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A
MODULE V PROJECT REPORT
ON
Liquidity Analysis HLE Glasnostput Ltd
(Corporate Finance - 4529202)
Submitted to
An and Institute of Management & Information Science
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
IN
Gujarat Technological University
Guide By
Ms. Sneha Sharma
(Assistant Professor, MBA)
Submitted by
BHOI VIMALKUMAR KIRITBHAT
Enrolment No.: 227020592068
BHOI MITUAL KUMAR RAJESHBHAI
Enrolment No.: 227020592038
Batch: 2022-23
MBA SEMESTER II
An and Institute of Management & Information Science
MBA PROGRAMME
Affiliated to Gujarat Technological University
Ahmadabad

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Reno Content Page .no

1) Introduction on company 3-5

2) Profile of HLE Glascoat 5-6

3) HLE Glasnost Of management department 6-5

4) Net Working Capital , Current Ratio 6-8

5) Inventory period , Debtors turnover ratio 8-10

6) Account Receivable period , Operating cycle 10-12

7) Cash Cycle 12-13

8) Balance sheet , P&L Account 13-15

9) Conclusion 15-16

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HLE Glascoat Limited

HLE Glascoat Limited is a leading manufacturer of process equipment for the chemical and
pharmaceutical industries.
We are market leaders in Filtration and Drying Equipment and are a leading manufacturer of
Glass Lined Equipment globally. We manufacture a wide range of chemical processing
equipment in an equally wide range of materials for some of the most demanding
applications.
Over the last 40 years, our consistently high quality, and our commitment to solving our
customers’ unique process requirements has helped us build a solid reputation as a preferred
supplier of process equipment.
HLE Glasnost Limited is a part of the Patel Group of Companies founded in 1951 by Late Dr.
Khushalbhai H. Patel.

Evolution of HLE Glasnost

 HLE Engineers Pvt. Ltd. (HLE) was established in the year 1981. Over the
years, HLE emerged as the leading manufacturer of filtration and drying
equipment in India and globally.

 In 2017, HLE acquired a controlling stake in Swiss Glascoat Equipments

Limited (Glascoat). Glascoat, which was established in the year 1991, was a
leading manufacturer of glass lined equipment at the time.

 In 2019, the operating businesses of HLE and Glascoat were integrated via a
scheme of arrangement and the resulting company was renamed ‘HLE
Glascoat Limited’.

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Category Information

Owner Dr. Khushalbhai H. Patel.

Type Private limited company

Traded as BSE / NSE

Predesser Type Chemical & pharmaceutical

Founded 1951

Head quarter Maroli, Navsari

Products Glass coting , machinary

Industry Swiss Glascoat

HLE Glascoat Of management department

 The Management Department is responsible for the overall direction of the
company and ensuring that it is operating efficiently and effectively.
 The Finance Department is responsible for managing the company's financial
resources, including its cash flow, debt, and equity.
 The Dividend Department is responsible for determining how much of the
company's profits are paid out to shareholders in the form of dividends.

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 The Investment Department is responsible for managing the company's

investments, both in terms of its long-term strategic investments and its short-term
trading activities.
 The Working Capital Department is responsible for managing the company's short-
term assets and liabilities, such as its cash, accounts receivable, and accounts
payable.
 These departments work together to ensure that the company is financially sound
and that it is able to achieve its strategic goals.

1. Net Working Capital

Net working capital (NWC) is the difference between a business' short-term assets
and its short-term debts and liabilities

Formula

Net Working Capital Current assets – Current

liabilities

Table 1: Statement Showing the Net working capital Hle Glascoat ofLtd.
In Crores)

Year 2020-21 2021-22

Current assets 567 479
Less: current liabilities 396 341
Net working capital 171 138

INTERPRETAITION:

In your case, the net working capital for 2020-21 was 171 and for 2021-22 it was 138.
The interpretation of net working capital is that it shows how much money a company
has available to pay its bills in the short term. It is important because it helps investors
and creditors understand how much money a company has available to pay its bills in
the short term

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2. CurrentRatio
The current ratio describes the relationship between a company's assets and
liabilities. So, a higher ratio means the company has more assets than liabilities.

Formula

Current Ratio

Table 2: Statement Showing the Current Ratio Hle Glascoat company Ltd.
(` In Crores)

Particular 2022 2021

Total current assets 567 479

Total current liabilities 396 341

Total 1.43 1.40

INTERPRETATION:
In your case, the current ratio for 2022 is 1.43 and for 2021 it is 1.40. This means that the
company has more current assets than current liabilities in both years. The higher the current
ratio, the better it is for the company as it indicates that it has enough liquidity to meet its
short-term obligations.

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 Inventory period

Debtors Turnover Ratio or accounts receivables turnover ratio indicates the total
number of time’s debtors are changed into cash during one financial year.

Formula

Inventory period Average inventory

---------------------------------× 365
Cost of good sold

Table 3: Statement Showing the Inventory period RatioHle Glascoatof Company Ltd.
(` In Crores)

Year Average inventory Inventory period

---------------------------------×
365
Cost of good sold
2021 268.03 228
-----------×365
339.42

2022 147.64 223

-------------×365
230.42

Year Opening Inventory + Closing Inventory Average

----------------------------------------------------- inventory
2
2021 153.45 + 147.64 150
----------------------
2
2022 147.64 + 268.03 257
----------------------
2

INTERPRITATION
In your case, the inventory period for 2021 is 228 days and for 2022 it is 223 days. This
means that the company takes approximately 228 days in 2021 and 223 days in 2022 to sell
its current inventory or how long inventory remains unsold.

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Debtor’sturnover Ratio:

Debtors turnover Ratio Net current sales

----------------------------
Average sundry Debtors

Table 3: Statement Showing the Debtors Turnover Ratio of Hle Glascoat Company Ltd.
(` In Crores)

Year Opening Sundry + Closing Sundry Debtors Average sundry Debtors

-----------------------------------------------------------
2

2021 43.02 + 63.65 53.34

-------------------
2
2022 63.65 + 82.26 72.96
--------------------
2

Year Net credit sales Debtors TurnoverRatio

----------------------
Average sundry Debtors

2021 484.49 9.08 times

----------
53.34

2022 652.22 8.93 times

-----------
72.96

INTERPRETATION:
In your case, the Debtors Turnover Ratio for 2021 was 9.08 times and for 2022 it
was 8.93 times . This means that in 2021, the company collected its trade
receivables 9.08 times on average during the year and in 2022 it collected its trade
receivables 8.93 times on average during the year.

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Account Receivable period

Formula

Account Receivable period Average account Receivable

-------------------------------------
× 365
Annual sales

Year Average sundry debtors Average Receivable

-------------------------------- Period
× 365
Net credit sales
2021 53.34 40
---------× 365
484.49
2022 72.96 41
----------×365
652.22

Interpretation
In your case, the account receivable period for 2021 was 40 days and for 2022 it
was 41days . This means that on average, it took your company 40 days in 2021 and 41
days in 2022 to collect payment from its customers after a sale has been made.

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 Operating cycle :

Operating cycle Inventory period

+
Account Receivable period

Year Inventory period Operating

+ cycle
Account Receivable period

2021 228 + 40 268

2022 223 + 41 269

Interpretation :

In your case, the inventory period for 2021 was 228 days and for 2022 it was 223
days . The account receivable period for 2021 was 40 days and for 2022 it was 41
days . Therefore, the operating cycle for 2021 was 268 days and for 2022 it was 269
days

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5. Cash cycle

The cash cycle (CC) – also known as the cash cycle – is a metric expressing how many
days it takes a company to convert the cash it spends on inventory back into cash by
selling its product.

Formula
Cash cycle Operating Cycle – Account Payable
Period

Table 5: Statement Showing the Cash cycle of Hle Glascoat Company Ltd.
(` In Crores)

Year Operating Cycle – Account

Payable Period
2021 268 - 117 151

2022 269 - 110 159

Interpretation:

the time it takes for a company to convert its investments in inventory and other resources
into cash. The operating cycle is the time it takes for a company to convert its investments in
inventory and accounts receivable into cash. The account payable period is the time it takes
for a company to pay off its accounts payable. The operating cycle minus the account payable
period is the cash cycle

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BALANCE SHEET OF HLE GLASCOAT

BALANCE SHEET OF HLE GLASCOAT Mar-22 Mar-21 Mar-20

(in Rs. Cr.)
12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 13.65 13.08 12.93
TOTAL SHARE CAPITAL 13.65 13.08 12.93
Reserves and Surplus 228.16 88.77 50.24
TOTAL RESERVES AND SURPLUS 228.16 88.77 50.24
TOTAL SHAREHOLDERS FUNDS 241.81 121.85 63.17
Minority Interest 0.08 0.12 1.37
NON-CURRENT LIABILITIES
Long Term Borrowings 129.82 55.19 54.27
Deferred Tax Liabilities [Net] 3.72 3.33 3.42
Other Long Term Liabilities 12.17 0.02 0.16
Long Term Provisions 19.82 0.45 0.40
TOTAL NON-CURRENT LIABILITIES 165.54 58.99 58.25
CURRENT LIABILITIES
Short Term Borrowings 77.27 21.55 29.37
Trade Payables 132.14 72.14 75.43
Other Current Liabilities 123.37 86.98 93.43
Short Term Provisions 8.53 2.65 1.52
TOTAL CURRENT LIABILITIES 341.30 183.32 199.74
TOTAL CAPITAL AND LIABILITIES 760.45 377.11 335.37
ASSETS
NON-CURRENT ASSETS
Tangible Assets 240.84 116.20 89.82
Intangible Assets 3.75 3.80 4.47
Capital Work-In-Progress 31.15 3.12 10.01
FIXED ASSETS 275.74 123.12 104.29

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Non-Current Investments 0.00 0.00 0.00

Deferred Tax Assets [Net] 0.39 0.00 0.00
Long Term Loans And Advances 0.00 0.00 0.00
Other Non-Current Assets 4.61 4.97 2.32
TOTAL NON-CURRENT ASSETS 281.22 128.09 106.61
CURRENT ASSETS
Current Investments 0.00 0.00 0.00
Inventories 268.03 147.64 153.45
Trade Receivables 147.99 69.18 44.11
Cash And Cash Equivalents 39.38 20.52 9.79
Short Term Loans And Advances 0.17 0.21 0.31
OtherCurrentAssets 23.65 11.47 21.10
TOTAL CURRENT ASSETS 479.23 249.02 228.77
TOTAL ASSETS 760.45 377.11 335.37
OTHER ADDITIONAL INFORMATION
CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 0.00 0.00 72.82
BONUS DETAILS
Bonus Equity Share Capital 0.14 0.14 0.00
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market 0.00 0.00 0.00
Value
Non-Current Investments Unquoted Book 0.00 0.00 0.00
Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value 0.00 0.00 0.00
Current Investments Unquoted Book Value 0.00 0.00 0.00

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PROFIT & LOSS ACCOUNT OF HLE GLASCOAT

PROFIT & LOSS ACCOUNT 23-Mar 22-Mar 21-Mar

OF HLE GLASCOAT (in Rs. Cr.)
12 mths 12 mths 12 mths
INCOME
REVENUE FROM 931.52 646.29 481.41
OPERATIONS [GROSS]
Less: Excise/Sevice Tax/Other 0 0 0
Levies
REVENUE FROM 931.52 646.29 481.41
OPERATIONS [NET]
TOTAL OPERATING 931.52 652.22 484.49
REVENUES
Other Income 8.05 8.04 3.93
TOTAL REVENUE 939.57 660.25 488.42
EXPENSES
Cost Of Materials Consumed 424.86 339.08 230.42
Purchase Of Stock-In Trade 0 0 0
Operating And Direct Expenses 0 0 0
Changes In Inventories Of 7.76 -20.48 6.38
FGWIP And Stock In Trade
Employee Benefit Expenses 147.56 67.27 36.36
Finance Costs 23.05 13.11 9.74
Depreciation And Amortisation 22.7 11.23 8.61
Expenses
Other Expenses 214.32 156.63 119.68
TOTAL EXPENSES 840.25 566.83 411.18
PROFIT/LOSS BEFORE 99.33 93.43 77.24
EXCEPTIONAL,
EXTRAORDINARY ITEMS
AND TAX
Exceptional Items 0 -9.11 0
PROFIT/LOSS BEFORE TAX 99.33 84.31 77.24
TAX EXPENSES-CONTINUED
OPERATIONS
Current Tax 29.52 25.7 23.96
Less: MAT Credit Entitlement 0 0 0
Deferred Tax 0 0.39 -0.09
Other Direct Taxes 0 0 0
TOTAL TAX EXPENSES 29.52 26.08 23.87

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PROFIT/LOSS AFTER TAX 69.81 58.23 53.37

AND BEFORE
EXTRAORDINARY ITEMS
PROFIT/LOSS FROM 69.81 58.23 53.37
CONTINUING OPERATIONS
PROFIT/LOSS FOR THE 69.81 58.23 53.37
PERIOD
Minority Interest 0.01 -0.06 -1.05
CONSOLIDATED 69.81 58.17 52.32
PROFIT/LOSS AFTER MI AND
ASSOCIATES
OTHER ADDITIONAL
INFORMATION
EARNINGS PER SHARE
Basic EPS (Rs.) 10 43 41
Diluted EPS (Rs.) 10 43 41
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 0 5.38 3.23
Tax On Dividend 0 0 0

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Conclusion :
Based on the information you provided, it seems that the company has more current assets
than current liabilities in both years. The higher the current ratio, the better it is for the
company as it indicates that it has enough liquidity to meet its short-term obligations.

The inventory period for 2021 is 228 days and for 2022 it is 223 days. This means that the
company takes approximately 228 days in 2021 and 223 days in 2022 to sell its current
inventory or how long inventory remains unsold.

The Debtors Turnover Ratio for 2021 was 9.08 times and for 2022 it was 8.93 times. This
means that in 2021, the company collected its trade receivables 9.08 times on average during
the year and in 2022 it collected its trade receivables 8.93 times on average during the year.

The account receivable period for 2021 was 40 days and for 2022 it was 41days. This means
that on average, it took your company 40 days in 2021 and 41 days in 2022 to collect
payment from its customers after a sale has been made.

The operating cycle for 2021 was 268 days and for 2022 it was 269 days which is calculated
by adding the inventory period and account receivable period together.

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