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FINANCIAL STATEMENT ANALYSIS

Tools and Techniques

Multi step income statement

FORMAT OF MULTI STEP INCOME STATEMENT

Gross sales

Less: Excise DutyNet Sales

Material Cost

Manufacturing expenses

Cost of Goods Sold

GP

Employees remuneration(other than factory)

Administrative Exp, Selling and other Expenses

add: other incomes(operating)

PBDIT

Depreciation

Amortisationimpairment

Operating profit(OP/PBIT)

Interest Charges and finance charges

add: other incomes(non- operating)

Profit Before tax and extra ordinary items(PBTEOT)

add or Less: extraordinary items

PBT for the year

add or Less:prior year adjustments

PBT

provision for tax:

Current Income tax

add or less: Deffered Tax liability /asset

add: fringe benefitsadd or less: tax adjustments for previous year

Total Income Tax

NP/PAT

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2007 2006

Sales 106060.9 85498.6

Less: Excise Duty 13138.6 10804.8

Net Sales 92922.3 74693.8

wind power generated and captively consumed 330.5 199.5

other income(includes op 1047.1 and 88.37) 7507.7 6170.2

100760.5 81063.5Expenditure

Materials 69010.1 53246

other expenses 12344.8 10118.4

Interest Charges and finance charges 53.4 3.4

Depreciation 1902.6 1910

83310.9 65277.8

Less: Expenses capitalised 320.5 248.1

82990.4 65029.7

Compensation paid under VRS 385.7 226.4

Export incentives incurred in previous year written off 103.9

83480 65256.1

PBT -Y 17280.5 15807.4provision for tax:

Current Income tax 5005.5 5135.5

add or less: Deffered Tax liability /asset -134.1 -394.4

add: fringe benefits tax 30 50

add or less: tax adjustments for previous year 8.6 8.7

4910 4799.8

Add: Tax credits for earlier years 225.1

NP/PAT 12370.5 11232.7

MULTI STEP ANALYSIS

2007 2006

Sales 106060.9 85498.6

Less: Excise Duty 13138.6 10804.8Net Sales 92922.3 74693.8

Materials 69010.1 53246

other expenses 12344.8 10118.4

Less: Expenses capitalised 320.5 248.1

Add:other operating incomes

wind power generated and captively consumed 330.5 199.5

other income 1047.1 88.37

PBIDT 13265.5 11865.37

Depreciation 1902.6 1910

OP/PBIT 11362.9 9955.37

Interest Charges and finance charges 53.4 3.4

other income 6460.6 6081.83PBTEOT 17770.1 16033.8

Extraordinary items

Compensation paid under VRS 385.7 226.4

Export incentives incurred in previous year written off 103.9

PBT Y 17280.5 15807.4

add or less: tax adjustments for previous year 8.6 8.7

PBT 17271.9 15798.7

provision for tax:

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Current Income tax 5005.5 5135.5

add or less: Deffered Tax liability /asset -134.1 -394.4

add: fringe benefits tax 30 50

Tax credits for earlier years -225.1

total tax 4901.4 4566

NP/PAT 12370.5 11232.7

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COMPARITIVE 2007 2006 Increase/decrease over base year

Sales 106060.9 85498.6 20562.3

Less: Excise Duty 13138.6 10804.8 2333.8

Net Sales 92922.3 74693.8 18228.5

Materials 69010.1 53246 15764.1

other expenses 12344.8 10118.4 2226.4

Less: Expenses capitalised 320.5 248.1 72.4Add:other operating incomes

wind power generated and captively consumed 330.5 199.5 131

other income 1047.1 88.37 958.73

PBIDT 13265.5 11865.37 1400.13

Depreciation 1902.6 1910 -7.4

OP/PBIT 11362.9 9955.37 1407.53

Interest Charges and finance charges 53.4 3.4 50

other income 6460.6 6081.83 378.77

PBTEOT 17770.1 16033.8 1736.3

Extraordinary items

Compensation paid under VRS 385.7 226.4 159.3

Export incentives incurred in previous year written 103.9 103.9PBT Y 17280.5 15807.4 1473.1

add or less: tax adjustments for previous year 8.6 8.7 -0.1

PBT 17271.9 15798.7 1473.2

provision for tax:

Current Income tax 5005.5 5135.5 -130

add or less: Deffered Tax liability /asset -134.1 -394.4 260.3

add: fringe benefits tax 30 50 -20

Tax credits for earlier years -225.1 225.1

total tax 4901.4 4566 335.4

NP/PAT 12370.5 11232.7 1137.8

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%

24.05

21.60

24.40

29.61

22.00

29.18

65.66 other income change is more than operations

1084.90 other income change is more than operations

11.80

-0.39 use of asset for higher revenues still lower dep

14.14

1470.59

6.23

10.83

70.36

0.009.32

-1.15

9.32 PBT is low even though incomes are high because

of Int and finance charges

-2.53

-66.00

-40.00

-100.00

7.35

10.13

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COMMON SIZED

comparison between two or more companies in the same industry or different industries with different

capital structure and revenues.

2007 % 2006

Sales 106060.9 114.14 85498.6

Less: Excise Duty 13138.6 14.14 10804.8

Net Sales 92922.3 100.00 74693.8Materials 69010.1 74.27 53246

other expenses 12344.8 13.29 10118.4

Less: Expenses capitalised 320.5 0.34 248.1

Add:other operating incomes

wind power generated and captively consumed 330.5 0.36 199.5

other income 1047.1 1.13 88.37

PBIDT 13265.5 14.28 11865.37

Depreciation 1902.6 2.05 1910

OP/PBIT 11362.9 12.23 9955.37

Interest Charges and finance charges 53.4 0.06 3.4

other income 6460.6 6.95 6081.83

PBTEOT 17770.1 19.12 16033.8Extraordinary items

Compensation paid under VRS 385.7 0.42 226.4

Export incentives incurred in previous year written off 103.9 0.11

PBT Y 17280.5 18.60 15807.4

add or less: tax adjustments for previous year 8.6 0.01 8.7

PBT 17271.9 18.59 15798.7

provision for tax: 0.00

Current Income tax 5005.5 5.39 5135.5

add or less: Deffered Tax liability /asset -134.1 -0.14 -394.4

add: fringe benefits tax 30 0.03 50

Tax credits for earlier years 0.00 -225.1

total tax 4901.4 5.27 4566

NP/PAT 12370.5 13.31 11232.7

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%

114.47

14.47

10071.29

13.55

0.33

0.27

0.12

15.89

2.56

13.33

0.00

8.14

21.47

0.30

0.00

21.16

0.01

21.15

0.00

6.88

-0.53

0.07

-0.30

6.11

15.04