Financial Analysis Of Paras Defence And Space

Technology Ltd.

Presented To-
Presented By-
CA CHANDANI BHAGAT
Ashutosh Kankane
Aparna Napit
Lalit Patel
Shruti Gautam
CONTENTS
• INTRODUCTION
• VISION
• PRODUCTS
• BUSINESS MODEL
• FINANCIAL
STATEMENTS
• FINANCIAL RATIO
ANALYSIS
• CONCULISION
 Paras Defence & Space Technologies
Limited is one of India’s leading
private sector Companies engaged in
the Design, Development,
Manufacturing, Integration, Testing
and Commissioning of a wide range of
defence and space engineering
Sharad Virji Shah
products and solutions.
-
Chairman
Paras Defence And Space Technologies
Ltd. focus on primarily three Technology
based Verticals –

• Defence & Space Optics

• Defence Electronics (Including Electro

- Magnetic Pulse (EMP) Solutions

• Delivering high precision products and

complex turnkey solutions in India and
selected international markets.
 VISION
 To serve the nation’s defence,
space & aerospace industry with
value-added products and
solutions.

 To excel in every aspect of our

business with a wide range of
products, scalable resources and
diversified business areas.

 To be a dependable entity to all of

our stakeholders and keep
increasing value for them every
year.
BUSINESS
MODEL
 Industry expertise

 Diverse Product Line

 Durable relationship

 Advance Manufacturing
Capabilities

 People strength
FINANCIAL STATEMENTS
RATIO ANALYSIS OF PARAS DEFENCE AND SPACE
TECHNOLOGIES LIMITED

Accounting ratios are the ratios which indicate the performance of the company by
comparing various different figures from financial statements

TYPE OF ACCOUNTING RATIO

 Liquidity Ratio
 Profitability Ratio
 Leverage Ratio
 Activity Ratios
 LIQUIDITY
RATIO
A liquidity ratio is a type of financial ratio used to
determine
a company’s ability to pay its short-term debt
obligations.
 CURRENT RATIO

 QUICK RATIO
  CURRENT RATIO FIGURES ARE IN
LAKHS

The current ratio is a liquidity ratio that measures a company's ability to pay short-term

obligations or those due within one year.
CURRENT RATIO = CURRENT ASSETS
CURRENT
CURRENT ASSETS = Inventories + Trade Receivables+LIABILITIESCash and Cash Equivalents +Bank
Balances +Loans +Other Financial Assets +Other Current Assets + Assets held for Sale
= 7471.09+9485.46+468.26+363.35+4.92+48.37+1953.30+411.99
=20206.74
CURRENT LIABILITIES = Borrowings + Trade Payables + Outstanding dues of Micro
enterprises and small enterprises + Outstanding dues of creditors other than Micro
enterprises and small enterprises + Other Financial Liabilities + Other Current Liabilities +
Provisions + Current=6803.80+6.22+93.43+1438.72+1519.23+60.75+14.80
Tax Liabilities
+676.07 =10613.02
CURRENT RATIO = 20206.74
= 1.90 :
10613.021
  LIQUID RATIO
The quick ratio is an indicator of a company’s short-term liquidity position and
measures a company’s ability to meet its short-term obligations with its most
liquid assets. LIQUID RATIO = QUICK ASSETS
CURRENT
LIABILITIES STOCK –PREPAID Expenses
QUICK ASSETS = CURRENT ASSETS-CLOSING
= 20206.74 –
7471.09
CURRENT LIABILITIES = Borrowings=+12735.65 Trade Payables + Outstanding dues of Micro
enterprises and small enterprises + Outstanding dues of creditors other than Micro
enterprises and small enterprises + Other Financial Liabilities + Other Current Liabilities +
Provisions + Current Tax Liabilities
=6803.80+6.22+93.43+1438.72+1519.23+60.75+14.8
0+676.07 =10613.02
LIQUID RATIO = 12735.65
= 1.20 :
10613.021
 PROFITABILITY
RATIO
This type of accounting ratio formulas indicates
the company’s efficiency in generating profits. It
indicates the earning capacity of the business in
correspondence to capital employed.

 GROSS PROFIT RATIO

 NET PROFIT RATIO

 OPERATING PROFIT RATIO

  GROSS PROFIT RATIO
Gross Profit Ratio compares the gross profit to the net sales of the company. It
indicates the margin earned by the business before its operational expenses. It is
represented as % of sales. The higher the gross profit ratio more profitable the business
is.
GROSS PROFIT RATIO = GROSS PROFIT
X100
NET SALES
COST OF GOOD SOLD = Cost of Materials Consumed + Purchase of Stock in Trade
+Changes in Inventories of Finished Goods (Opening Stock – Closing Stock )
= 5986.72 + 1348.71 - 804.40
= 6531.03
GROSS PROFIT = NET SALES (REVENUE FROM OPERATION) – COGS
= 14332.99 – 6531.03 = 7801.96

GROSS PROFIT RATIO =X7801.96

100 = 54.43 %
14332.99
 NET PROFIT RATIO
Net Profit Ratio shows the overall profitability available for the owners as it considers both
the operational and non-operational income and expenses. Higher the ratio, the more
returns for the owners. It is an important ratio for investors and financiers. The net profit
percentage is the ratio of after-tax profits to Net sales. It reveals the remaining profit after
all costs of production, administration, and financing have been deducted from sales, and
income taxes recognized
NET PROFIT RATIO = NET X100PROFIT
NET SALES
= 1578.61 X 100
14332.99
= 11.01 %
 OPERATING PROFIT RATIO

Operating Ratio refers to a metric used by a company to determine how efficient a

company’s management is at keeping operating costs low while at the same time
generating revenues or sales, by comparing the total operating expenses of a company
to that of its net sales
OPERATING PROFIT RATIO = X100
OPERATING PROFIT NET SALES
Operating profit = Net sales – (Cost of goods sold + Administrative and office expenses +
Selling and distribution exp.)
= 14332.99 – 6531.03 -592.92-73.75
= 7135.29
OPERATING PROFIT X 100= 49.78 %
RATIO = 7135.29 14332.99
 ACTIVITY RATIO
Activity Ratios refers to the type of the financial ratios
which are used by the company in order to determine the
efficiency with which the company is able to use its
different operating assets that are present in its balance
sheet and convert the same into the sales or the cash
 STOCK TURNOVER RATIO

 ASSETS TURNOVER RATIO

 DEBTOR TURNOVER RATIO

 WORKING CAPITAL RATIO

  STOCK TURNOVER
RATIOhow fast the company replaces a current batch
Inventory Turnover Ratio measures
of inventories and transforms them into sales. Higher ratio indicates that the
company’s product is in high demand and sells quickly, resulting in lower inventory
management costs and more earnings.
STOCK TURNOVER RATIO = COST OF
GOODS SOLD AVERAGE STOCK
COST OF GOOD SOLD = Cost of Materials Consumed + Purchase
of Stock in Trade + Changes in Inventories of Finished Goods
(Opening Stock – Closing Stock )
= 5986.72 + 1348.71 - 804.40
= 6531.03 = 7471.09 + = 6757.05
AVERAGE STOCK 2
= Opening Stock +6043.02
Closing2 Stock
STOCK TURNOVER = 0.96
RATIO = 6531.03 6757.05 Times
  ASSETS TURNOVER RATIO

Indicates the revenue as a % of the investment. A high ratio indicates that the
company’s assets are managed better, and it yields good revenue.

ASSETS TURNOVER RATIO = NET REVENUE

( REVENUE FROM OPERATION) TOTAL ASSETS
TOTAL ASSETS = NON CURRENT ASSETS
+ CURRENT ASSETS
= 16068.86 + 20206.74
= 36275.60
ASSETS TURNOVER RATIO = 14332.99
36275.60
= 0.39 Times
  DEBTOR TURNOVER
RATIO
Debtors Turnover Ratio indicates how efficiently the credit sales value is collected from
debtors. It shows the relationship between credit sales and the corresponding
receivables. RATIO =
DEBTOR TURNOVER
NET CREDIT SALE AVERAGE
DEBTOR
Net Credit Sales = Sales on credit – Sales returns – Sales
allowances.
= 9485.46 – 0 - 0
AVERAGE DEBTOR = Opening Debtor+ = 9759.99 +
= 9485.46 = 9622.72
Closing debtor 2 9485.462

DEBTOR TURNOVER = 0.66 Times

RATIO = 9485.46 14332.99

NOTE : ASSUMING NET CREDIT SALES AS TRADE RECIVABLE

  WORKING CAPITAL TURNOVER
RATIO
It establishes the relationship of sales to Net Working capital. A higher ratio
indicates that the company’s funds are efficiently used.

WORKING CAPITAL TURNOVER

RATIO = NET SALE NET WORKING
NET WORKING CAPITALCAPITAL
= CURRENT ASSETS –
CURRENT LIABILITIES
= 20206.74 – 10613.02
= 9593.72
WORKING CAPITAL TURNOVER
RATIO = 14332.99 9593.72

= 1.49
Times
LEVERAGE RATIO
It determines the company’s ability to pay for its
debts. Investors are interested in this ratio as it
helps to know how solvent the company is to meet
its dues.
 DEBT EQUITY RATIO

 DEBT RATIO

 PROPRIETARY RATIO

 INTREST COVERAGE RATIO

  DEBT EQUITY RATIO
It shows the relationship between total debts and the total equity of the company.
It is useful to measure the leverage of the company. A low ratio indicates that the
company is financially secure; a high ratio indicates that the business is at risk as
it is more dependent on debts for its operations
DEBT EQUITY RATIO = LONG
TERM DEBT SHAREHOLDER FUND
LONG TERM DEBT = BORROWING +
PROVISION
= 2552.94 + 119.33
= 2672.27
SHAREHOLDER FUND = EQUITY SHARE
CAPITAL + OTHER EQUITY
DEBT EQITY RATIO == 0.12+ :17678.18
= 2985.31
2672.27 20663.
= 20663.49
1
49
  DEBT RATIO
This ratio explains the relationship between the total liabilities of
the company in comparison to the total assets held by the
company.
DEBT RATIO = TOTAL
LIABILITIES TOTAL ASSETS
TOTAL LIABILITIES = NON CURRENT
LIABILITIES + CURRENT LIABILITIES
= 10613.02 + 4992.19
= 15605.21
TOTAL ASSETS = NON CURRENT ASSETS +
CURRENT ASSETS
DEBT RATIO = 16068.86
= 15605.21
= 0.43 :1 + 20206.74
36275.60 = 36275.60
  PROPRIETARY RATIO
This ratio explains the relationship between the total shareholder funds of the
company being invested in total assets held by the company.
PROPRIETARY RATIO =
SHAREHOLDER FUND TOTAL ASSETS
SHAREHOLDER FUND = EQUITY SHARE
CAPITAL + OTHER EQUITY
= 2985.31 + 17678.18
= 20663.49
TOTAL ASSETS = NON CURRENT
ASSETS + CURRENT ASSETS
= 16068.86
PROPRIETARY RATIO + 20206.74
= = 0.56
= 36275.60 :
20663.49 36275.60
1
  INTREST COVERAGE RATIO
The interest coverage ratio is a debt and profitability ratio used to determine how
easily a company can pay interest on its outstanding debt. The interest coverage
ratio is calculated by dividing a company's earnings before interest and
taxes (EBIT) by its interest expense during a given period.
INTREST COVERAGE RATIO = EARNING
BEFORE INTREST AND TAX INTREST
EBIT = PROFIT BEFORE TAX + DEPRICATION +
INTREST(FINANCE COST)
= 2261.01 + 965.36 + 1240.93
= 4467.3
INTREST = FINANCE COST
INTREST COVERAGE = 1240.93
RATIO= =3.59 :
4467.3 1240.93 1
  EARNING PER SHARE
EPS indicates how much money a company makes for each share of its stock and is a
widely used metric for estimating corporate value.

EARNING PER SHARE = PROFIT AFTER

TAX (NET PROFIT ) TOTAL NO . OF OUTSTANDING SHARE
EARNING PER SHARE = 1508.12
2985317
7
= 5.05
  PRICE EARNING RATIO
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures
its current share price relative to its earnings per share (EPS). The price-to-earnings
ratio is also sometimes known as the price multiple or the earnings multiple.

PRICE EARNING RATIO = MARKET VALUE

PER SHARE EARNING PER SHARE

PRICE EARNING RATIO = 672

=
5.05 133.06
  CONCLUSION

 As per my report , a company work is great and need to perform Well in future
and also they need to change the policy for future requirements because company
need to analyse the changes and deviation in a Deep way

 The best way for company is to take expert advice related to source of finance

 A company need to manage develop a good capital structure so that share and
debenture amount must be get balance in a welfare of company.
 ADDITIONAL
Paras Defence and Space Technologies has received capital markets regulator SEBI’s
approval to launch an IPO.
THANK YOU