ZODIAC

- FINANCIAL
ACCOUNTING
HUNAR- GRADE XIIB
INDEX
◦ INTRODUCTION
◦ ABOUT THE COMPANY & HISTORY
◦ FINANCIAL STATEMENST
◦ 1) balance sheet
◦ 2) statement of P&L
◦ 3) cash flow statement
◦ ANALYSIS OF CASH FLOW STATEMENT
◦ ACCOUNTING RATIOS
◦ ANALYSIS OF ACCOUNTING RATIO
◦ BIBLIOGRAPHY
INTRODUCTION
Financial management is that specific area of finance dealing with the financial decisions
corporations make, and tools and analysis used to make the decisions. The discipline as a
whole may be divided between long term and short term decisions and techniques. Both
share the same goal of enhancing firm value by ensuring that return on capital exceeds
cost of capital, without taking excessive financial risks.
 ABOUT THE COMPANY
◦ Zodiac Clothing Company(ZCL) promoted by M Y Noorani and Others was incorporated as a private
limited company in Jun 1984 is into manufacture and export of readymade garments. It became a deemed
public limited company in Dec. 1993 and went public in Jan. 1994. ZCL set up a 100% EOU at
Umbergaon Gujarat to manufacture and export of Men's clothing including shirts beach wear and pyjama
suits with an annual licensed capacity of 100000 units in Dec. 1984. Initially it concentrated on the
erstwhile Soviet Union by selling to the Central Buying Organisation. In the late eighties the company also
started exploring the sophisticated markets of western Europe. Three companies -- Zodiac Textiles &
Apparels Export Multiplex Packaging and Bangalore Knitwear -- were amalgamated with ZCL. To
upgrade production techniques and to meet the exacting quality standards of west European markets the
company re-designed and modernised its entire plant with technical assistance from a leading European
company in 1989. The company went public with its maiden issue in Jun.'94 at a premium of Rs 100 per
share to dilute the promoter's holdings to 75%.It has installed a new production facility in Bangalore with a
capacity of 5 lac shirts per annum.
BALANCE SHEET (in cr.)
Particulars Mar'21

Liabilities 12 Months

Share Capital 24.76

Reserves & Surplus 203.26

Net Worth 228.02

Secured Loan 89.66

Unsecured Loan .00

TOTAL LIABILITIES 317.68

ASSETS  
Gross Block 148.80
(-) Acc. Depreciation .00
Net Block 148.80
Capital Work in Progress .00
Investments 36.88
Inventories 76.93
Sundry Debtors 16.74
Cash and Bank 1.34
Loans and Advances 70.79
Total Current Assets 165.80
Current Liabilities 32.95
Provisions .85
Total Current Liabilities 33.80
NET CURRENT ASSETS 132.00
Misc. Expenses .00
TOTAL ASSETS(A+B+C+D+E) 317.68
STATEMENT OF P&L (in cr.)

Particulars  Mar'21

  12Months

Sales Turnover 99.95

Excise Duty .00

NET SALES 99.95

Other Income 32.5400

TOTAL INCOME 132.49

EXPENDITURE  

Manufacturing Expenses .00

Material Consumed 43.12

Personal Expenses 38.38

Selling Expenses .00

Administrative Expenses 42.06

Expenses Capitalised .00

Provisions Made .00

TOTAL EXPENDITURE 123.56

Operating Profit -23.61

EBITDA 8.93

Depreciation 23.06

Other Write-offs .00

EBIT -14.13

Interest 9.04

EBT -23.17

Taxes .74

Profit and Loss for the Year -23.91

Non Recurring Items .00

Other Non Cash Adjustments .00

Other Adjustments .00

REPORTED PAT -23.91

KEY ITEMS  

Preference Dividend .00

Equity Dividend .00

Equity Dividend (%) .00

Shares in Issue (Lakhs) 247.60

EPS - Annualised (Rs) -9.66

CASH FLOW STATEMENT (in cr.)
CASH FLOW  

Particulars Mar'20

Profit Before Tax -23.35

Net Cash Flow from Operating Activity 9.80

Net Cash Used in Investing Activity 24.47

Net Cash Used in Financing Activity -32.98

Net Inc/Dec In Cash and Cash Equivalent 1.29

Cash and Cash Equivalent - Beginning of the Year 4.17

Cash and Cash Equivalent - End of the Year 5.46

ANALYSIS OF CASH FLOW SATEMENT

TERM II
ACCOUNTING RATIOS
◦ Ratio It is an arithmetical expression of relationship between two related or
interdependent items. Accounting Ratios It is a mathematical expression that shows the
relationship between various items or groups of items shown in financial statements.
When ratios are calculated on the basis of accounting information, they are called
accounting ratios. Ratio Analysis It is a technique which involves re-grouping of data by
application of arithmetical relationship.
RATIO ANALYSIS (in cr.)
◦ Currant Ratio = currant assets/ currant liabilities = 165.80/33.8 = 4.90:1
◦ Quick Ratio = Quick assets(CA- Inv. -loan & adv.)/currant liabilities = 18.08/33.8 = 0.53:1
◦ Debt to Equity = long term debts/SHF = 89.66/228.02 = 0.39:1
◦ Proprietary Ratio = SHF/TA = 228.02/317.68 = 0.71 *100 = 71%
◦ Total assets to debt = TA / secure loans = 317.68/89.66 = 3.54 times
◦ Gross profit ratio = net sales – cost of goods sold/net sales * 100 = 56.83/99.95 * 100 = 56.85%
◦ Net profit Ratio = net profit/net sales *100 = -23.91/99.95 *100 = -23.92% (loss)
◦ Operating cost ratio = cost of goods sold+ operating expenses/net sales *100 = 85.18/ 99.95
*100 = 85.22%
◦ Interest coverage Ratio = PBIT/interest = -1.56 times
◦ Return on capital emp. = PBIT/cap emp(SHF + debt & loans) = 14.13/317.68 = 0.044%
Bibliography
◦ Wikipedia
◦ moneycontrol.com (financial information)
◦ NCERT accountancy textbook