Mittal School of Business Faculty of Business and arts

Name of the faculty member: Dr. Shaiku Shahida Saheb

Course Code: ACC306 Course Title: Financial Statement Analysis

Academic Task No: 1 Academic Task Title: Class assignment 1
Date of Allotment: 14-02-2023 Date of Submission: 06-03-2023
Student Roll No: RQ4E73A31 Student Reg. No: 12111856
Term: 4 Section: Q4E73
Max. Marks: 30 Marks. Obtained:
Evaluation Parameters

Learning Outcomes:

Declaration:

I declare that this Assignment is my individual work. I have not copied it from any other students’ work or from any other
source except where due acknowledgement is made explicitly in the text, nor has any part been written for me by any other
person.

Evaluation Criterion: Rubrics on different parameters

Student’ Signature:

Evaluator’s Comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator’s Signature and Date:

 DECLARATION

I hereby declare that the project report entitled "FINANCIAL STATEMENT ANALYSIS" submitted by me to
“LOVELY PROFESSIONAL UNIVERSITY, PUNJAB”

in partial fulfillment of the requirement for the award of the degree of “BACHELOR OF BUSINESS
ADMINISTRATION “is a record of bona fide project work carried out by me under the guidance of DR. SHAIKU
SHAHIDA SAHEB.

I am thankful and fortunate enough to get constant encouragement, support and guidance from the faculty of “Mittal
school of business” who helped me in successfully completing my project. I choose this moment to acknowledge the
contribution gratefully by giving necessary advices and guidance to make my project a good learning experience.

SANSKRITI SAHGAL

28/09/2022
 INTRODUCTION

The Supreme Industries Limited, founded in 1942, has been relevant with the changing times and continues to be a
household name solely because of the core values that they uphold. Supreme has always nurtured a positive and people-
first attitude. They express their gratitude by bestowing dignity, equality and sensitivity to our workforce that
persistently challenges the status quo with innovation and quality. Every business venture remains rooted in humility,
curiosity, empathy towards stakeholders, and perseverance as they move toward sustainability, inclusivity, and success.
With its expanding manufacturing and distribution network across the nation, Supreme has exceptionally fortified its
PAN India presence. With an all-encompassing goal of driving change for the betterment of society, Supreme has
always made choices that nurture and protect the environment.
The company strives to reduce carbon emissions in its operations by increasing the use of renewable energy and low-
carbon fuels.It is indeed every company's responsibility to make changes and choices that benefit the environment.
Hence as a company, they aim to foster an environment-first culture in the future as well. Supreme has become the
industry standard in the plastics industry over the years. They do nothing less than the best when it comes to creating
products with the highest process and quality standards. Hence, their organisation has received awards, accolades and
recognition at global levels. Supreme has always been committed to creating value for its stakeholders by adhering to
corporate governance standards and by making rewarding decisions.

MISSION OF THE COMPANY

Organisational objectives for Supreme Industries Inc are the short to medium term targets and goals that the organization
sets to achieve the bigger strategic goals set for the long term. The organisational objectives are important in shaping
resource allocation within Supreme Industries Inc as well as in determining the policies, schedules and processes that are
implemented in Supreme Industries Inc. The mission is to develop strengths and be amongst the leading construction and
contracting company in India

Training- Supreme Industries Inc encourages its employee force to undergo training if need be to meet the requirements
of the mission statement. Supreme Industries Inc should regularly hold workshops to refine the values being defined in
the mission statement and build them in its employee force.

Goal setting - Supreme Industries Inc develops smart goals to meet the strategic targets identified in the mission
statement Supreme Industries Inc also develops ethical grounds to remain in line with the mission statement Supreme
Industries Inc keep goals flexible, but the means to achieve the goals is stringent and reflects the values drafted in the
mission statement

VISION OF THE COMPANY

To contribute to the growth of the Indian economy through the largest range of plastic products. Being the most value
driven solution provider in all of their plastic product businesses with the objective of adding value to their customers
daily lives and fostering a culture of respect and empowerment for all our stakeholders.
Their Vision 2020 was “Growing the business by improving and optimising human skills, effective use of technology
and creating employment for a team of 10000 dedicated workforce.”
Our Vision 2025 is “Achieving 300% Growth by synergising Innovation Technology and Manpower skills within the
supreme ltd resulting in 15000 Jobs”

BUSINESS OF THE COMPANY

They’re India’s one of the leading plastic processing companies with their manufacturing and distribution roots spread
across the country. With the strength of 26 plants and manufacturing facilities, Supreme processes more than 4,00,000
metric tons of plastic polymer each year. Every facility is outfitted with vanguard machinery and storage facilities with
our largest facility spanning 130 acres at Gadegaon, Maharashtra. This enables them to serve their supply chain
stakeholders better. Their Knowledge Centres, created as part of our Pipe Initiative, provide visiting professionals like
plumbers, contractors, consultants and architects with the means to develop their knowledge and skills while also
showcasing the product line and its use. Their four knowledge centres are located in Gadegaon, Malanpur, Kharagpur
and Ernakulum.
Product Range:
1. Plastic piping systems
2. Moulded furniture
3. Protective packaging products
4. Multi-layer cross laminated films
5. Industrial moulded products
6. Material handling products
7. Performance films
8. Composite cylinder

MANAGEMENT OF THE COMPANY

Board of directors

NAME DIN DESIGNATION

Shri B. L. Taparia CHAIRMAN

Shri M. P.Taparia MANAGING DIRECTOR

Shri S. J. Taparia EXECUTIVE DIRECTOR

Shri V. K. Taparia EXECUTIVE DIRECTOR

Shri R. Kannan INDEPENDENT DIRECTOR

Ms. Ameeta Parpia INDEPENDENT DIRECTOR

COMPETITORS

a) Finolex industries :
They are India’s most trusted PVC pipes and fittings manufacturer. Over the last 40 years, they have impacted
the sanitation-plumbing and agricultural sectors with prudent investments across our value chain.Right from the
sourcing of quality raw materials and resin production, to manufacturing, storage, transport, sales, marketing and
even further downstream to include customer engagement.
b) Astral ltd. :
Astral Pipes was established in 1996 with the aim of manufacturing plumbing and drainage systems in India.
Today, they cover the needs of millions of households, while adding extra mileage to India’s developing real
estate fraternity with the hallmark of unbeaten quality.Astral Pipes aims to be a truly global, high-performing
 organisation delivering quality products and services to its customers and attain leadership position in the
industries they operate in.
c)  Nilkamal ltd:
Brand Nilkamal has become a household name owing to its quality and reach of moulded furniture business
across the deepest pockets of the country. Nilkamal has to its credit, of being the world’s largest producer of
moulded plastic furniture giving it an edge over competition.
d) Fenoplast ltd. :
Incorporated in 1976, Fenoplast is today a leading manufacturer of PVC pipes with world class reputation of
product quality As part of planned expansion Fenoplast added a second coating line adapting the transfer coating
process in 1982. The next step was to diversify into the manufacturing.

PROFITABILITY ANALYSIS OF THE COMPANY FOR THREE YEARS

For the year 2021-22

For the year 2020-21
For the year 2019-20
Ratios Formula 2020 2021 2022
Gross profit Gross profit/sales 83354/ 551127 129068/ 635698 1304.74/ 7772.81
Margin *100 = 0.1512 = 15.12% = 0.2030 = = 0.167 = 16.7%
20.30%
Net profit Profit after tax*100 49640/ 551127 80137/ 635698 811.89/ 7772.81 =
Margin = 0.090 = 9.006% = 0.126 = 12.6% 0.104 = 10.4%
Return Net Profit(loss) for 70207/213259*100 101416/286914*1 1041.41/ 3387.94
on the year / Equity = 32.92% 00 = 35.34% *100 = 30.73%
Equity Share Capital *100
Return Net Profit after 70207/ 306922 = 101416/ 344841 = 1041.41/ 3982.65
on Tax/ Total Assets 0.2287 = 22.87% 0.2940 = 29.40% = 0.26144
Assets * 100 =26.14%
Earnings Net Profit after (999.9) / 8424.0 / 32,114.4 /
per share Tax- Preference 2399.334,970 = 2399.334,970 2399.334,970
Dividend / No. of (0.4) = 3.5 = 13.38
equity shares
Return on Net Profit Before 130019/ 296167* 1309.89/ 3478.38
Investment Interest and Tax / 85372/ 222358* 100 = 43.90% * 100 = 37.65%
/ Return Capital Employed 100 = 38.39%
on capital *100 (Capital
employed employed=
Total Assets-
Total current
liabilities)
Price Market price per 750 / (0.4) = 750 / 3.5 = 750 / 13.38 =
Earnings share/ Earnings per (1875) 214.28 56.05
Ratio share
Dividend Dividend paid/ 21,589.2 / 15,594.7 / 13,391.9 /
per share Number of shares 2399.334,970 = 2399.334,970 = 2399.334,970
ratio 8.998 6.499 = 5.581
Dividend Dividend paid/ 21,589.2 / (999.9) 15,594.7 / 8424.0 13,391.9
payout Net income = (21.591) = /32,114.4 =
ratio 1.851 0.417
Dividend Annual dividends 10.5 / 750 * 100 = 8.5 / 750 * 100 = 7 / 750 * 100 =
yield ratio per share/Current 1.4% 1.13% 0.93%
share price
Diluted Net Profit after Tax- (999.9) / 8424.0 / 32,114.4 /
earnings Preference Dividend 2399,334,970 = 2399,334,970 2399,334,970
per share / Weighted Average (0.4) = 3.5 = 13.38
shares + Conversion
of Diluted shares

PROFITABILITY ANALYSIS
Analysis:
- Supreme industries Return on equity was 35.35% and it has continuously decreased by 30.73% in
3 years by a huge percentage. As net profit(loss) for the year is also decreasing.

- Return on assets is also decreasing by 3.45% in 2022, as companies net profit(loss) for the year is
decreasing continuously whereas total assets have increased in 2021 and suddenly decreased in
2022.

- Earnings per share is increasing by 3.1% in 2021 and by 9.88% in 2022, as companies net
profit(loss) for the year is decreasing continuously.

- Return on capital employed has increased in 2021 by 5.1% and decreased in 2022 by 6.25%.

- Price-earnings ratios have also shown a drastic negative change in these 3 year

- Dividend per share ratio has decreased by 0.918% in 2021 and 2.499% in 2022.

- Dividend payout ratio has decreased by 1.434% in 2021 and decreased by 19.74% in 2022.

- Dividend yield ratio has decreased by 0.2% in 2021 and 0.27% in 2022.

- Diluted EPS has also decreased by 9.88% in 2021 and 3.9% in 2022.
 COMPETITORS PROFITABILITY ANALYSIS

Finolex Industries
Nilkamal Ltd.
Analysis:

 Current Ratio of Finolex Industries is 0.96, Nilkamal industries is 1.65, and

Supreme industries’s is 2.26. This shows Nilkamal industries has more ability
to meet its short-term obligations in comparison to Finolex Industries and
Supreme industries.

 Debt- Equity Ratio of Finolex industries is 0.53, Nilkamal industries is 0.65

and Supreme industries is 0.21. This shows that VIP industries has more
ability to meet its long-term debt.

 Return on Equity Ratio of Finolex Industries is 0.09, Nilkamal industries is

12.67 and Supreme industries is (41.67). This shows that Nilkamal industries
has more ability to provide returns to its shareholders.

 Inventory Turnover Ratio of Finolex Industries is 4.58, Nilkamal

industries is 4.15 and Supreme industries is 6.17. All these companies’
Inventory turnover is quite similar and all of them can turn their
inventory into sales.

 Net Profit Ratio of Finolex Industries is 11.27, Nilkamal industries is 20.54 and
Supreme industries is (0.64). This shows that among all these 3, Nilkamal
industries has the maximum amount of Profit which will help the shareholders.

 Return on Capital Employed by Finolex Industries is 24.31, Nilkamal

industries is 10.25 and Supreme industries is 31.85. This shows that
Supreme industries has more earnings before interest and tax in
comparison to others.

 Return on Investment of Finolex Industries is 4.83, Nilkamal industries is

24.95 and Supreme industries is 3.33. This shows that Nilkamal industries
has generated more income through its investments in comparison to the
other two.

 Overall, Nilkamal industries is in a more profitable position in comparison to

Supreme industries and Finolex Industries.
Analyse the statement of changes in equity position

Analysis:
- Supremes industries has not issued or repurchased any existing shares and it is the same
(2,399.3) for all 3 years.
- Capital Reserve was 53,575.2 in 2020 but at the end, they transferred 31,316.7 during
a merger and after that 22,258.5 was its capital reserve in 2021 and 2022.
- General Reserve was 34,779.3 in 2020 but at the end, they received 16,655.7 during
a merger and after that 51,435.0 was its general reserve in 2021 and 2022.
- Retained Earnings has increased by 19,592.8 in 2021 whereas decreased by 23,524.7 in
2022 as we have faced net loss in the year 2022.
- Securities premium, Amalgamation reserve & Capital redemption reserve has not
shown any changes in these years, values were 11,874.1, 43.8 & 7.5, accordingly.
- In other comprehensive income (OCI), Equity instrument through OCI has shown a
lot of changes in these 3 years, as in 2021 it has decreased by 959.1 and in 2022 it
has increased by 1003.4.
- In other comprehensive income (OCI), Debt instrument through OCI has increased by
104.7 in 2021 and decreased by 104.4 in 2022.
- In other comprehensive income (OCI), Foreign currency translation reserve has
increased by 20,616.9 in 2021 and decreased by 559.3 in 2022.
- In other comprehensive income (OCI), effective portion of cash flow hedges has
increased by 728.2 in 2021 and decreased by 320.3 in 2022.
- Overall, statement of changes in equity has showed a slight change like it has
increased by 25,422.5 in 2021 and decreased by 23,505.2 in 2022.
References

https://economictimes.indiatimes.com/supreme-industries-ltd/balancesheet/companyid-
12969.cms

https://www.moneycontrol.com/financials/supremeindustries/profit-lossVI/SI48

https://finance.yahoo.com/quote/SUPREMEIND.NS/financials/