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Financial analysis of the company

financial analysis

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Financial analysis of the company

  1. 1. Presentation by Abdulkarim khanapuri MB161001 Presentation for DR. N Maruti Rao Financial Analysis- Trading, P & L accounts and Balance Sheet
  2. 2. Financial Analysis o Financial analysis is the process of evaluating businesses, projects, budgets and other finance-related entities to determine their performance and suitability. o Financial analysis is used to analyze whether an entity is stable, solvent, liquid or profitable enough to make a monetary investment. o When looking at a specific company, a financial analyst conducts analysis by focusing on the Trading, P & L account, balance sheet and cash flow statement. o Contains historical data o Prepared on the basis of certain accounting concepts and conventions o Management may manipulate data:
  3. 3. o To Anticipate future Prospects o To Anticipate Risk o To Anticipate Return Why financial Analysis
  4. 4. FINANCIAL ANALYSIS Trading Account o A trading account sheet shows the results of the buying and selling of goods. o The trading account tally is prepared to show the trading results of the business, e.g. gross profit earned or gross loss sustained by the business. o It records the direct expenses of a business firm. Profit and Loss Account o Prepared to ascertain the net profit/loss of a business during an accounting period. o It records the indirect expenses of a business firm. Balance Sheet o Demonstrates the financial position of a business on a specific date. o The excess of assets over liabilities represents the capital sunk into the business, and reflects the financial soundness of a company. o known as the statement of financial position.
  5. 5. Key discussion on Trading, Profit & loss account o Sales o Depreciation o Profit after tax o Earnings per share Trading, Profit & loss account (Bajaj Auto)
  6. 6. Particulars MAR'17 Crore MAR'16 Crore Gross Sales 23,088.03 23,883.20 Net Sales 21,766.68 22,586.52 EXPENDITURE: Total Expenditure 17,345.57 17,804.58 Other Income 1,223.21 1,073.59 Operating Profit 5,644.32 5,855.53 Interest 1.4 1.05 PBDT 5,642.92 5,854.48 Depreciation 307.29 307.16 PBT 5,335.63 5,547.32 Provision for Tax 1,508.07 1,617.65 PAT 3,827.56 3,929.67 Equity Dividend (%) 550 550 Earnings Per Share (in ₹) 132.27 135.8 Trading and profit and loss account (BAJAJ AUTO)
  7. 7. Balance Sheet (Bajaj Auto) Key discussion on Balance Sheet Debt to Equity (Low Debt) Working capital (Operating cycles) Focus- On Return on Investment made rather than On Growth of the company.
  8. 8. Particulars MAR'17 (₹ Cr.) MAR'16 (₹ Cr.) EQUITY AND LIABILITIES Share Capital 289.37 289.37 Total Reserves 16,744.76 12,977.18 Shareholder's Funds 17,034.13 13,266.55 Unsecured Loans 119.9 117.86 Deferred Tax Assets / Liabilities 313.62 202.8 Other Long Term Liabilities 56.53 70.73 Long Term Provisions 78.13 47.57 Total long term Liabilities 568.18 438.96 Current Liabilities Trade Payables 2,235.73 2,027.04 Other Current Liabilities 840.18 606.63 Short Term Provisions 136.67 147.32 Total Current Liabilities 3,212.58 2,780.99 Total Liabilities 20,814.89 16,486.50 ASSETS Gross Block 4,533.21 4,434.89 Less: Accumulated Depreciation 2,589.95 2,409.22 Net Block 1,943.26 2,025.67 Capital Work in Progress 10.64 26.89 Intangible assets under development 31.53 25.35 Non Current Investments 8,739.92 9,001.08 Long Term Loans & Advances 591.81 587.98 Other Non Current Assets 106.36 94.28 Total Fixed Assets 11,423.52 11,761.25 Current Assets Loans & Advances Currents Investments 6,050.08 1,319.94 Inventories 728.38 719.07 Sundry Debtors 953.29 717.93 Cash and Bank 293.68 859.52 Other Current Assets 1,255.30 987.16 Short Term Loans and Advances 110.64 121.63 Total Current Assets 9,391.37 4,725.25 Net Current Assets (Including Current Investments) 6,178.79 1,944.26 Total Current Assets Excluding Current Investments 3,341.29 3,405.31 Total Assets 20,814.89 16,486.50 Contingent Liabilities 1,933.56 1,867.58 Total Debt 119.9 117.86 Book Value (in ₹) 588.66 458.46
  9. 9. Materials ordered from suppliers Productions Stocks held until the customer is found Products sold to customers Customers pay for their purchases Operating Cycle