PROJECT REPORT

M.Com IV Sem – Accounting

(Session 2020-21)

THE BHOPAL SCHOOL OF SOCIAL SCIENCES

Submitted To Submitted By

Dr. Amrita Sahu Chris Mathews

Associate Professor Roll No.- 19103014

Department of Commerce
 2 CERTIFICATE FROM THE PROJECT
GUIDE

This is to certify that the Project Report titled “PUMA” is a bonafide work of Chris Mathews
enrolment number R170190280210 undertaken for the partial fulfillment of Masters in
Commerce (M. Com) degree of Barkatullah University under my guidance. This project work
is original and has not been submitted earlier for the award of any degree or diploma of any
other University or Institution.

3 Signature of the
Guide
4 Dr. Amrita Sahu
5 Associate Professor
Department of Commerce,
BSSS, Bhopal
 6 DECLARATION

I Chris Mathews son of K.J Mathews certify that the project report entitled on
“PUMA”, prepared by me is my personal and is authentic work under the guidance of Dr.
Amrita Sahu,Associate Professor, Department of Commerce.

Date: 15/06/2021 Signature of the Student

Place: BHOPAL Name: Chris Mathews
Class: M.COM (IV
SEMESTER)
Roll Number:
19103014

1
 INDEX

S.No. Particulars
1. Introduction
2. Mission
3. Financial Performance
4. History
5. Objective of Analysis
6. Problems Faced by Puma
7. Balance Sheet
8. Calculation of Financial Data
9. Suggestion
10. Conclusion
11. References

❖ INTRODUCTION
Puma SE, branded as Puma, is a German multinational corporation that designs and
manufactures athletic and casual footwear, apparel
and accessories, which is headquartered
in Herzogenaurach, Bavaria, Germany. Puma is the
third largest sportswear manufacturer in the world.
The company was founded in 1948 by Rudolf
Dassler. In 1924, Rudolf and his brother Adolf
"Adi" Dassler had jointly formed the
company Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory). The relationship
between the two brothers deteriorated until the two agreed to split in 1948, forming two
separate entities, Adidas and Puma. Both companies are currently based in Herzogenaurach,
Germany.

Puma has been a public company since 1986, listed on the Frankfurt Stock Exchange.

As of 2017, Puma SE employs more than 13,000 people worldwide and distributes its products
in more than 120 countries.

Following the split from his brother, Rudolf originally registered the newly established
company as Ruda (derived from Rudolf Dassler, as Adidas was based on Adi Dassler), but
later changed the name to Puma. Puma's earliest logo consisted of a square and beast jumping
through a D, which was registered, along with the company's name, in 1948. Puma's shoe and
clothing designs feature the Puma logo and the distinctive "Formstrip" which was introduced
in 1958.

❖ MISSION
“FOREVER FASTER”

Forever Faster is more than being quick. It is our mantra. It is more than 70 years of fast
products for fast athletes. We aim high, and when we score our goals, we aim even higher. All
to achieve one thing: to be the Fastest Sports Brand in the World.

❖ FINANCIAL PERFORMANCE
 FINANCIAL STATEMENTS

The Financial statements are the name given to income statement which is nothing, but profit
& loss a/c and the position statement of an enterprise known as the Balance sheet. These
statements show the financial position of the business in a systematic manner. The Income
statement reveals the net result of the organization during an accounting period and the Balance
sheet shows the position of a company on a particular date, usually at the end of a financial
year.
One account is usually prepared in the case of large business houses known as Trading and
Profit & Loss account for knowing gross profit, operating profit, and net
profit. On the contrary, in the case of small sized business houses, this account is prepared in two parts
namely Trading
Account and Profit & Loss Account. Trading account is prepared to know the gross profit of
the business and Profit and Loss Account is prepared to find out the net profit of the business.
The Balance sheet reveals the position of various assets and liabilities of an organization at a
particular time.
The financial statements are prepared to ascertain whether the organization has earned adequate
profit and to know whether the profits have increased or decreased in comparison with
the previous years. This comparison will help the organization to take corrective steps in
advance. The financial statement helps to analyze the capacity of the organization to repay its
short and long term liabilities. The comparison of data of two or more years of an organization
will give inputs for the future growth of the business house. Various stakeholders who are keen to know
the financial statement of an organization such as external capital providers,shareholders, government
departments, suppliers, existing and
future potential investors,lenders,client, employees, creditors, employees, competitors, and stockbrokers.

Horizontal Analysis

Horizontal analysis is used in the Analysis of financial statement to compare historical data of
various years to know the increase or decrease of performance of various periods. This
can either use absolute comparisons of percentage comparisons in which the figures in
each succeeding period are expressed as a percentage of the amount in the base year. The base
year amount is kept as 100% and it is been compared with the current year figures. This is
known as the base year analysis. This horizontal analysis of financial statements over different
periods allows investors to see what is been driving a company’s financial performance over a
number of years and also identifying trends and growth patterns such a seasonality.

Trend Analysis

Trend Analysis estimates an organization’s financial position over a period of time. Depending
on the circumstances, periods taken for this research may be measured in years, quarters
or months. But the main goal is to calculate and analyse the change in absolute amount and
change in percentage form from one period to the next.

❖ HISTORY

1948

NEW BEGINNINGS

28 years after founding their company, the Dassler

brothers fell out and went separate ways. Rudolf
Dassler moved into another building, which belonged
to the family. Together with 14 employees, he
transformed this storage facility into a factory and
founded his own company:

The “Sportschuhfabrik Rudolf Dassler (RUDA)” was

registered as a business in January 1948, commencing operations a few months later on June 1,
1948. It took another four months until the PUMA brand was born:
on October 1, 1948 “PUMA” was registered at the German Patent
and Trademark Office. In December 1948, in a letter to partners
and customers, Rudolf Dassler announced his decision to name the
company “PUMA Schuhfabrik Rudolf Dassler”. The details of the
new company were added to Germany’s commercial register on
January 14, 1949.
Even though he had to start from scratch, Rudolf Dassler’s success continued. PUMA’s first
football boot, the “ATOM”, convinced many athletes of its qualities. Several members of West
Germany’s national team wore this boot during the country’s first post-war football match, a 1-
0 win against Switzerland in 1950. Among the players: Herbert Burdenski, who scored the
winning goal. From that moment on, the history of sports and the history of the company became
inseparable.

1952

INNOVATING FOOTBALL

The launch of PUMA’s SUPER ATOM in 1952 creates a stir. Rudolf Dassler collaborates with
experts, such as West Germany’s national coach Sepp Herberger to develop the world’s first boot
with screw-in studs. For PUMA, beside a successful product launch, it marks the beginning of
our football heritage.

1954

GROWING HERITAGE

PUMA BRASIL shoes score just as

successfully as their predecessor. After
equipping a majority of the German
Bundesliga team Hannover 96, the
team wins the German league in May
1954, beating the favored FC
Kaiserslautern in the final. We
celebrate our shared success with the
advertisement campaign “So war es in Hamburg”.

1958
ELEMENTAL DESIGN

Just a year later, the second brand logo is patented: the "formstrip", originally created to stabilize
the foot inside the shoe, is now a
typical PUMA trademark found
on almost all PUMA shoes and is
used as a design element on our
apparel products. And it's just on
time too: Thanks to emerging
media, the formstrip can be seen
all over the world!

With Brazil taking home the cup

during the Football World
Championship, PUMA is equally
in public focus. It's a victory of
equal measure for us, as PUMA
football boots are the only
German-made football boots in the final. PUMA celebrates the victory of the Brazilian team with
an advertising campaign.
2006

WORLD CHAMPION ITALY

At the Football World Cup, PUMA sponsors 12 of

32 teams – more than any other supplier. Italy beats
France 5:3 after penalty shoot outs and for the first
time in the company's history, a PUMA-sponsored
national team becomes world football champion.

6.1 2019

6.1.1 START THE

YEAR RIGHT

The new year has just

began and PUMA introduces its new state-of-the-art technology
platform Fit Intelligence (Fi). First new product: the FI training
shoe. It employs a micromotor to power a uniquely configured
cable sys-tem that “laces” the shoe, either through simply
swiping on the Fi module up or down. For the first time ever, PUMA allows tech-savy people to
participating in the beta testing to help the brand think of ways making it smarter and more
powerful.

❖ PRODUCTS :-

SHOES
CLOTHING
ACCESSORIES
GLOVES, HELMET,
WATERBOTTLES
T-SHIRTS, BOXERS, TRACKS
FANCY FOOTWEARS
 ❖ Objective of Analysis
➢ To know the financial position/ changes in revenue during Covid 19

❖ PROBLEMS FACED BY PUMA

Just like any other business, Puma has suffered in the global economic recession after
the Covid-19 Pandemic hit us. Though they have enough to regain their losses, it is never wise
for a brand to get cocky because a few slip-ups combine to make a big one.

Counterfeiting is a serious threat that causes Puma to lose many potential sales. Puma knock
offs are easily found in a lot of markets.

The toll from COVID-19 on the apparel sector has been widening. Puma SE have flagged significant
store closures in China resulting from reduced customer activity.

Most apparel and footwear firms face a potential double impact from the virus. On top of losing sales
in World, there is the potential drag to global supply chains resulting from reduced factory activity.

BALANCE SHEET

Fiscal year is January-December. All values EUR 2019 2018 2017 2016
Millions.
Cash & Short Term Investments 518 536 439 406
Cash Only 518 464 415 327
Short-Term Investments - 73 24 79
Cash & Short Term Investments Growth -3.39% 22.30% 8.14% -
Cash & ST Investments / Total Assets 11.83% 16.62% 15.28% 14.58%
Total Accounts Receivable 713 653 582 574
Accounts Receivables, Net 612 554 504 499
Accounts Receivables, Gross 649 591 546 542
Bad Debt/Doubtful Accounts (37) (38) (42) (43)
Other Receivables 102 99 78 75
Accounts Receivable Growth 9.22% 12.26% 1.32% -
Accounts Receivable Turnover 7.71 7.12 7.11 6.32
Inventories 1,110 915 779 719
Finished Goods 1,053 897 766 699
Raw Materials 19 18 12 20
Progress Payments & Other 39 - - -
Other Current Assets 140 88 86 67
Prepaid Expenses 63 50 43 32
Miscellaneous Current Assets 77 39 43 35
Total Current Assets 2,481 2,193 1,885 1,765
Net Property, Plant & Equipment 1,114 295 260 252
Property, Plant & Equipment - Gross 1,492 620 550 560
Buildings 171 169 132 167
Machinery & Equipment 510 32 19 18
Construction in Progress 92 15 38 17
Other Property, Plant & Equipment - 404 360 357
Accumulated Depreciation 378 325 289 308
Buildings 53 48 42 59
Machinery & Equipment 325 11 9 8
Other Property, Plant & Equipment - 267 238 241
Total Investments and Advances 45 43 68 76
LT Investment - Affiliate Companies - - 17 17
Other Long-Term Investments 45 43 52 60
Intangible Assets 455 438 413 423
Net Goodwill 250 246 242 250
Net Other Intangibles 205 192 171 173
Other Assets 46 32 20 19
Deferred Charges - - 20 19
Tangible Other Assets 46 32 - -
Total Assets 4,378 3,228 2,871 2,780
Assets - Total - Growth 35.65% 12.43% 3.25% -
Asset Turnover - - - -
Return On Average Assets - - - -
Liabilities & Shareholders' Equity
All values EUR Millions. 2019 2018 2017 2016
ST Debt & Current Portion LT Debt 155 21 29 26
Short Term Debt 10 21 29 25
Current Portion of Long Term Debt 145 1 0 0
Accounts Payable 844 705 646 581
Accounts Payable Growth 19.62% 9.16% 11.28% -
Income Tax Payable 89 68 90 41
Other Current Liabilities 471 401 291 247
Accrued Payroll 114 95 96 74
Miscellaneous Current Liabilities 357 306 195 173
Total Current Liabilities 1,559 1,195 1,057 895
Current Ratio 1.59 1.83 1.78 1.97
Quick Ratio 0.88 1.07 1.05 1.17
Cash Ratio 0.33 0.45 0.42 0.45
Long-Term Debt 764 178 28 15
Long-Term Debt excl. Capitalized Leases 163 170 28 15
Non-Convertible Debt 163 170 28 15
Capitalized Lease Obligations - 8 0 0
Provision for Risks & Charges 77 55 65 62
Deferred Taxes (185) (160) (170) (166)
Deferred Taxes - Credit 53 68 55 78
Deferred Taxes - Debit 238 228 225 245
Other Liabilities 5 9 10 8
Other Liabilities (excl. Deferred Income) 5 9 10 8
Total Liabilities 2,458 1,505 1,214 1,058
Total Liabilities / Total Assets 56.14% 46.64% 42.29% 38.06%
Common Equity (Total) 1,874 1,703 1,626 1,707
Common Stock Par/Carry Value 151 39 39 39
Additional Paid-In Capital/Capital Surplus 83 194 193 194
Retained Earnings 1,901 1,547 1,682 1,553
Cumulative Translation Adjustment/Unrealized For. (224) (226) (213) (101)
Exch. Gain
Other Appropriated Reserves (9) 34 (45) 54
Unappropriated Reserves - 145 - -
Treasury Stock (28) (29) (30) (31)
Common Equity / Total Assets 42.79% 52.77% 56.62% 61.39%
Total Shareholders' Equity 1,874 1,703 1,626 1,707
Total Shareholders' Equity / Total Assets 42.79% 52.77% 56.62% 61.39%
Accumulated Minority Interest 47 19 31 15
Total Equity 1,920 1,722 1,657 1,722
Liabilities & Shareholders' Equity 4,378 3,228 2,871 2,780

Calculation of Financial Data

Item/Year 2019 2018 2017 2016

Current Assets 2481.2 2192.8 1884.8 1765.4
Current 1558.9 1195.2 1056.5 894.9
Liabilities
Inventories 1110.2 915.1 778.5 718.9
Cash 518.1 463.7 415.0 326.7
Receivables 611.7 553.7 503.7 499.2
Total Assets 4378.2 3207.2 2853.8 2765.1
Total Liabilities 2457.9 1485.0 1197.1 1042.9
Total Equity 1920.3 1722.2 1656.7 10722.2
Sales 5502.2 4648.3 4135.9 3626.7
Cost of Goods 2815.8 2399.0 2181.5 1970.3
Sold
EBIT 440.2 337.4 244.6 127.6
Interest 48.4 34.1 32.2 26.0
 Net Income 309.0 229.8 135.8 62.4
Note: number in millions.

1. Calculation of Liquidity Ratios of (Puma)

= Liquid Assets
Current Liabilities
Liquid Assets = Current Assets – (stock+ P/P Expenses)
Liquid Liabilities = Current Liability – Bank Overdraft

Ratio/Year 2019 2018 2017 2016

Current Ratio 1.59 1.83 1.78 1.97
Quick Ratio 0.879 1.069 1.047 1.169
Cash Ratio 0.332 0.387 0.39 0.365

current ratio
2.5

1.5

0.5

0
2019 2018 2017 2016
 quick ratio
1.4

1.2

0.8

0.6

0.4

0.2

0
2019 2018 2017 2016

Cash Ratio
0.4
0.39
0.38
0.37
0.36
0.35
0.34
0.33
0.32
0.31
0.3
2019 2018 2017 2016

The liquidity ratio gives information about how the company will achieve its short-term
liabilities with the help of short-term assets. It shows if the company has enough money to
complete one operating cycle.

2. Calculation of Activity Ratios of (Puma) =

➢ Inventory / Stock Turnover Ratio = Cost of Goods Sold
Average Stock / Inventory
➢ Cost of Goods Sold = Opening Stock + Purchase + Direct Expense – Closing Stock
OR
Cost of Goods Sold = Sales – Gross Profit
OR
Cost of Goods Sold = Sales + Gross Loss

➢ Average Stock / Inventory = Opening Stock + Closing Stock

2

➢ Trade Receivable / Debtor Turnover Ratio = Net Credit Sales

Average Debtor / Trade Receivable

➢ Net Credit Sales = Total Sales - Cash Sales – Sales Return

➢ Average Debtor = Opening Debtor + Closing Debtor

2
OR
Average Debtor = Opening Debtor + Opening Bills Receivable + Closing Debtor +
Closing Bills Receivable
2

➢ Total Assets Turnover Ratio = Net Sales / Cost of Goods Sold

Total Asset

➢ Net Sales = Total Sales / Sales – Sales Return

Ratio/Year 2019 2018 2017 2016

Inventory Turnover 2.536 2.62 2.80 2.74
Receivable Turnover 8.99 8.39 8.21 7.265
Total Asset Turnover 1.256 1.449 1.449 1.31
 Inventory Turnover
2.85
2.8
2.75
2.7
2.65
2.6
2.55
2.5
2.45
2.4
2019 2018 2017 2016

receivable turnover
10
9
8
7
6
5
4
3
2
1
0
2019 2018 2017 2016
 total asset turover
1.5

1.45

1.4

1.35

1.3

1.25

1.2

1.15
2019 2018 2017 2016

The activity ratio shows you how you can manage your revenue and how to manage items in
the balance sheet. It also shows the relationship between the assets and sales.

3. Calculation of Debt Ratios of (Puma)=

➢ Total Debt = Short term Debt + Long term Debt

➢ Times Interest Earned Ratio = Earnings before Interest, tax, depreciation and
Amortized

Interest Expenses

Ratio/Year 2019 2018 2017 2016

Debt Ratio 0.56 0.463 0.419 0.377
Times Interest Earned 9.095 9.89 7.596 4.907
Ratio
 debt ratio
0.6

0.5

0.4

0.3

0.2

0.1

0
2019 2018 2017 2016

times interest earned ratio

12

10

0
2019 2018 2017 2016

The debt ratio is for the company to know the financial risk of the company. If the ratio is less
than 1 it is better and safe for the company because the risk will be less.

4. Calculation of Profitability Ratios of (Puma) =

➢ Return on Equity = Net Income

Shareholder’s Equity

➢ Return on Assets = Net Income

Total Assets
 ➢ Net Profit Margin = Revenue – Cost
Revenue

Ratio/Year 2019 2018 2017 2016

Return on 0.16 0.13 0.08 0.036
Equity
Return on Assets 0.07 0.07 0.047 0.02
Profit Margin 0.056 0.049 0.03 0.017

return on equity
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
2019 2018 2017 2016

return on assets
0.08

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0
2019 2018 2017 2016
 profit margin
0.06

0.05

0.04

0.03

0.02

0.01

0
2019 2018 2017 2016

The profitability ratio helps the company to see how much profit they are making compared to
the revenue. It also helps the company analyze how much assets they are using to generate
profit.

❖ SUGGESTIONS:

Solutions that can be taken by Puma are to improve their customers

secure by implementing more staff to respond customer mail not to neglect
their enquiries and also follow up. Puma need to keep on track with customers
and follow up investigation why they have sent the wrong product and take
immediate action by sending apologies on email then take action by proving
that Puma not neglected their comments as well. On the other hand, Puma have
can also give the customers assurance that it would not happen again, to
prove their sincerity, Puma might also provide few coupons or promo code to the
 customers for the next purchase in order to maintain their relationship with the
customers. Service solution which they also can consider are Puma can hire more
staff to focus in replying to customers feedback or email or even Puma can invest
an auto reply system. It can let the customers to get their reply instantly. Puma
should be also active in responding more to the customers on their enquiries.

❖ CONCLUSION

To sum up, Puma is one of the world’s leading sports brands. Sports are our culture.
This makes us passionate about the design, development, sale, and marketing of
footwear, clothing, and accessories. In 70 years, PUMA has built a reputation as the
maker of quick product designs for the world's fastest athletes: improving areas such
as football, running and fitness, performance-inspired golf and motorsports, and
lifestyle products. PUMA has an amazing history full of inventions, prototypes, and
products to look back on. To this day our presence can be felt in the sports and
lifestyle industries. And so we can hold it. If you ask us, creativity is the foundation
of product design
 Puma is increasing their profit every year and they are becoming more famous
(Coventry University, 2020) . The efficiency of its distribution PUMA has
continuously improved
PUMA is continuing to make progress in key areas including further changes to the
International Trade Organization of PUMA. This centrally handles global order and
invoice flow, the roll-out of a new product
production system, further standardization of ERP systems, and upgrades to the IT
network as a whole.

❖ REFRENCES:
1. https://in.puma.com/
2. https://about.puma.com/en/investor-relations/financial-reports, 2020
3. http://docplayer.net/171145348-Financial-performance-analysis-of-puma.html
4. Dr. Veena K.P and Prof. S.N. Patti, Financial Performance Analysis of Pre and Post
Merger in Banking Sector:
5. https://www.accountingformanagement.org/horizontal-analysis-of-financial-
statements/
6. https://www.wsj.com/market-data/quotes/PMMAF/financials/annual/balance-sheet
7. https://about.puma.com/en/this-is-puma/our-mission, 2020
8. https://about.puma.com/en/this-is-puma/history