term paper of accounting for mangers

8/3/2019 Term Paper of Accounting for Mangers

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TERM PAPER OF ACCOUNTING FOR MANGERS

y COMPARATIVE , COMMON SIZE , TREND ANALYSIS OF FINANCIAL STATEMENT

y RATIO ANALYSIS

y FUND FLOW ANALYSIS

y CASH FLOW ANALYSIS

y COST ANALYSIS

SUBMITTED TO :- SUBMITTED BY:-

MS. SUKHWINDER KAUR NAME Nishant Kumar Mishra

Reg. No. 11004721

ROLL NO. B41

SECTION :- T1001

Company PIRAMAL HEALTHCARE


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Company Facts - Piramal Health

Registered Address

Piramal Tower,Ganpatrao Kadam Marg,,Lower Parel

Mumbai

Maharashtra

400013

Tel: 022-30466666 022-30466666Fax: 022-24902363

Email:[email protected]

Website:http://www.piramalhealthcare.com

Group: Piramal Ajay Group

Explore Piramal Health connections

RegistrarsFreedom Registry Ltd. Plot No. 101/102,

MIDC Industrial Area,19th Street,

Satpur

Tel: 2354032, 2351892, 2363372

Fax: 2351126Email:[email protected]


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Healthcare solutions, aims to build a differentiated and a profitable pharmaceutical business with a dominant market share in eachsegment in which it operates. It has manufacturing plants at Baddi in Himachal Pradesh and Mulund in Maharashtra and apresence at the Head Office in Mumbai.Pharma solutions, a leading contract manufacturing organization, aims to provide clients low-cost drug development servicescarried out at par with world-class standards of quality, reliability and compliance. Pharma Solutions caters to end-patient orientatedsolutions with formulations and packaging innovations with facilities at Mahad and Thane in Maharashtra, Ennore in Tamil Nadu,Digwal in Andhra Pradesh, Pithampur in Madhya Pradesh, Morpeth, Grangemouth, Huddersfield and Billingham in the U.K. andTorcan in Canada and a presence at the Head Office in Mumbai.

Location Details - Piramal Healthcare

Location Type Address

Factory/plant L B S Marg,

Mumbai - 400080Maharashtra India

Factory/plant Sion - Trombay Road,

Mumbai - 400088

Maharashtra India

Factory/plant Lalbahadur Shastri Marg,

Mumbai - 400078

Maharashtra India

Factory/plant Pawane Mahape

New Mumbai -

Maharashtra India

Factory/plant Ennore Express Highway

Chennai (Madras) - 600057


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Tamil Nadu India

Factory/plant Plot No.903/904 GIDC Industrial Estate

Ankleshwar -

Gujarat India

Factory/plant R&D Centre

Mumbai -

Maharashtra India

Registered Office Nicholas Piramal Tower, Ganpatrao Kadam Marg, Lower Parel,Mumbai - 400013

Maharashtra - India

Phone : 30466666

Fax : 30466466

Email : [email protected]

Listing Information

Face Value Of Equity Shares 2Market Lot Of Equity Shares 1BSE Code 500302NSE Code PIRHEALTHBSE Group A

WhetherThe Company Forms A Part OfThe Following Indices -

Sensex NoNifty NoBSE-100 NoBSE-200 YesS&P CNX 500 Yes


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CNX Midcap YesCNX FMCG No

Listing On

Listed On The Stock Exchange, Mumbai, National Stock Exchange of India Ltd.

Management - Piramal Health

Name Designation Ajay G Piramal Chairman / Chair PersonN Santhanam COO & Executive DirectorSwati A Piramal Director

R A Shah DirectorN Vaghul DirectorNandini Piramal Executive DirectorKeki Dadiseth DirectorS Ramadorai DirectorDeepak Satwalekar Director


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Archives - Stock Prices

Company : PIRAMAL HEALTHCARE LTD.( 500302 )

Period ( 02-Sep-2010 to 11-Oct-

2010 )

DateOpen

Price

High

Price

Low

Price

Close

PriceWAP

No. of

Shares

No. of

Trades

Total Turnover

(Rs.)

* Spread

(Rs.)

H-L C-O

2/09/10 515.00 515.00 498.90 505.80 509.82 1,24,64,595 7,328 6,35,47,49,068 16.10 -9.20

3/09/10 509.00 515.90 505.00 511.65 505.18 87,19,084 5,359 4,40,46,96,495 10.90 2.65

6/09/10 515.15 517.45 510.55 514.15 514.01 72,41,842 3,343 3,72,23,64,499 6.90 -1.00

7/09/10 515.05 516.20 509.20 510.45 511.01 75,74,285 1,764 3,87,05,61,761 7.00 -4.60

8/09/10 510.00 528.10 508.05 521.85 512.23 86,00,439 11,438 4,40,53,74,264 20.05 11.85

9/09/10 528.00 531.70 521.50 526.85 525.94 7,57,581 8,540 39,84,43,953 10.20 -1.15

13/09/10 530.00 534.40 523.85 527.75 528.14 3,36,667 4,022 17,78,07,008 10.55 -2.25

14/09/10 529.00 531.90 519.35 522.45 525.99 1,59,387 3,204 8,38,35,407 12.55 -6.55

15/09/10 524.10 527.00 519.30 520.55 524.43 2,08,369 2,365 10,92,74,184 7.70 -3.55


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16/09/10 524.00 524.55 510.10 511.10 515.39 84,142 2,180 4,33,65,825 14.45 -12.90

17/09/10 514.00 519.00 505.85 508.00 510.40 1,23,238 2,886 6,29,00,514 13.15 -6.00

20/09/10 510.50 515.90 507.00 511.70 512.44 72,557 1,873 3,71,81,232 8.90 1.20

21/09/10 515.00 516.00 503.00 505.15 508.01 68,762 1,642 3,49,31,960 13.00 -9.85

22/09/10 507.00 510.00 502.00 505.80 505.71 35,660 1,085 1,80,33,613 8.00 -1.20

23/09/10 509.70 519.90 505.00 510.40 513.02 2,59,678 3,544 13,32,20,133 14.90 0.70

24/09/10 513.50 519.00 509.00 515.80 515.20 1,32,681 2,205 6,83,56,646 10.00 2.30

27/09/10 520.00 520.00 506.00 508.40 512.95 82,199 1,403 4,21,63,982 14.00 -11.60

28/09/10 509.05 515.40 507.15 511.15 511.62 45,788 1,222 2,34,25,937 8.25 2.10

29/09/10 512.55 518.50 507.00 510.10 512.81 1,24,948 2,004 6,40,74,768 11.50 -2.45

30/09/10 510.10 511.05 496.10 499.55 502.97 67,748 1,796 3,40,75,104 14.95 -10.55

1/10/10 505.00 523.50 504.70 520.55 516.61 2,27,201 4,477 11,73,75,354 18.80 15.55

4/10/10 518.85 542.20 515.85 529.20 531.43 5,29,097 9,461 28,11,75,426 26.35 10.35

5/10/10 532.00 537.95 520.00 522.40 529.68 1,40,465 3,392 7,44,01,072 17.95 -9.60

6/10/10 526.95 529.90 518.00 521.60 524.28 76,768 1,720 4,02,47,554 11.90 -5.35


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7/10/10 522.15 531.70 516.10 519.85 524.99 1,37,111 2,343 7,19,82,133 15.60 -2.30

RECENT HAPPENINGS IN PIRAMAL HEALTHCARE LTD.

Piramal may enter insurance sector

Billionaire Ajay Piramal-led Piramal Healthcare Ltd, set to receive Rs17,600 crore from selling off two businesses, may put some ofthat money into insurance, one of the fastest growing segments of the Indian financial sector.

He confirmed that an entry into the insurance sector is one such large investment opportunity the company would consider as partof the new ventures it is planning to enter.

None of the businesses that the company is currently focused in can absorb the capital it will have in its possession once the dealsare closed, Piramal, chairman and managing director, had said in an interview with Mintlast week.

Piramal Healthcare sold its domestic formulations business to US drugs and nutritional giant Abbott Laboratories for $3.72 billion(around Rs17,190 crore today) in May. This was followed by the sale of the diagnostics services business to Delhi-based SuperReligare Laboratories Ltd for Rs600 crore. While the formulations business was valued at nine times sales, the diagnostics servicesarm was valued at three times sales.

We will look at segments which are outside the current businesses that our company is engaged now, Piramal said. The new

businesses should require large investments and hold attractive growth potential.

Piramal is known for acquiring businesses cheap and building value over the long term. This quality, analysts say, will serve himwell if he enters the capital-intensive insurance business, which is known for its long gestation period of 10-15 years at least beforeprofits are made.


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Comparative analysis:-

Profit & Loss account ofPiramal Healthcare

Mar'08

Mar'09

Mar'10 2008-2009 2009-2010

I/D %age I/D I/D %age I/D

Income

Sales Turnover 2,001.26 2,386.95 2,711.74 385.69 19.2723584 324.79 13.6069042

Excise Duty 83.55 65.04 57.24 -18.51 -22.154399 -7.80 -11.99262

Net Sales 1,917.71 2,321.91 2,654.50 404.20 21.0772223 332.59 14.3239833

Other Income 74.83 71.57 133.3 -3.26 -4.3565415 61.73 86.2512226

Stock Adjustments -4.13 12.35 21.44 16.48 -399.03148 9.09 73.6032389Total Income 1,988.41 2,405.83 2,809.24 417.42 20.9926524 403.41 16.7680177

Expenditure

Raw Materials 802.2 969.48 1,139.24 167.28 20.8526552 169.76 17.510418

Power & Fuel Cost 48.16 48.68 50.25 0.52 1.07973422 1.57 3.2251438

Employee Cost 239.51 255.16 303.74 15.65 6.53417394 48.58 19.0390343

Other Manufacturing

Expenses 32.58 37.28 33.814.70 14.4260282 -3.47 -9.3079399

Selling and AdminExpenses 323.76 421.89 461.93 98.13 30.3094885 40.04 9.49062552

MiscellaneousExpenses 66.87 94.26 94.43 27.39 40.9600718 0.17 0.18035222

Preoperative ExpCapitalised 0 0 0 0.00 0 0.00 0


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Total Expenses 1,513.08 1,826.75 2,083.40 313.67 20.7305628 256.65 14.0495415

Operating Profit 400.5 507.51 592.54 107.01 26.7191011 85.03 16.7543497

PBDIT 475.33 579.08 725.84 103.75 21.8269413 146.76 25.3436485

Interest 72.09 180.69 156.36 108.60 150.645027 -24.33 -13.465051

PBDT 403.24 398.39 569.48 -4.85 -1.2027577 171.09 42.9453551

Depreciation 70.48 83.81 92.22 13.33 18.9131669 8.41 10.0346021

Other Written Off 0 0 00.00 0 0.00 0

Profit Before Tax 332.76 314.58 477.26 -18.18 -5.463397 162.68 51.7133956

Extra-ordinary items -2.79 -0.84 -0.64 1.95 -69.892473 0.20 -23.809524

PBT (Post Extra-ordItems) 329.97 313.74 476.62 -16.23 -4.918629 162.88 51.9155989

Tax 28.49 38.42 33.4 9.93 34.8543349 -5.02 -13.066111

Reported Net Profit 301.48 275.32 443.22 -26.16 -8.6771925 167.90 60.9835827

Total Value Addition 710.88 857.27 944.16146.39 20.5927864 86.89 10.1356632

Preference Dividend 1.34 0 0 -1.34 -100 0.00

Equity Dividend 87.79 87.79 112.86 0.00 0 25.07 28.5567832

CorporateDividendTax 15.15 14.92 18.75 -0.23 -1.5181518 3.83 25.6702413

Per share data(annualised)

Shares in issue

(lakhs) 2,090.13 2,090.13 2,090.13 0.00 0 0.00 0Earning Per Share(Rs) 14.36 13.17 21.21 -1.19 -8.2869081 8.04 61.047836

Equity Dividend (%) 210 210 270 0.00 0 60.00 28.5714286

Book Value (Rs) 48.63 56.89 71.8 8.26 16.9854 14.91 26.2084725


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COMPARATIVE ANALYSIS OF THE P&L A/C:-

1) Net sales has increased by 21.07% in 2008-09 and further increased by 14.32% in 2009-10. The sales position of the

company is constantly increasing but at an decreasing rate.

2) The total expenses of the company has increased. In 08-09 the increase was of 20.73% and in 09-10 it increased by 14.04%

as compared to 08-09. The major contribution of increase in 2008-09 was due to raw material cost which increased by 20%

,selling & administration expense by 30.30% and miscellaneous expenses by 40.96% and 2009-10 it was due an increase in

employee cost by 19.03% and raw material by 17.51%.

3) Depreciation has increased in 08-09 by 18.93% and by 10.03% in 09-10. The increase is at an decreasing rate.

4) Growth of other income has fallen in 08-09 by 4.35% and in 09-10 it has considerably increased 86.25%. The other income

in 09-10 is high as compared to net sales.

5) The profit at every stage i.e;PBDIT ,PBIT PBTEOT, PBT-Y and PBT has declined in absolute terms in 2008-09 but has

significantly increased in 2009-10.

6) The tax has increased by 34.85% in 08-09 due to increase in sales but although the sales has increased in 09-10 the tax

liability for the company has fallen by 13.06%, this signifies that the company has worked on tax saving schemes.

Balance Sheet ofPiramal Healthcare

Mar '08 Mar '09 Mar '10 2008-2009 2009-2010

I/D

%age

I/D I/D

%age

I/D

Sources Of Funds

Total Share Capital 41.8 41.8 41.8 0 0 0 0

Equity Share Capital 41.8 41.8 41.8 0 0 0 0


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Share Application

Money 0 0 0 0 0 0 0Preference ShareCapital 0 0 0 0 0 0 0

Reserves 974.67 1,147.22 1,458.83 172.55 17.703 311.61 27.1622

Revaluation Reserves 0 0 0 0 0 0 0

Networth 1,016.47 1,189.02 1,500.63 172.55 16.975 311.61 26.2073

Secured Loans 151.17 448.01 406.53 296.84 196.36 -41.48 -9.2587

Unsecured Loans 353.12 528.85 254.43 175.73 49.765 -274.42 -51.89

Total Debt 504.29 976.86 660.96 472.57 93.71 -315.9 -32.338

Total Liabilities 1,520.76 2,165.88 2,161.59 645.12 42.421 -4.29 -0.1981

Application OfFunds

Gross Block 1,137.23 1,427.81 1,570.25 290.58 25.552 142.44 9.97612

Less: Accum.Depreciation 329 409.09 496.36 80.09 24.343 87.27 21.3327

Net Block 808.23 1,018.72 1,073.89 210.49 26.043 55.17 5.41562Capital Work inProgress 47.82 46.33 50.56 -1.49 -3.116 4.23 9.13015

Investments 128.26 129.98 192.65 1.72 1.341 62.67 48.2151

Inventories 252.49 288 285.47 35.51 14.064 -2.53 -0.8785

Sundry Debtors 302.92 361.88 273.07 58.96 19.464 -88.81 -24.541

Cash and BankBalance 13.95 17.47 15.64 3.52 25.233 -1.83 -10.475

Total Current Assets 569.36 667.35 574.18 97.99 17.211 -93.17 -13.961

Loans and Advances 450.59 865.93 915.93 415.34 92.177 50 5.77414

Fixed Deposits 20.12 0 0 -20.12 -100 0 0

Total CA, Loans & Advances 1,040.07 1,533.28 1,490.11493.21 47.421 -43.17 -2.8155


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Deffered Credit 0 0 00 0 0

Current Liabilities 384.67 445.2 491.8 60.53 15.736 46.6 10.4672

Provisions 118.95 117.23 153.82 -1.72 -1.446 36.59 31.2121

Total CL & Provisions 503.62 562.43 645.62 58.81 11.677 83.19 14.7912

Net Current Assets 536.45 970.85 844.49 434.4 80.977 -126.36 -13.015

MiscellaneousExpenses 0 0 0 0 0

Total Assets 1,520.76 2,165.88 2,161.59 645.12 42.421 -4.29 -0.1981

Contingent Liabilities 879.85 1,156.66 1,670.48 276.81 31.461 513.82 44.4227

Book Value (Rs) 48.63 56.89 71.8 8.26 16.985 14.91 26.2085

COMPARATIVE ANALYSIS OF BALANCE SHEET :-

1) Total assets and liabilities up by 42.42 % in 08-09 and but in 09-10 it is in a bad situation because the total assets have

declined by 0.19% due to decrease in cash & bank balance and sundry debtors.

2) Net worth up by 16.97% in 08-09 and 26.20% in 09-10 because the reserves have increased by 27.16%.

3) Net fixed assets higher by 26.04% in 08-09 and 5.41% increase in 09-10, whereas net sales has increased by 21.07% in 08-

09 and 14.32% in 09-10 , it signifies that there is an efficient utilization of assets.4) Investments have grew up by 1.34%in 08-09 and 48.21% in 09-10. Investments are less than net worth , it is not using its

revenue well.

5) The inventories have increased in 08-09 by 14.06% but has decreased by 0.87% in 09-10 which is good for company

because it can reduce the warehousing 7 maintenance cost.

6) The current liabilities and provisions has increased by 11.67% in 08-09 and further increased by 14.79% in 09-10.


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OVERALL ANALYSIS OF P&L A/C AND BALANCE SHEET:-

1) The net sales of the company has increased over the years but at an decreasing rate.

2) The expenses of the company has increased but at an decreasing rate due to increase in sales.

3) The depreciation has decreased which signifies that the fixed assests have decreased..

4) The fixed asest utilization of the company is very high.5) Inventory management of the company is not upto the mark because it is maintaining not maintaining a low inventory

despite of being in pharmaceutical line,the company has an extremely bad financial position in terms of long term and

short term solvency because it has excessively used its assets


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Common size analysis:-


Mar '08 Mar '09 Mar '10

common size

%age

common size

%age

common size

%age

Income

Sales Turnover 2,001.26 2,386.95 2,711.74 104.3567588 102.8011422 102.1563383

Excise Duty 83.55 65.04 57.24 4.356758843 2.801142163 2.156338293

Net Sales 1,917.71 2,321.91 2,654.50 100 100 100

Other Income 74.83 71.57 133.3 3.902049841 3.082376147 5.02166133

Stock Adjustments -4.13 12.35 21.44 -0.21536103 0.531889694 0.807685063

Total Income 1,988.41 2,405.83 2,809.24 103.6866888 103.6142658 105.8293464

Expenditure 0 0 0

Raw Materials 802.2 969.48 1,139.24 41.83114235 41.75355634 42.91731023

Power & Fuel Cost 48.16 48.68 50.25 2.511328616 2.096549823 1.893011867

Employee Cost 239.51 255.16 303.74 12.48937535 10.9892287 11.44245621

OtherManufacturingExpenses 32.58 37.28 33.81 1.698901294 1.605574721 1.273686193

Selling and AdminExpenses 323.76 421.89 461.93 16.88263606 18.16995491 17.40177058

MiscellaneousExpenses 66.87 94.26 94.43 3.48697144 4.059588873 3.557355434

Preoperative ExpCapitalised 0 0 0 0 0 0

Total Expenses 1,513.08 1,826.75 2,083.40 78.90035511 78.67445336 78.48559051


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Operating Profit 400.5 507.51 592.54 20.88428386 21.85743633 44.64418911

PBDIT 475.33 579.08 725.84 24.7863337 24.93981248 27.34375589

Interest 72.09 180.69 156.36 3.759171095 7.781955373 5.890374835

PBDT 403.24 398.39 569.48 21.02716261 17.15785711 21.45338105

Depreciation 70.48 83.81 92.22 3.675216795 3.609528362 3.474100584

Other Written Off 0 0 0 0 0 0

Profit Before Tax 332.76 314.58 477.26 17.35194581 13.54832875 17.97928047

Extra-ordinaryitems -2.79 -0.84 -0.64 -0.145486022 -0.036177113 -0.024110002

PBT (Post Extra-ord Items) 329.97 313.74 476.62 17.20645979 13.51215163 17.95517047

Tax 28.49 38.42 33.4 1.485626085 1.654672231 1.258240723

Reported Net Profit 301.48 275.32 443.22 15.7208337 11.8574794 16.69692974

Total Value Addition 710.88 857.27 944.16 37.06921276 36.92089702 35.56828028

PreferenceDividend 1.34 0 0 0.069875007 0 0

Equity Dividend 87.79 87.79 112.86 4.57785588 3.780938968 4.251648145

CorporateDividendTax 15.15 14.92 18.75 0.790004745 0.642574432 0.706347711


Shares in issue(lakhs) 2,090.13 2,090.13 2,090.13 108.9909319 90.01770094 78.73912225

Earning Per Share

(Rs) 14.36 13.17 21.21 0.748809778 0.567205447 0.799020531Equity Dividend(%) 210 210 270 10.95056083 9.044278202 10.17140704

Book Value (Rs) 48.63 56.89 71.8 2.535837014 2.450138033 2.704840836


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ANALYSIS OF P&L A/C:-

1) Net sales of the company is increasing over the years.

2) Total expenses over the years is constant as the percentage of net sales.

3) Other manufacturing expenses as a percentage of net sales have declined significantly over the years.

4) Other income as a percentage of net sales has increased over the years by 3.90% in 2008 ; 3.08% in 2009 and 5.02% in

2010.

5) PBDIT increased over the years because of increase in total income due improved sales.

6) Depreciation cost as a percentage of net sales has declined.7) PBT has declined in 08-09 but has significantly increased in 09-10.


Mar '08 Mar '09 Mar '10

common size

%age common size

%age common size

%age

Sources OfFunds

Total Share Capital 41.8 41.8 41.8 2.748625687 1.929931483 1.933761722

Equity Share Capital 41.8 41.8 41.8 2.748625687 1.929931483 1.933761722

Share ApplicationMoney 0 0 0 0 0 0

Preference ShareCapital 0 0 0 0 0 0

Reserves 974.67 1,147.22 1,458.83 64.09098083 52.96784679 67.48874671


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Revaluation

Reserves 0 0 0 0 0 0Networth 1,016.47 1,189.02 1,500.63 66.83960651 54.89777827 69.42250843

Secured Loans 151.17 448.01 406.53 9.940424525 20.68489482 18.8069893

Unsecured Loans 353.12 528.85 254.43 23.21996896 24.41732691 11.77050227

Total Debt 504.29 976.86 660.96 33.16039349 45.10222173 30.57749157

Total Liabilities 1,520.76 2,165.88 2,161.59 100 100 100

Application Of

Funds

Gross Block 1,137.23 1,427.81 1,570.25 74.78037297 65.92285815 72.64328573

Less: Accum.Depreciation 329 409.09 496.36 21.63391988 18.8879347 22.96272651

Net Block 808.23 1,018.72 1,073.89 53.14645309 47.03492345 49.68055922

Capital Work inProgress 47.82 46.33 50.56 3.144480391 2.139084344 2.339018963

Investments 128.26 129.98 192.65 8.433940924 6.001255841 8.912420949

Inventories 252.49 288 285.47 16.60288277 13.29713558 13.20648227

Sundry Debtors 302.92 361.88 273.07 19.91898787 16.70822022 12.63283046

Cash and BankBalance 13.95 17.47 15.64 0.917304506 0.80660055 0.723541467

Total Current Assets 569.36 667.35 574.18 37.43917515 30.81195634 26.5628542Loans and

Advances 450.59 865.93 915.9329.62926432 39.980516 42.37297545

Fixed Deposits 20.12 0 0 1.323022699 0 0

Total CA, Loans & Advances 1,040.07 1,533.28 1,490.11 68.39146216 70.79247234 68.93582964

Deffered Credit 0 0 0 0 0 0

Current Liabilities 384.67 445.2 491.8 25.29458955 20.55515541 22.75177069

Provisions 118.95 117.23 153.82 7.821747021 5.412580568 7.116058087

Total CL & 503.62 562.43 645.62 33.11633657 25.96773598 29.86782877


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Provisions

Net Current Assets 536.45 970.85 844.49 35.2751256 44.82473637 39.06800087

MiscellaneousExpenses 0 0 0 0 0 0

Total Assets 1,520.76 2,165.88 2,161.59 100 100 100

ContingentLiabilities 879.85 1,156.66 1,670.48 57.85594045 53.40369734 77.28015026

Book Value (Rs) 48.63 56.89 71.8 3.197743234 2.626645982 3.321628986

ANALYSIS OF BALANCE SHEET :-

1) Piramal healthcare is a small company with a book value of 71.8 crore.

2) Total equity of the company is at 1.93% as a percentage of total assets .

3) Net fixed assests of the company has decreased in 08-09 but has slightly increased in 09-10.4) The investment of the company has decreased in 08-09 but has considerably increased in 09-10 as a percentage of

sources of fund.

5) The inventory of the company has decreased in 2009 as well as in 2010

6) The current liability of the company as a percentage of total assets in 08 was more than the current liabilities in 2009 .

the situation in 2010 was more worse because the liabilities increased again significantly.


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OVERALL COMMON SIZE ANALYSIS OF THE P&L A/C AND BALANCE SHEET:-

1) The net sales of the company has increased over the years and the balance sheet of the company also shows a significantly

good position.

2) The financial position of the company is at a respectful position because it has managed to increase its current assests by not a

taking loan but by increase in sales

Trend analysis:-


Mar '08 Mar '09 Mar '10

%age change

08

%age change

09

%age change

10

Income

Sales Turnover 2,001.26 2,386.95 2,711.74 100 119.2723584 135.501634

Excise Duty 83.55 65.04 57.24 100 77.84560144 68.50987433

Net Sales 1,917.71 2,321.91 2,654.50 100 121.0772223 138.4203034

Other Income 74.83 71.57 133.3 100 95.64345851 178.1371108


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Stock Adjustments -4.13 12.35 21.44 100 -299.031477 -519.1283293

Total Income 1,988.41 2,405.83 2,809.24 100 120.9926524 141.2807218

Expenditure 0 0 0

Raw Materials 802.2 969.48 1,139.24 100 120.8526552 142.0144602

Power & Fuel Cost 48.16 48.68 50.25 100 101.0797342 104.339701

Employee Cost 239.51 255.16 303.74 100 106.5341739 126.8172519

Other

ManufacturingExpenses 32.58 37.28 33.81 100 114.4260282 103.7753223

Selling and AdminExpenses 323.76 421.89 461.93 100 130.3094885 142.6766741

MiscellaneousExpenses 66.87 94.26 94.43 100 140.9600718 141.2142964

Preoperative ExpCapitalised 0 0 0 0 0 0

Total Expenses 1,513.08 1,826.75 2,083.40 100 120.7305628 137.6926534

Operating Profit 400.5 507.51 592.54 100 126.7191011 147.9500624

PBDIT 475.33 579.08 725.84 100 121.8269413 152.7023331

Interest 72.09 180.69 156.36 100 250.645027 216.8955472

PBDT 403.24 398.39 569.48 100 98.79724234 141.2260688

Depreciation 70.48 83.81 92.22 100 118.9131669 130.84563

Other Written Off 0 0 0 0 0 0

Profit Before Tax 332.76 314.58 477.26 100 94.53660296 143.4246905Extra-ordinaryitems -2.79 -0.84 -0.64 100 30.10752688 22.9390681


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PBT (Post Extra-ord Items) 329.97 313.74 476.62 100 95.08137103 144.4434343

Tax 28.49 38.42 33.4 100 134.8543349 117.2341172

Reported Net Profit 301.48 275.32 443.22 100 91.32280748 147.0147273Total Value

Addition 710.88 857.27 944.16 100 120.5927864 132.8156651

PreferenceDividend 1.34 0 0 100 0 0

Equity Dividend 87.79 87.79 112.86 100 100 128.5567832

CorporateDividendTax 15.15 14.92 18.75 100 98.48184818 123.7623762


Shares in issue(lakhs) 2,090.13 2,090.13 2,090.13 100 100 100

Earning Per Share(Rs) 14.36 13.17 21.21 100 91.71309192 147.7019499

Equity Dividend (%) 210 210 270 100 100 128.5714286

Book Value (Rs) 48.63 56.89 71.8 100 116.9854 147.6454863


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Trend ANALYSIS OF PROFIT AND LOSS A/C :-

1) PBT declined in 08-09 , much lower than the sales growth but significantly increased in the year 09-10 .

2) PAT has also declined in the years 08-09 it was 91.33% but had significantly risen in 09-10 and stood at 147.01% as

compared to the base year.

3) There is a rise in dividend rates in the year 09-10.

QUANTITATIVE DETAILS :-

1) Consistent rise in production over the years

2) 2) positive volume - value growth in all all the year

0

1

2

3

4

5

6

Category 1 Category 2 Category 3 Category 4

Series 1

Series 2

Series 3


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Mar '08 Mar '09 Mar '10

%age change

08

%age change

09

%age change

10

Sources Of Funds

Total Share Capital 41.8 41.8 41.8 100 100 100

Equity Share Capital 41.8 41.8 41.8 100 100 100

Share ApplicationMoney 0 0 0 0 0 0

Preference ShareCapital 0 0 0 0 0 0

Reserves 974.67 1,147.22 1,458.83 100 117.7034278 149.6742487

Revaluation Reserves 0 0 0 0 0 0

Networth 1,016.47 1,189.02 1,500.63 100 116.9754149 147.631509

Secured Loans 151.17 448.01 406.53 100 296.361712 268.9224052

Unsecured Loans 353.12 528.85 254.43 100 149.7649524 72.05199366

Total Debt 504.29 976.86 660.96 100 193.7099685 131.0674414

Total Liabilities 1,520.76 2,165.88 2,161.59 100 142.4208948 142.138799

Application Of

Funds 0 0 0

Gross Block 1,137.23 1,427.81 1,570.25 100 125.5515595 138.0767303

Less: Accum.Depreciation 329 409.09 496.36 100 124.343465 150.8693009

Net Block 808.23 1,018.72 1,073.89 100 126.0433293 132.8693565


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Capital Work in

Progress 47.82 46.33 50.56 100 96.88414889 105.7298202

Investments 128.26 129.98 192.65 100 101.341026 150.2027132

Inventories 252.49 288 285.47 100 114.0639233 113.0619034

Sundry Debtors 302.92 361.88 273.07 100 119.4638849 90.14591311

Cash and BankBalance 13.95 17.47 15.64 100 125.2329749 112.1146953

Total Current Assets 569.36 667.35 574.18100 117.2105522 100.8465646

Loans and Advances 450.59 865.93 915.93 100 192.1769236 203.2734859

Fixed Deposits 20.12 0 0 100 0 0

Total CA, Loans & Advances 1,040.07 1,533.28 1,490.11 100 147.4208467 143.2701645

Deffered Credit 0 0 0 0 0 0

Current Liabilities 384.67 445.2 491.8 100 115.7355655 127.8498453

Provisions 118.95 117.23 153.82 100 98.55401429 129.3148382

Total CL & Provisions 503.62 562.43 645.62 100 111.6774552 128.195862

Net Current Assets 536.45 970.85 844.49 100 180.9767919 157.4219405

MiscellaneousExpenses 0 0 0 0 0 0

Total Assets 1,520.76 2,165.88 2,161.59 100 142.4208948 142.138799Contingent Liabilities 879.85 1,156.66 1,670.48 100 131.4610445 189.8596352

Book Value (Rs) 48.63 56.89 71.8 100 116.9854 147.6454863


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Trend analysis of the positions at the end (balance sheet) :-

1) Gross block and sales increased at an same rate. high fixed assets.

2) Net current assests increased in 2009 but had fallen in 2010 despite increasing sales.

3) Net worth growth always in line with the growth in gross block , high leverage , high dividend distribution .

OVERALL TREND ANALYSIS OF THE P&L AND BALANCE SHEET :-

1) Net current assets and total assests have fallen. Need to set these area of concern right.

2) Dividend issued only due to increase in profit and sales .

3) In 08-09 the company has taken huge amounts in form of secured and unsecured loans but in 09-10 it has started paying

back the loan

4) The financial position of the company is terms of short term solvency is quite good but the long term solvency position is

extremely in bad shape.


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RATIO ANALYSIS:- A ratio is a simple arthematical expression of the relationship of one number to another. it may be defined as the

indicated quotient of two mathematical expression.

According toaccountants handbook by wixon , kell and Bedford, a ratio is an expression of the quantitative relationship between two

numbers.

According tokohler, a ratio is the relation , of the amount ,a , to another ,b, expressedas the ratioofa to b ; a:b (a is to b);oras a simple

fraction , integer , decimal , fraction orpercentage.

Use and Significance of Ratio Analysis:-

A. MANGERIAL USE OF RATIO ANALYSIS

1. Helps in decision making.

2. Helps in financial forecasting and planning.

3. Helps in communicating.

4. Helps in co-ordination.5. Helps in control.

6. Other uses.

B. UTILITY TO SHREHOLDERS / INVESTORS.

C. UTILITY TO CREDITORS.

D. UTILITY TO EMPLOYEE.

E. UTILITY TO GOVERNMENT.


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RATIO ANALYSIS OF THE FINANCIAL STATEMENT :-

1.LIQUIDITY RATIOS :-

a) CURRENT RATIO = CURRENT ASSETS/CURRENT LIABILITIES

Year Mar '08 Mar '09 Mar '10

Current Assets 1,040.07 1,533.28 1,490.11

Current Liabilities 503.62 562.43 645.62

Current Ratio 2.065188 2.7261704 2.3080295

INTERPRETATION:-

2008 The liquidity position of the firm to pay off its current liabilities is in a respectable positon as it is 2.06:1 , above the ideal ratio because ofgood debtors and high cash & bank balance.

2009 The liquidity position has further increased to 2.72:1 due to increase in debtors and cash & bank balance.

2010 The liquidity position of the firm as compared to 09 has declined but it is still above the ideal ratio. The decline was due to rapid fall in

debtor and slight fall in cash & bank balance.

CONCLUSION :- The liquidity positon of the firm throughout the year is in good position because the current ratio is far above the standard

mark of 2:1. The firm will not have any problem in paying off its current obligations in time as and when they become due.


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b) QUICK RATIO = QUICK ASSETS / CURRENT LIABILITIES


quick Assets 787.58 1,245.28 1,204.47


Current Ratio 1.5638378 2.2141066 1.8656021

INTERPRETATION :-

2008 The quick assests of the firm is in good position as it is at 1.53:1 due to high debtors and cash & bank balance.

2009 The quick assests of the firm to pay off its current liabilities has further increased and is at 2.21:1 due to increase in debtors and cash.

2010 The quick assests or liquidity position of the company has declined due to fall in debtors and cash balance but is still above the

standard mark

CONCLUSION:- The firms liquidity position to pay off its current liabilities is in quite respectable position throughout the years. It has

maintained a good liquidity position by taking secured & unsecured loans.


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c) Absolute liquid ratio=liquid assets / current liabilities


Liquid Assets 13.95 17.47 15.64


Current Ratio 0.0276995 0.0310616 0.0242248

INTERPRETATION:-

2008 The absolute liquid position of the firm in terms of cash and bank balance , maketable securities and temporary investments is 0.027:1

which is very low.

2009 The absolute liquid position of the firm in 2009 has increased a bit but is still below the ideal ratio.

2010 - The absolute liquid position of the firm has detoriated and is in worst position at 0.024:1.

CONCLUSION:- The liquidity position throughout the year in terms of cash & bank balance , marketable securities and temporary investment

to pay off its current liabilities is relatively very low due to fall in cash & bank balance and increase in current liabilities.


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2.TURNOVER/ ACTIVITY/EFFICIENCY RATIO

a) Inventory turnover ratio = Net sales / total inventory

days of inventory holding = No. of days in a year / inventory turnover ratio


NET SALES 1,917.71 2,321.91 2,654.50

TOTAL INVENTORY 252.49 288 285.47NO. OF DAYS IN AYEAR 360 360 360

INVENTORYTURNOVER RATIO 7.59 8.06 9.29

DAYS OF INVENTORYHOLDING 47.43 44.66 37.15

INTERPRETATION:-

2008- The velocity of conversion of stock into sales for the firm is 7.59 times which is very low because it is in the pharmaceutical business and

therefore the days of inventory holding is very high to 47.43 days which is not quite good for the company.

2009- The velocity of conversion of stock into sales for the firm has increased to 8.06 times and days of inventory holding has declined to

44.66 days ,which is a good sign for the company.

2010- The velocity of conversion of stock into sales for the firm has further increased to 9.29 times and days of inventory holding has declined

to 37.15 days which is a good sign for the company.

CONCLUSION:- The velocity of conversion of stock into sales for the firm has increased over the years and days of inventory holding has

declined which means that the company now requires less money to finance its inventory . A low inventory turnover implies over investment in

inventories , dull business , poor quality , stock accumulations of obsolete and slow moving goods and low profits as compared to total

investments.


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b) DEBTOR TURNOVER RATIO = Total sales / Total debtors

Avg. COLLECTION PERIOD = No. of Days in a year / DebtorTurnover Ratio


NET SALES 1,917.71 2,321.91 2,654.50

TOTAL DEBTOR 302.92 361.88 273.07NO. OF DAYS IN AYEAR 360 360 360DEBTOR TURNOVER

RATIO 6.33 6.41 9.72AVG. COLLECTIONPERIOD 56.67 56.16 37.03

INTERPRETATION:-

2008- The debtors turnover ratio in 2008 is 6.33 times and the average collection period is 56.67 days which is significantly very low , which

implies that debts are not rapidly collected by the firm.

2009- Debtors velocity has indicated a very low ratio of 6.41times ( that the debtors were converted in a year ) and the average collection

period is also very high at 56.16 days which indicates that bad quality of debtors and inefficient management has been done.

2010- The debtors velocity in 2010 has increased a bit and is at 9.72 times and the average collection period has also declined to 37.03 days

which means efficient management of debtors and less liquid debtors.

CONCLUSION:- The company has an low debtors ratio and a larger average collection period which is an indicator of bad quality of debtors

and their inefficient management. This certainly disrupts the collection of cash and high chances of bad debts.


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c) TOTAL ASSETS TURNOVER RATIO = Net sales / Total assests


NET SALES 1,917.71 2,321.91 2,654.50

TOTAL ASSETS 1520.76 2165.88 2161.59

TOTAL ASSETSTUROVER RATIO 1.26 1.07 1.22

INTERPRETATION:-

2008- The total assets turnover ratio of the company is 1.26 times, which is a good indication and thus signifies the firms ability to generate

sales from all its financial resources.

2009- The total asset turnover ratio of the company has significantly declined and is at 1.07 times , this means that the firms ability to

generate sales from all financials resources has fallen.

2010- The total asset turnover ratio of the company has increased in 2010 and is at 1.22 times.

CONCLUSION:- The total Asset turnover ratio of the company has declined in 08-09 but has increased in 09-10. This shows that the firms

ability to generate sales from all financial resources committed to total asset have fallen in 08-09 but has significantly increased in 09-10.


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d) SALES TO CAPITAL EMPLOYED / CAPITAL TURNOVER RATIO = Net sales / Cap. employed


NET SALES 1,917.71 2,321.91 2,654.50

CAPITAL EMPLOYED 1520.69 2165.88 2161.59CAPITAL TUROVERRATIO 1.26 1.07 1.22

INTERPRETATION:-

2008- The company has a high capital turnover ratio which is 1.26 times and may be stated that it has greater profits.

2009- The capital turnover ratio has declined to 1.07 times as compared to 2008 which means that it has low profits

2010- The company turnover ratio of the has increased in 2010 but at an declining rate.

CONCLUSION:- The capital turnover ratioof the firm has declined in 08-09 but has significantly increased in 09-10 , which means that

sufficient sales are not being made and profits are lower.


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3) SOLVENCY / LEVERAGE RATIO

a) DEBT EQUITY RATIO = Total debt / Shareholders fund


TOTAL DEBT 1,007.91 1,539.29 1,306.54SHAREHOLDERSFUND 1016.47 1189.02 1500.13

DEBT EQUITY RATIO 0.99 1.29 0.87

INTERPRETATION:-

2008- The debt equity ratio of the firm is high which is not favourable from the long term creditors point of view.

2009- The debt equity ratio of the firm has further increased to 1.29:1which means that the claims of outsiders on the firm has increased.

2010- The debt equity ratio of the firm has fallen and is at the lowest level as compared to 08,09; which signifies that the outsiders claim has

been reduced.

CONCLUSION:- The debt equity ratio of the firm has increased in 08-09 but in 09-10 it has fallen , the ratio signifies that the outsiders

( creditors ) are less than those of owners.


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b) PROPRIETORY RATIO = Shareholders fund / Total assests


SHAREHOLDERS FUND 1016.47 1189.02 1500.13

TOTAL ASSETS 1520.76 2165.88 2161.59

PROPRIETORY RATIO 0.66 0.54 0.69

INTERPRETATION:-

2008- The proprietory ratio of the firm is high which signifies that long term solvency position of the firm is good.

2009- The ratio has declined to 0.54 which is not good for the firm as compared to 2008.

2010- The ratio has considerably risen and is at an all time high at 0.69 in 2010 which is good for the company.

CONCLUSION:- The proprietory ratio of the company is fluctuating over the years , it has fallen in 08-09 but has considerably increased in

09-10 , which is a good sign for the company. The ratio is at an all time high which signifies that the long term solvency position of the company

is good.


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4) PROFITABILIT Y RATIO

a) GROSS PROFIT RATIO = Gross profit / net sales *100


GROSS PROFIT 2884.2 3442.39 3935.04

NET SALES 1917.71 2321.91 2654.5

GROSS PROFIT RATIO 150% 148.25% 148.24%

INTERPRETATION:-

2008- The gross profit ratio of the company is quite high, which is good for the company.

2009- There is a slight fall in the gross profit ratio in 2009 as compared to 2009.

2010- The gross profit ratio has again fallen by 0.1% which means that the efficiency of production has fallen.

CONCLUSION:- The gross profit ratio has declined over the years but it is still at an good position. The Gross profit ratio has fallen because of

high cost of goods sold due to unfavourable purchasing policies, lower selling price , excessive competition , over investment in plant and

machinery etc.


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b) NET PROFIT RATIO = net profit / net sales *100


NET PROFIT 3514.34 4213.7 4749.94

NET SALES 1917.71 2321.91 2654.5

NET PROFIT RATIO 183% 181.47% 180.63%

INTERPRETATION:-

2008- The net profit ratio of the company is at an good position and has huge profitability margins.

2009- The net profit ratio of the company has declined in 2009 as compared to 2008 and is at 181.47%

2010- The net profit ratio of the company has again declined as compared to 08-09 and is at 180.63%.

CONCLUSION:- The net profit ratio of the company in 2008-2009 is at a good position and could be said that it can face adverse economic

conditions such as price competition , low demand etc. and has a better profitability. But in 2009 & 2010 the net profit ratio has declined slightly

despite of rise in sales that means the company is facing an adverse economic conditions such as price rise , competition and low demand.


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c) OPERATING RATIO = operating expense / net sales *100


OPERATING EXPENSE 2547.85 3093.94 3420.17

NET SALES 1917.71 2321.91 2654.5

OPERATING RATIO 133% 133.25% 128.84%

INTERPRETATION:-

2008-

2009-

2010-

CONCLUSION:-


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d) EXPENSE RATIO = Selling and administration expense / Net SALES *100

Year Mar '08 Mar '09 Mar '10SELLING &ADMINISTRATIONEXPENSE 323.76 421.89 461.93

NET SALES 1917.71 2321.91 2654.5

OPERATING RATIO 17% 18.16% 17.40%

INTERPRETATION:-

2008- The selling and administrative expense of the company is 17% as a percentage of net sales , is not more.

2009- The selling and administrative expense of the company has further increased in 2009 as compared to 2008 due to high sales turnover.

2010- The selling and administrative expense of the company has declined despite of rise in sales which is a good sign.

CONCLUSION:- The selling and administrative expense of the company has risen in 2009 due to rise in sales but it has managed to keep it

low despite of rapid rise in sales which is good for the company.


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e) OPERATING PROFIT RATIO = Operating profit / Net sales *100


OPERATING PROFIT 400.5 507.51 592.54

NET SALES 1917.71 2321.91 2654.5

OPERATING RATIO 21% 21.85% 22.32%

INTERPRETATION:-

2008- The operating profit ratio is very high , which means that the company has more profits.

2009- The operating profit ratio or margin for profits have increased considerably over 2008.

2010- The operating profit ratio or margin for profits have further increased which is a good sign for the company.

CONCLUSION:- The operating profit ratio or margin for profits have increased considerably over the years due to increase in sales and it has

managed to control its cost of goods sold.


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5) PROFITABILITY RATIO RELATED TO INVESTMENT

a) INTEREST COVERAGE RATIO = ebit / interest charges


EBIT 404.85 495.27 633.62

INTEREST CHARGES 72.09 180.69 156.36

INTEREST COVERAGE

RATIO 5.61 2.74 4.05

INTERPRETATION:-

2008- The interest coverage ratio of the firm is not too high which implies that the firm has used its debt capacity.

2009- The interest coverage ratio of the firm has fallen considerably to a great extent and is at 2.74 which implies that the company is making

excessive use of its debt.

2010- The interest coverage ratio has again fallen to a great extent in 2010 and is at 4.05 which means that the company has not made good

use of its debt.

CONCLUSION:- The interest coverage ratio of the firm in 2008 was quite high which implies that he firm has unused debt capacity but in

2009 the interest has fallen to a great extent which indicates that the firm is making excessive use of its debt and does not have the ability to

offer assured payment of interest to the creditors.


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c) PRICE / EARNING RATIO = market price / EPS


MARKET PRICE NA NA 519.85

EARNING PER SHARE 14.36 13.17 21.21

PRICE / EARNING RATIO NA NA 24.50.

INTERPRETATION:- The price earning ratio of the firm is satisfactory. It reflects the time which shall be taken by the firm to return the amount

invested by the investors at the present rate of earnings.

d) RETURN ON INVESTMENT = EBIT / cap. employed *100


EBIT 404.85 495.27 633.62

CAP. EMPLOYED 1848.3 2552 2564

RETURN ONINVESTMENT 21.90 % 19.40 % 24.71 %

INTERPRETATION:-

2008- The return on investment of the firm is significantly very high and is at 21.90%.

2009- The return on investment of the firm has fallen significantly in 2009 as compared to 2008 which means that the resources of the firm was

not used efficiently.

2010- The return on investment position of the firm has further increased and is at an all time high at 24.71%.

CONCLUSION:- The return on investment of the firm is fluctuating over the years. the ratio reveals that how well the resources of the firm are

being used, lower the ratio , bad are the results.


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e) DIVIDEND PER SHARE = Total profits available for equity shareholders / No. of shares


TOTAL PROFITS

AVAILABLE FOR

EQUITY

SHAREHOLDERS -671.74 -871.04 -1014.97

NO. OF SHARES 2090.13 2090.13 2090.13

DIVIDEND PER SHARE -0.32 -0.41 -0.48

INTERPRETATION:-

2008-

2009-

2010-

CONCLUSION:-

f) DIVIDEND PAYOUT RATIO = DPS / EPS


DIVIDEND PER SHARE -0.32 -0.41 -0.48

EARNING PER SHARE 14.36 13.17 21.21

DIVIDEND PAYOUTRATIO -0.02 -0.03 -0.02

INTERPRETATION:-

2008-


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2009-

2010-

CONCLUSION:-

g) RETURN ON GROSS CAP. EMPLOYED = EBIT / gross cap.* 100


EBIT 404.85 495.27 633.62

GROSS CAPITAL

EMPLOYED 1392.5 2035.9 1968.94

RETURN ON GROSS CAP.

EMPLOYED 0.29 0.24 0.32

INTERPRETATION:-

2008-

2009-

2010-

CONCLUSION:-


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h) RETURN ON NET CAP. EMPLOYED = EBIT / net cap. employed * 100


EBIT 404.85 495.27 633.62

NET CAPITAL

EMPLOYED 888.88 1473.47 1323.32

RETURN ON NET

CAPITAL EMPLOYED 0.45 0.33 0.47

INTERPRETATION:-

2008-

2009-

2010-

CONCLUSION:-


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BIBLIOGRAPHY:-

1)profit & loss a/c was taken from-http://www.moneycontrol.com/financials/piramalhealth/profit-loss/OH

2)balance sheet was taken from-http://www.moneycontrol.com/financials/piramalhealth/balance-sheet/OH

3)company facts and management details was taken from:-http://www.moneycontrol.com/company-facts/piramalhealth/management/OH

4)company history was taken from-http://www.moneycontrol.com/company-facts/piramalhealth/history/OH

5)companys listing detail was taken from-http://www.moneycontrol.com/company-facts/piramalhealth/listing/OH

6)competitors detail was taken from-http://www.moneycontrol.com/competition/piramalhealth/comparison/OH

7)companys location detail was taken from-http://www.moneycontrol.com/company-facts/piramalhealth/locations/OH

8)companys stock prices were taken from-

http://www.bseindia.com/stockinfo/stockprc.aspx

term paper of accounting for mangers

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