Apeejay Institute of Management &

Engineering Technical Campus

Assignment-1

Topic- financial statement of public limited company.

Submitted by: - Submitted to: -

Name -Sonu Kumar Mr. gurpreet Singh

Class- MBA(1A)
Roll no-221139
 Meaning of financial statements
Financial statements refer to reports prepared to evaluate the performance,
financial health and the liquidity position of the business. Financial statements
are prepared using the transactions accounted in the books of the account. In
simple words, all the accounting data is consolidated into a financial statement
in a manner which is generally accepted and understood.

Users of financial statements

Financial statements are used by internal users as well as external users. The
financial statements depict the overall financial health of the business and help
users to make better business decisions.

 Internal users:Internal users of financial statements are management,

employees, Owners etc.
 External users:Regulatory, tax authorities, banks, unions, investors,
creditors etc. are the external users of financial statement.

Types of financial statements

Using the accounting records, 3 types of financial statements are
prepared by the company. These 3 types of financial statements provide
insights about the financial health, profitability and liquidity of the
business. Following are the 3 types of financial statement:

 Balance sheet
 Profit and loss account
 Cash flow statements (CFS)
  Balance sheet: IT is a type of financial statement that summarizes the
company’s assets, liabilities and the amount owned by the business
owners. This financial statement broadly consists of assets and liabilities.
A balance sheet helps the stakeholders to evaluate the efficiency in
working capital, asset portfolio and the financial strength.

 Profit and loss account: This statement reveals the performance of the

business in terms of profit or loss for a specified period. Using this
financial statement, net profit is calculated after considering the gross
profit/loss and all other indirect expenses or incomes.

 Cash flow statements: Cash flow statement projects the organization

ability to generate cash inflow, cash outflows to meet its obligations or
commitments and investment.

Why I choose this company for assignment-

I am choosing SBI CARD for assignment because I have invested in this
company since a long time. and I have also use this company services like credit
card.

History of SBI card and payment services private limited

SBI Card was launched in October 1998 by the State Bank of India and GE
Capital. Incorporated as SBI Cards and Payment Services Private Limited
(SBICPSL), SBI Card is headquartered in Gurgaon, Haryana.
In December 2017, State Bank of India and The Carlyle Group acquired GE
Capital`s stake in SBI Card.The company changed its legal name to SBI Cards
and Payments Services Limited in August 2019. In March 2020, SBI Card
became the first pure play credit card company to list on the stock exchanges in
India.

The aim of SBI Card is to offer Indian consumers access to a wide range of
world-class, value-added payment products and services. Our endeavor is to
simplify the lives of our customers, employees and other important
stakeholders.

Our innovative products and services along with our responsible corporate
citizenship practices form the framework of delivering on this promise.

Within a short span of 10 months from inception, we achieved a credit card

customer base of 1 lakh. We entered the '1Million Card Club’ in 2002 and
crossed the 2 million card base in 2005

SBI Card: SBI Card, with over 1.4 crore active credit cards (as of June 2022), is
the second-largest credit card issuer in the country after HDFC Bank

Business model of SBI card

Business model is unique as it is the only company in India having pure credit
card business whereas for other banks, credit card business is done via bank
only and there is no separate subsidiary for the same business. Hence, SBI
Cards enjoys superior return ratios—ROE (return on equity) and ROA (return
on assets) of 36.5 per cent and 6.7 per cent (for nine months FY20) on the total
asset base In March 2020, SBI Card became the first pure play credit card
company to list on the stock exchanges in India. The aim of SBI Card is to offer
Indian consumers access to a wide range of world-class, value-added payment
products and services. Our endeavor is to simplify the lives of our customers,
employees and other important stakeholders of Rs 24,600 crore,” said Raheja.

SBI Cards and Payment Services Limited Statement of

Profit and Loss for the quarter and the year ended March
31, 2022
Financial indicators which help for decision making
Total revenue
If you want to know how much money your business makes from all the
product and services you sell, you need to track your total revenue. Total
revenue tells you exactly how much money your business generates before
expenses and since revenue is key for growth it’s a matric that every startup
needs to track and understand
The main source of the SBI CARD payment services private limited is a
interest. So the interest income is a main sources of the company because the
business model of the company is issuing the credit card.
In last year 31march 2021 the total revenue of the company is 9713.58cr
but in current year 31 march2022 the total revenue of the company is
11301.52cr. it is increased by 1587.94cr. it is good sign for growth of the
company

Total Expenses
A company's expenses are how much a company is spending before its net
income. This is a useful metric to compare a company spending habits over
time. Starting from the income statement, a company may have a considerable
amount of revenues. As an investor goes down the Income Statement, gradually
line items such as

Cost of Goods Sold,

Research and Development,
Selling, General & Admin,
Depreciation,
and other Expenses

In last year 31 march 2021 the total expense of the company is 8389.85cr in
current year 31 march 2022 it is increased by 739.51cr. increased in total
expense is not higher than total revenue so it is normal phenomena but in
case total expense is increased more than total revenue it affects your
decision making.

Profit after tax

Taxes are integral parts of every business unit. Therefore, the Indian
Government has introduced Profit After Tax (PAT) to evaluate the amount of
 money that remains with you once you are done paying off all their taxes. It is
simply the profit amount left with the shareholders of organisations, including
private limited, public limited, government-owned, privately-owned companies
after they have paid their taxes.
In the current year company paid 556.02cr total taxes. And the profit after
tax is 1616.14cr

Total comprehensive income

Total comprehensive income shows all changes in equity other than those
originating from contributions from or distribution to owners. In the financial
statements, comprehensive income is equivalent to net income plus other
comprehensive income.

Important comprehensive income. It reports the total of all operating and

financial events that could potentially affect the owner’s interest in the business.

We calculate total comprehensive income by adding net income to other

comprehensive components.

Total comprehensive income = Net income + Other comprehensive

income

Components of total comprehensive income

Several items fall into other comprehensive income, including:

 Unrealized gains and losses from available-for-sale securities.

 Unrealized gains or losses from hedging derivative contracts
 Adjustment of foreign currency translations.
 Certain costs associated with the post-retirement defined benefit plan.

The total comprehensive income increased by the 628.97cr in current year.

the company is rapidly increase the total income year on year because of
the market leader of credit card industry.

Earning per share (EPS)

Earnings per share (EPS) is calculated as a company's profit divided by the
outstanding shares of its common stock. The resulting number serves as an
indicator of a company's profitability. It is common for a company to report
EPS that is adjusted for extraordinary items and potential share dilution.

The higher a company's EPS, the more profitable it is considered to be.

KEY TAKEAWAYS

 Earnings per share (EPS) is a company's net profit divided by the number
of common shares it has outstanding.
 EPS indicates how much money a company makes for each share of its
stock and is a widely used metric for estimating corporate value.
 A higher EPS indicates greater value because investors will pay more for
a company's shares if they think the company has higher profits relative
to its share price.

EPS is very important aspect for companies as well as shareholders point view.

What is a balance sheet?

A balance sheet is a financial document that states a business’ assets,
liabilities, and stockholder equity, and is shared either on a monthly or
quarterly basis. The main benefit of a balance sheet is to know what a business
is worth.

Several key stakeholders could request a balance sheet from you. For example,
your local tax agency might randomly select your business for an audit. A
balance sheet with a list of assets and liabilities can help an auditor get a clear
picture of your business’ financial position.

What’s the purpose of a balance sheet?

A balance sheet can help you obtain a loan, establish a value for your business,
and keep financial records organized for tax agencies.

1. Obtain credit/debt from a lender

When a lender or bank is deciding whether to provide credit to a business, a
balance sheet helps them estimate risk. Lenders typically look at liabilities to
ensure that a business isn’t overextending itself financially—lenders want to
make their money back. If existing debts (i.e., liabilities) are much higher than
assets, a lender may hesitate to extend further credit.

2. To set a business valuation

If someone is looking to acquire your business, they’ll request a balance sheet to
help understand your financial position.

Other aspects involved in setting a business valuation include the size of your
customer base relative to the industry, competitive advantages, the employees
and executives of your company (particularly during “acquihire” valuations),
year-over-year growth, and revenue and profit.

3. Detail a business’ financial position over time

A balance sheet can help you understand whether your business has more assets
or liabilities at a moment in time.

Over the years, your balance sheet will also include historical data, which can
help you—or your lenders or your investors—evaluate your financial strengths
and weaknesses, and how they’ve changed over time.

Uses of balance sheet

A balance sheet, financial statement condition, or financial statement

position is a brief of individual financial balances or organization
balances. These organizations include government, partnership, private
company, corporation, and nonprofit entity. It consists of liabilities,
assets, and ownership equity that are listed on a specific time, like at
the end of the financial year. A balance sheet is the only financial
statement that has a single point in the calendar during business time.
An example of a balance sheet is for a standard company that has two
parts. Assets and finance are on the left, while ownership and
liabilities are on the right. The major groups of assets are the first to
be listed, followed in liquidity order. Let us review how to balance
shit is used.
1. Determine net worth
Net worth is the wealth measured of a person, entity, corporation,
countries, and sectors. It is also described as the difference between
liabilities and assets. In addition, net worth is used to measure the
health of the company by giving a current picture of the company’s
financial position. The difference between total assets and liabilities
are computed to show the richness and poor of the firm.

2. Identify possibilities
Business investors or owners are curious to know if they will make a
profit from their investment. These returns may be in dividend form.
Dividends are only given to firms that make profits as well as have
enough retained earnings. A balance sheet is used to the remaining
amount of earnings retained. You are able to determine if the
organization is making retained earnings or not through looking at the
balance sheet .

3. Check for future operation

Future operation is meant to improve business operation, such as
adopting digital concepts. Moreover, future operations help to explore
the results of an industrial revolution that is changing the current
nature of business operations, and leaders’ role in all industries. A
balance sheet is able to determine the future operation of the business.
This is done by checking at the values of non-current assets like
equipment, property, and plant .

4. Check the working capital

Capital is a financial asset like funds that are put in deposit accounts
or got from financial sources like banks. It is connected with a
company’s capital asset, which needs a good amount of funds to
expand or finance. On the other side, capital assets are assets of a
long-time business or current portion on the balance sheet. These
include cash equivalents, cash, and production equipment,
manufacturing facilities, market securities, and storage facilities. The
balance sheet is used to check if sufficient business capital maintains
its function.

Now we will discuss the financial statement for decision making

SBI Cards and Payment Services Limited
Balance Sheet as at March 31, 2022
First of all we will use the ratio analysis in the diven balance sheet. The
meaning of ratio analysis given below

Ratio analysis
Ratio analysis is a quantitative analysis of data enclosed in an enterprise’s
financial statements. It is used to assess multiple perspectives of an enterprise’s
working and financial performance such as its liquidity, turnover, solvency and
profitability.
To put it in other words, Ratio analysis is the method of analysing and
comparing financial data by computing meaningful financial statement value
percentages rather than comparing line items from each financial statement.

Advantages of Ratio Analysis are as follows:

 Helps in forecasting and planning by performing trend analysis.
 Helps in estimating budget for the firm by analysing previous trends.
 It helps in determining how efficiently a firm or an organisation is
operating.
 It provides significant information to users of accounting information
regarding the performance of the business.
 It helps in comparison of two or more firms.
 It helps in determining both liquidity and long term solvency of the firm.

Price-to-Earnings ratio(P/E)
Price-to-Earnings ratio, P/E Multiple, or P/E Ratio is an important valuation
multiple that is defined as:

P/E = Market Capitalization / Net Income

or, using per-share numbers:

P/E = Stock Price / Earnings Per Share (EPS)

Applying the above formula, P/E ratio of SBI CARDS AND PAYMENT
SERVICES is calculated as :
Current Market Cap [ ₹80,963.4 Cr] as on Oct 17,2022

(/) Earnings [ ₹1,938.5 Cr] based on TTM-Standalone Results

(=) P/E Ratio [ 41.77x ]

P/E Ratio indicates the multiple of earnings investors are willing to pay to own
one share of the company.

Thus, for SBI CARDS AND PAYMENT SERVICES , the investors are
currently willing to pay 41.77 times earnings to own 1 share of the company.

PE Multiples are the most widely used valuation multiple in practice.

Since P/E ratio uses Net Income in the calculation, P/E multiples are not always
reliable for valuing companies with negative earnings.
The chart below summarizes the trend in P/E Ratio of SBI CARDS AND
PAYMENT

Price-to-Book ratio(P/B)
Price-to-Book ratio, P/B Multiple, or P/B Ratio is an important valuation
multiple that is defined as:

P/B = Market Capitalization / Book Value

or, using per-share numbers:
P/B = Stock Price / Book Value Per Share

Applying the above formula, P/B ratio of SBI CARDS AND PAYMENT
SERVICES is calculated as :

Current Market Cap [ ₹80,963.4 Cr] as on Oct 17,2022

(/) Book Value [ ₹7,704.7 Cr] based on Mar2022 - Standalone Results

(=) P/B Ratio [ 10.51x ]

P/B Ratio indicates 'the multiple of book value' investors are willing to pay to
own one share of the company.
Thus, for SBI CARDS AND PAYMENT SERVICES , the investors are
currently willing to pay '10.51 times book value' to own 1 share of the company.

PB Multiples are one of the most widely used valuation multiple in industry.

Since P/B ratio uses Book Value in the calculation, P/B multiples are not always
reliable for valuing companies with negative book value.
In such cases, you may consider using Price to Earnings ratio or Price to
Sales ratio of SBI CARDS AND PAYMENT SERVICES !

The chart below summarizes the trend in P/B Ratio of SBI CARDS AND
PAYMENT
Return on equity ratio, or ROE, is a profitability ratio that helps measure the
efficiency of a firm and its management in handling shareholders' money. The
ratio gives an insight into the ability of the firm to generate profits from
shareholders’ investment. It is calculated by dividing the net income by
shareholders' equity.

 simpler words, the return on equity ratio shows how much profit each rupee of
stockholder money generates. For instance, an ROE of 1 means that every rupee
of shareholder investment in the business would generates Re 1 net income. It is
a measure of how effective the management is in using equity financing to
fund its operations. Thus, the higher the ROE, the more efficient is the
management in generating income and growth from its equity financing. ROE is
an important indicator for potential investors, since they want to see how
efficiently a company will use their money to generate profit. The ratio is often
used to compare health of a business with its peers and the broader market.

SBI Cards and Payment Services ROE % Calculation

SBI Cards and Payment Services's annualized ROE % for the fiscal year that
ended in Mar. 2022 is calculated as
RO Net Total Stockholders /
( (Total Stockholders
E = Income (A: / + Equity (A: Mar. cou
Equity (A: Mar. 2021 )
% Mar. 2022 ) 2022 )) nt )

= 16161.4 / ( (63020.3 + 77527) /2)

= 16161.4 / 70273.65

= 23.00 %

The historical rank and industry rank for SBI Cards and Payment Services's
ROE % or its related term are showing as below:
NSE:SBICARD' s ROE % Range Over the Past 10 Years
Min: 16.91   Med: 26.81   Max: 31.62
Current: 26.88
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage,
it is important to watch the equity multiplier when investing in high ROE %
companies. Like ROA %, ROE % is calculated with only 12 months data.
Fluctuations in company's earnings or business cycles can affect the ratio
drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings.
Their ROE %s can be extremely high.
Market Cap
Market cap is the total market value to buy the whole company. It is equal to the
share price times the number of Shares Outstanding (EOP). SBI Cards and
Payment Services's share price for the quarter that ended in Sep.
2022 was ₹913.5. SBI Cards and Payment Services's Shares Outstanding
(EOP) for the quarter that ended in Sep. 2022 was 943 Mil. Therefore, SBI
Cards and Payment Services's market cap for the quarter that ended in Sep.
2022 was ₹861,740 Mil.
SBI Cards and Payment Services's quarterly market cap declined from Mar.
2022 (₹803,300 Mil) to Jun. 2022 (₹724,661 Mil) but then increased from Jun.
2022 (₹724,661 Mil) to Sep. 2022 (₹861,740 Mil).
SBI Cards and Payment Services's annual market cap increased from Mar.
2020 (₹580,886 Mil) to Mar. 2021 (₹873,042 Mil) but then declined from Mar.
2021 (₹873,042 Mil) to Mar. 2022 (₹803,300 Mil).
Enterprise Value is the theoretical takeover price. It is more comprehensive than
market capitalization (market cap), which only includes common equity.
Enterprise Value is calculated as the market cap plus debt and minority interest
and preferred shares, minus total cash and cash equivalents. SBI Cards and
Payment Services's Enterprise Value for Today is ₹1,061,150 Mil.
ROA %
ROA % is calculated as Net Income divided by its average Total Assets over a
certain period of time. SBI Cards and Payment Services's annualized Net
Income for the quarter that ended in Sep. 2022 was ₹21,066 Mil. SBI Cards
and Payment Services's average Total Assets over the quarter that ended
in Sep. 2022 was ₹415,811 Mil. Therefore, SBI Cards and Payment
Services's annualized ROA % for the quarter that ended in Sep.
2022 was 5.07%.
The historical rank and industry rank for SBI Cards and Payment Services's
ROA % or its related term are showing as below:
NSE:SBICARD' s ROA % Range Over the Past 10 Years
Min: 3.46   Med: 4.69   Max: 6.03
Current: 6.03
SBI Cards and Payment Services ROA % Calculation
SBI Cards and Payment Services's annualized ROA % for the fiscal year that
ended in Mar. 2022 is calculated as:
/
ROA Net Income (A: ( (Total Assets (A: Total Assets (A:
= / + coun
% Mar. 2022 ) Mar. 2021 ) Mar. 2022 ))
t)

= 16161.4 / ( (270128.6 + 346484.3) /2)

= 16161.4 / 308306.45

= 5.24 %

Debt to equity ratio

A high debt to equity ratio generally means that a company has been aggressive
in financing its growth with debt. This can result in volatile earnings as a result
of the additional interest expense.
SBI Cards and Payment Services Debt-to-Equity Calculation
Debt to Equity measures the financial leverage a company has.
SBI Cards and Payment Services's Debt to Equity Ratio for the fiscal year that
ended in Mar. 2022 is calculated as
Total
Debt to
= Total Debt / Stockholders
Equity
Equity

(Short-Term Debt & Long-Term Debt & Total

= Capital Lease + Capital Lease / Stockholders
Obligation Obligation) Equity

= (0 + 232849.1) / 77527

= 3.00

The historical rank and industry rank for SBI Cards and Payment Services's
Debt-to-Equity or its related term are showing as below:
 NSE:SBICARD' s Debt-to-Equity Range Over the Past 10 Years
Min: 2.67   Med: 3.23   Max: 5.71
Current: 3.16

In general, a lower D/E ratio is preferred as it indicates less debt on a

company's balance sheet. However, this will also vary depending on the stage
of the company's growth and its industry sector. Newer and growing companies
often use debt to fuel growth, for instance. D/E ratios should always be
considered on a relative basis compared to industry peers or to the same
company at different points in time.

If a company cannot pay the interest and principal on its debts, whether as
loans to a bank or in the form of bonds, it can lead to a credit event. In the
event of a default, the company may be forced into bankruptcy. The D/E ratio
is one way to look for red flags that a company is in trouble in this respect.

The above ratio gives you a valuation and profitability of the sbi card. You
can use the ratio for investing and also you can see the growth of the
company. Ratio is a play vital for external and internal interested parties.
Now we will discuss the swot analysis of the company.
SWOT ANALYSIS : SBI CARDS

SWOT means

S – Strength of a company

W- Weakness of a company

O- Opportunities available for a company

T – Threats for a company

Now we will analyse the SBI card investment purpose.

Price Summary

TODAY'S HIGH TODAY'S LOW 52 WEEK HIGH 52 WEEK LOW

₹ 820.75 ₹ 801.45 ₹ 1,114.95 ₹ 655.70

The above figures shows the current price of the company and current low price
of the company and it is also show the 1 year high price and 1 year low price .
Share Holding Pattern

CONCLUSION
IN ABOVE ANAYLSIS WE GIVES THE ALL ASPECTS REGARDING THE
BEST DECISION MAKING. THE ABOVE ANAYLSIS NOT RECOMAND
TO BUY OR SELL THE STOCK . THIS IS ONLY FOR EDUCATION
PURPOSE. THIS IS A MARKET LEADER COMPANY BECAUSE IT IS
ONLY COMPANY WHO LIST IN STOCK MARKET. AND THIS IS VERY
BIG ADVANTAGE OF THE

REFERENCE
https://in.investing.com/equities/sbi-cards-and-payment-services-ltd
https://www.sbicard.com/en/who-we-are/about-us.page
https://ticker.finology.in
WWW.GURUFOCUS.COM
HTTPS://ECONOMICTIMES.INDIATIMES.COM/MARKETS/STOCKS/
NEWS/WHAT-IS-ROE/ARTICLESHOW/72992449.CMS
HTTPS://WWW.SMART-INVESTING.IN/BALANCE-SHEET.PHP?
COMPANY=SBI+CARDS+AND+PAYMENT+SERVICES+LTD