions.

A surely international method to customer's neighbourhood requirements

AIA engages with clients in extra than one hundred twenty countries. The Company has a neighbourhood
presence in strategic places the world over via subsidiaries and rep places of work. This has allowed the
Company to construct lengthy status relationships with international blue-chip clients in cement and mining
markets.

Services
AIA Engineering and Vega Industries have end up one of the maximums a success groups in providing and
putting in put on additives due to the fact they clearly recognize how grinding and crushing operations want
to work. This know-how is to be had to clients international and consists of the following

• Mill Audits
• Turnkey set up and commissioning projects
• Stock evaluation and management
• Performance monitoring

The agency focuses on following commercial enterprise area.

• Cement
• Mining
• Power
• Aggregate

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COMPARATIVE BALANCE SHEET OF AIA ENGINEERING LIMITED FROM
YEAR 2019 -2021

Year Percentage
Particulars Year 2019 Year 2020 Absolute Change
2021 Change
ASSETS
Current Assets 3,056.78 3,144.17 3,459.19 402.41 13.16
Fixed assets 976.85 1,018.02 1,299.02 322.17 32.98
Total (A) 4033.63 4,162 4,758 724.58 17.98
LIABILITIES
CAPITAL
Current Liabilities 398.56 362.65 444.59 46.03 11.55
Long Term Loans 112.07 89 60.48 51.59 46.03
Capital 3,513.71 3,701.29 4,244.31 730.60 20.79
Minority Interest 9.3 9.25 8.82
Total (B) 4033.64 4162.19 4758.2 -724.56 -17.96

INTERPRETATION:
ASSETS
• Property, plan, equipment’s (PPE) is increasing.

• PPE increasing from one year to another year means the AIA engineering company is in expansion.

• AIA engineering company is increasing its production.

• AIA engineering company had good liquidity position compare to the previous year.

• CA = Current Liquidity position of AIA engineering company is also good with the percentage

increase of 13.16%

• CL = Current Liability of the company is also increasing every year. From 2019 to 2021 it changes is

11.55%

• AIA engineering company can easily pay of its current liability with the current assets.

• AIA company have operational efficiency.

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COMPARATIVE BALANCE SHEET OF AIA ENGINEERING LIMITED FROM
YEAR 2019 -2020 (HORIZANTAL)

Particulars Year 2019 Year 2020 Absolute Change Percentage Change

ASSETS
Current Assets 3,056.78 3,144.17 87.39 2.86
Fixed assets 976.85 1,018.02 41.17 4.21
Total (A) 4033.63 4,162 128.37 3.18
LIABILITIES
CAPITAL
Current Liabilities 398.56 362.65 35.91 9.01
Long Term Loans 112.07 89 -23.07 -20.59
Capital 3,513.71 3,701.29 187.58 5.34
Minority Interest 9.3 9.25 0.05 0.54
Total (B) 4033.64 4162.19 128.55 3.19

INTERPRETATION:
ASSETS
• Property, plan, equipment’s (PPE) is increasing.

• PPE increasing from one year to another year means the AIA engineering company is in expansion.

• AIA engineering company is increasing its production.

• AIA engineering company had good liquidity position compare to the previous year.

• CA = Current Liquidity position of AIA engineering company is also good with the percentage

increase of 2.86%

LIABILITIES

• CL = Current Liability of the company is also increasing every year. From 2019 to 2020 it changes is

9.01%

• Long term loans are decreasing with the percentage of 20.59%, it shows that the company is less

depending on outsiders.

• AIA engineering company can easily pay of its current liability with the current assets.

• AIA company have operational efficiency.

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COMPARATIVE BALANCE SHEET OF AIA ENGINEERING LIMITED FROM
YEAR 2020 -2021 (HORIZANTAL)

Particulars Year 2020 Year 2021 Absolute Change Percentage Change

ASSETS
Current Assets 3,144.17 3,459.19 315.02 10.02
Fixed assets 1,018.02 1,299.02 281.00 27.60
Total (A) 4,162 4,758 596.00 14.32
LIABILITIES
CAPITAL
Current Liabilities 362.65 444.59 81.94 22.59
Long Term Loans 89 60.48 -28.52 -32.04
Capital 3,701.29 4,244.31 543.02 14.67
Minority Interest 9.25 8.82 -0.43 -4.65
Total (B) 4162.19 4758.2 596.01 14.32

INTERPRETATION:
ASSETS
• Property, plan, equipment’s (PPE) is increasing.

• PPE increasing from one year to another year means the AIA engineering company is in expansion.

• AIA engineering company is increasing its production.

• AIA engineering company had good liquidity position compare to the previous year.

• CA = Current Liquidity position of AIA engineering company is also good with the percentage

increase of 10.2%

LIABILITIES

• CL = Current Liability of the company is also increasing every year. From 2020 to 2021 it changes is

22.59 %

• Long term loans are decreasing with the percentage of 32.04 %, it shows that the company is less

depending on outsiders.

• AIA engineering company can easily pay of its current liability with the current assets.

• AIA company have operational efficiency.

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CURRENT RATIO OF AIA ENGINEERING LIMITED

YEAR

Current Ratio 2019 2020 2021

7.67 8.67 7.78

INTERPRETATION
• AIA company is having current assets 7.78 against 1 CL
• Current Assets of AIA company is enough to pay its short-term debts
• AIA Limited had margin of the safety
• The creditor can easily give money to AIA limited because they had high margin of safety
• AIA company short solvency position is satisfactory
• In the year of 2020, it was high.
• But in the year of 2021, it was decreased to 7.78
• There is 0.89% decrease compare to the past year.

QUICK RATIO (OR) LIQUID RATIO

YEAR

Debt Quick Ratio 2019 2020 2021

5.70 6.52 6.08

INTERPRETATION
• AIA engineering limited Business is having 6.08 CA against 1 Cl
• AIA Engineering company had enough current assets to pay off its current liquidity
• AIA Engineering company is having sufficient margin of safety
• Short term solvency position of the company is satisfactory
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STOCK TURNOVER RATIO OF AIA LIMITED

YEAR

Stock Turnover Ratio 2019 2020 2021

3.91Times 3.83 Times 3.82 Times

INTERPRETATION

• The AIA LIMTED company Stock is slod 3.82 times in a year

• Efficiency of AIA company is low
• The sale of the company is very slow
• The AIA company stock doesn’t convert in cash quickly
• AIA company is having low revenue and it effect the business good will

DEBT EQUITY RATIO OF AIA LIMTED

YEAR

Debt - equity Ratio 2019 2020 2021

0.04 0.03 0.04

INTERPRETATION
• AIA company had less debt equity ratio
• AIA company interest burden low
• Debt servicing is less burdensome
• AIA company leverage is less
• Decrease in risk
• AIA company had High margin of the safety
• AIA company Debt ratio was not same compare to the last year.

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PROPRIETARY – EQUITY RATIO OF AIA LIMITED

YEAR

Proprietary - Equity Ratio 2019 2020 2021

88 % 90 % 90 %

INTERPRETATION
• In the year 2021 insider fund is 90% and outsider fund is 10% in the company assets.
• In the year of 2021 the company is highly depends upon the insider fund only.
• Company total assets are mainly bought by with insider fund only.
• Company had sufficient surplus amount to improve their assets and to buy equipment’s.

Analysis on the liquidity ratio and solvency position

• Company Liquidity ratio is good.

• Company had 7.78 % current ration in the year of 2021 against 1 CL it means that the company is
having more assets than the liabilities.
• Company can pay its current labilities easily.
• Company had low labilities in the year of 2021.
• Company solvency position is good.
• Company had more assets to pay off its long term loans
• The company can easily pay its long-term loans because company had high assets than the liabilities

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COMPARISION WITH COMPETITORS

AIA ENGINEERING LTD TRF LTD SANGHVI LTD

Particulars 2019 2020 2021 2019 2020 2021 2019 2020 2021

Operating profit
20.1 22.12 24.18 -35.88 -53.6 -28.64 31.61 48.54 38.99
Ratio

Gross Profit Ratio 17.37 18.43 20.5 -37.31 -55.37 -31.04 -18.24 5.06 -15.54

Net Profit Ratio 16.66 19.8 19.63 -44.53 -71.15 -59.64 -20.56 -2.04 -10.01

• The AIA company is doing low business than the competitors from the same field
• Every year there is a slight change in the operating ratio, gross profit ration and net profit ratio.
• Operating profit ratio is 24% only it means in 100 sale 75% is operating cost and remaining is profit.
• Profit of sale is high compared to other competitors.
• The cost of production is high sales is less because the gross profit ratio is less.
• Gross profit ratio is also high compare to the competitors and there is slight change in that in year to
year.
• Competitor’s sale and operating ratio is in MINUS (-) it means that the company is not controlling the
production cost, company is failed to that.
• Compare to competitors the AIA company is doing good business but the business sale is low and not
that effective
• Net profit ratio is less it means safter deducting the operational expenses and operational income the
net profit should be high but in AIA company case it is less.
• There is huge change in the ratio it is so less.
• Overall AIA company is doing less business in the field.
• Competitors are having less business than the AIA company
• The competitors company sales also low

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Decision About invest in company

➢ As Per Me I Don’t Want to Invest in The Company

Reasons:

➢ The AIA company is having Stock turnover rate is very low it clearly saying that the company slae is
low in the market.
➢ If the sale is low then the revenue is low it means the company is not performing well in the business.
➢ The company is having less debt ration more assets but this is not useful in doing business it doesn’t
helps in the sales of the company.
➢ Company operating profit ration is very low in the past years but now it is improving little bit however
it is not enough it should improve more.
➢ The gross profit ratio is very less in every year it means that the company is having less profit in the
sales.
➢ The Gross profit of the company is 20% it means in the sale of 100 rupees the company profit is only
20 rupees it should be improve little more, it is fine now but to getting profit by sales It is not enough.
➢ Net profit ratio is also should improve little bit; it is low than 20% it is not good sign of business.
➢ Mainly stock turn over ratio is very low.
➢ The stock turnover ratio is 3.82 time in the year it is very low it should be high than only the sale of
company is good and profit also increase.
➢ Assets high and inabilities are low it is good sing but it helps only getting loans and debts but not in
the sale of the company and profits of the company.
➢ The company is not following wealth maximization rule.

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