Financial Performance Analysis - Techshristi · Financial Accounts for Managers : Project Report PGDM Exec - Term I 2 COMPANY PROFILE HISTORY Emami, which started as a cosmetics manufacturing

Financial Performance Analysis

Emami Ltd

Submitted By: Amit Dhawan 11EX-006 Bishnu Kumar 11EX-013 Harendra Singh Rawat 11EX-020 Kumar Abhishek 11EX-028 Pankaj Mohindroo 11EX-038

Financial Accounts for Managers : Project Report PGDM Exec - Term I

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Contents

COMPANY PROFILE ......................................................................................................................................................... 2

HISTORY ....................................................................................................................................................................... 2

Vision ........................................................................................................................................................................... 2

Mission ........................................................................................................................................................................ 2

Board of Directors & Management Team ....................................................................................................................... 3

Board of Directors ....................................................................................................................................................... 3

Management team ...................................................................................................................................................... 3

Profile of the Organization .............................................................................................................................................. 4

INTRODUCTION TO THE STUDY ....................................................................................................................................... 5

Financial statements Analysis ......................................................................................................................................... 5

Annual Report & Ratio Analysis Details of Emami Ltd. ................................................................................................... 5

RATIO ANALYSIS .............................................................................................................................................................. 6

Current Ratio ....................................................................................................................................................... 6

Quick Ratio .......................................................................................................................................................... 6

Return on Assets (ROA) ....................................................................................................................................... 7

Return on Equity (ROE) ....................................................................................................................................... 7

Profit Margin ....................................................................................................................................................... 8

Asset Turnover Ratio ........................................................................................................................................... 8

Debtors Turnover Ratio ....................................................................................................................................... 9

Inventory Turnover Ratio .................................................................................................................................... 9

Debt to Equity Ratio ............................................................................................................................................ 9

Interest Coverage Ratio ..................................................................................................................................... 10

Earnings per Share (EPS) ................................................................................................................................... 10

Price Earning Ratio (PE) ..................................................................................................................................... 11

Dividend Payout Ratio ....................................................................................................................................... 11

Equity Multiplier ................................................................................................................................................ 12

COMPARATIVE STATEMENTS ........................................................................................................................................ 13

Comparative Figures of Emami Ltd as on 31st March 2010-2011 ............................................................................ 14

Comparative Analysis ................................................................................................................................................ 15

References ..................................................................................................................................................................... 16


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COMPANY PROFILE

HISTORY Emami, which started as a cosmetics manufacturing company in the year 1974, advancing with increased momentum has expanded into Emami Group of Companies of today. Even though cosmetics and toiletries continue to be the main thrust area, the other

companies in the Emami Group are performing equally brilliantly. From health care institution to medicines, from real estate to retailing and, from paper to writing instruments,

Hospital, Emami is creating one success story after another.

Vision A company, which with the help of nature, caters to the consumers’ needs and their inner

cravings for dreams of better life, in the fields of personal and health care, both in India and throughout the world.

Mission

To sharpen consumer insights to understand and meet their needs with value-added differentiated products which are safe, effective & fast. To integrate our dealers, distributors,

retailers and suppliers into the Emami family, thereby strengthening their ties with the company. To recruit, develop and motivate the best talents in the country and provide them with an environment which is demanding and challenging. To strengthen and foster in the

employees, strong emotive feelings of oneness with the company. To uphold the principals of corporate governance and move towards decentralization to generate long term

maximum returns for all stake owners. To contribute whole heartedly towards the environment and society and to emerge as a model corporate citizen.


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Board of Directors & Management Team

Board of Directors

The efficient functioning of this reputed company rests with the following personalities.

Shri R S Agarwal Chairman Shri R S Goenka Director Shri Sushil Kr. Goenka Managing Director

Shri A V Agarwal, Director Shri Mohan Goenka, Director

Shri H V Agarwal, Director Shri Viren J Shah, Director Shri K K Khemka, Director

Shri S N Jalan, Director Shri Vaidya S Chaturvedi Director

Shri K N Memani Director Shri S K Todi Director

Management team

Smt. P. Sureka Brand Director Shri Manish Goenka Brand Director Shri Prasant Goenka Brand Director

Shri Dhiraj Agarwal Media Director Shri Hari Gupta President – Sales

Shri Ashok Dasgupta President – Operation Shri R.D. Daga Chief of Legal Affairs Shri R.K. Surana Sr. V.P. – Purchase & Development

Shri N.H. Bhansali Sr. V.P. – Finance Shri S. Rajagopalan Sr. V.P. – Production

Shri R.C. Gattani Sr. V.P. – Projects & Development Shri D. Poddar V.P. – Co-ordination Shri A.B. Mukherjee V.P. – Logistics

Shri A. Ghose V.P. – Ayurvedic Division Shri A.K. Rajput V.P. –Operations

Shri S. Grover V.P. – Rural Marketing Shri S.K. Mandal G.M. – Systems Shri Vimal Kr. Pande G.M. – Sales

Shri P.N. Balakrishnan G.M. –Technical Shri A.K. Joshi Company Secretary

Shri H.K.Goenka G.M. – Works Dr. Neena Sharma G.M. – Ayurveda (R&D) Shri Raj Kr. Gupta G.M. – Purchase

Shri T.R. Rajan G.M. – Production Ms. Ratna Sinha Head HR


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Profile of the Organization

Emami Limited is in the business of manufacturing personal, beauty and health care products. The company manufactures herbal and Ayurvedic products through the use of modern scientific laboratory practices. This blend enables the company to manufacture

products that are mild, safe and effective. The company's product basket comprises over 20 products, the major being Boroplus Antiseptic Cream, Navratna Oil, Boroplus Prickly Heat

Powder, Sona Chandi Chyawanprash and Amritprash, Mentho Plus Pain Balm, Fast Relief, Golden Beauty Talc, Madhuri Range of Products and others. The products are sold across all states in India and in countries like Nepal, Sri Lanka, the Gulf countries, Europe, Africa and

the Middle East, among others. Emami’s products are manufactured in Kolkata, Puducherry, Guwahati and Mumbai. The

company commenced operations at its fully automated manufacturing unit in Amingaon, Guwahati in 2003-04. The company's dispersed manufacturing facilities are complemented with a strong product

throughput, facilitated by a robust distribution network of over 2100 direct distributors and 3.9 lakhs retail outlets. With a view to reach its products deeper into the country, direct

selling has been extended to rural villages. As a result, rural sales increased substantially in 2003-04 compared to the previous year. Emami is headquartered in Kolkata. The company's branch offices are located across 27 cities in India.


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INTRODUCTION TO THE STUDY

Financial statements are prepared and presented for the external users of accounting information. As these statements are used by investors and financial analysts to examine the firm’s performance in order to make investment decisions, they should be prepared very

carefully and contain as much investment decisions, they should be prepared very carefully and contain as much information as possible. Preparation of the financial statement is the

responsibility of top management. The financial statements are generally prepared from the accounting records maintained by the firm. Financial performance is an important aspect which influences the long term stability,

profitability and liquidity of an organization. Usually, financial ratios are said to be the parameters of the financial performance. The Evaluation of financial performance had been

taken up for the study with “EMAMI LIMITED” as the project. Analysis of Financial performances are of greater assistance in locating the weak spots at the

Emami limited eventhough the overall performance may be satisfactory. This further helps in

Financial forecasting and planning. Communicate the strength and financial standing of the Emami limited. For effective control of business.

Financial statements Analysis

The financial statements provide some extremely useful information to the extent that the balance sheet mirrors the financial position on a particular date in terms of the structure of assets, liabilities and owners’ equity, and so on and the profit and loss account shows the

results of operations during a certain period of time in terms of the revenues obtained and the cost incurred during the year. Thus, the financial statements provide a summarized view

of the financial position and operations of a firm. Therefore, a lot can be learnt about a firm from a careful examination of its financial statements. The analysis of financial statements is thus, an important aid to financial analysis. The focus of financial analysis is on key figures in the financial statements and the significant relationship that exists between them. The analysis of financial statements is a process of

evaluating the relationship between component parts of financial statements to obtain a better understanding of the firm’s position and performance. In brief, the financial analysis is the process of selection, relation and evaluation.

Annual Report & Financial Details of Emami Ltd.

Emami.pdf Emami Ltd - Financial Details.xlsx


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RATIO ANALYSIS

Ratio analysis is a widely-use tool of financial analysis. It can be used to compare the risk and return relationships of firms of different sizes. It is defined as the systematic use of ratio

to interpret the financial statements so that the strengths and weakness of a firm as well as its historical performance and current financial condition can be determined. The term ratio refers to the numerical or quantitative relationship between two items and variables. These

ratios are expressed as (i) percentages, (ii) fraction and (iii) proportion of numbers.

Current Ratio

The current ratio is the ratio of total current assets to total current liabilities. It is calculated by dividing current assets by current liabilities:

Current Ratio = Current Assets / Current Liabilities

The current assets of a firm, as already stated, represent those assets which can be, in the ordinary course of business, converted into cash within a short period of time, normally not

exceeding one year and include cash and bank balances, marketable securities, inventory of raw materials, semi-finished (work-in-progress) and finished goods, debtors net of provision for bad and doubtful debts, bills receivable and prepaid expenses. The current liabilities

defined as liabilities which are short-term maturing obligations to be met, as originally contemplated, within a year, consist of trade creditors, bills payable, bank credit, provision

for taxation, dividends payable and outstanding expenses.

In Rs Lac Current Asset Current Liability Current Ratio

31-03-2011 Rs. 58,378.58 Rs. 15,370.05 3.80

31-03-2010 Rs. 41,140.55 Rs. 15,374.66 2.68

Analysis : As a conventional rule, a current ratio of 2:1 is considered satisfactory. This rule

is base on the logic that in a worse situation even if the value of current assets becomes half, the firm will be able to meet its obligation. The current ratio represents the margin of safety for creditors. From the above comparison the fact is depicted that the liquidity

position of the Emami limited is satisfactory because for the given two years, its current ratio is not below the standard ratio 2:1.

Quick Ratio

The liquidity ratio is a measure of liquidity designed to overcome this defect of the current ratio. It is often referred to as quick ratio because it is a measurement of a firm’s ability to

convert its current assets quickly into cash in order to meet its current liabilities. Thus, it is a measure of quick or acid liquidity. The acid-test ratio is the ratio between quick assets and current liabilities.

Quick Ratio = Quick Assets / Current Liabilities


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The term quick assets refers to current assets which can be converted into cash immediately or at a short notice without diminution of value.

Quick Asset = Current Asset - Reserve & Surplus - Inventories

In Rs Lac Quick Asset Current Liability Quick Ratio

31-03-2011 Rs. 46,187.47 Rs. 15,370.05 3.01

31-03-2010 Rs. 33,279.58 Rs. 15,374.66 2.16

Analysis : As a quick ratio of 1:1 is considered satisfactory as a firm can easily meet all current claims. It is a more rigorous and penetrating test of the liquidity position of a firm.

From the data above, it can be said that the liquidity position of the Emami limited is satisfactory because the quick ratio is not below the standard ratio of 1:1.

Return on Assets (ROA)

It's an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficiently the assets of the company is being utilized to generate earnings. It

is calculated by dividing a company's annual earnings by its total assets.

ROA = Net Income / Total Assets

In Rs Lac Net Income Total Assets ROA

31-03-2011 Rs. 22,749.22 Rs. 92,609.12 0.25

31-03-2010 Rs. 16,540.27 Rs. 88,538.42 0.19

Analysis : As per the data above, Emami had 25% ROA in 2010-11 whereas 19% in 2009-

10. This indicates that it is converting its assets into profits more efficiently now than previous year. It indicates that the management is making more profit from the investment. This ratio can be used to attract investors as they can expect more return out of their

investment.

Return on Equity (ROE)

This is also known as return on net worth or return on shareholder's fund. The preference shareholders get the dividend on their holdings at a fixed rate and before dividend to equity

shareholders, the real risk remains with the equity shareholders. Moreover, they are the owners of total profits earned by the firms after paying dividend on preference shares. Therefore this ratio attempts to measure the firm’s profitability in terms of return to equity

shareholders. This ratio is calculated by dividing the profit after taxes and preference dividend by the equity capital.

ROE = Net Income / Equity Capital


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In Rs Lac Net Income Equity Capital ROE

31-03-2011 Rs. 22,749.22 Rs. 72,561.94 0.31

31-03-2010 Rs. 16,540.27 Rs. 64,832.98 0.26

Analysis : This indicates the company's efficiency in converting the capital investment into profit. As we can see, the ROE of Emami Ltd was 31% in 2010-11 as compared to 26% in

2009-10. This means that the company has comparatively generated more profit out of the investment this year.

Profit Margin

It is a ratio of profitability calculated as income divided by revenues, or profits divided by sales. It measures how much out of every rupee of sales a company actually keeps in

earnings. Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.

Profit Margin = PBIT / Total Sales

In Rs Lac PBIT Sales Profit Margin

31-03-2011 Rs. 26,749.47 Rs. 1,22,115.39 0.22

31-03-2010 Rs. 20,057.92 Rs. 1,00,685.42 0.20

Analysis : Emami's profitability of 22% in 2010-11 as compared to other companies like Gillette India (8%) is very good. As per the data above, the profit has also increased by 2% from the previous year's profit. So, it's generating more profit from its sales this year.

Asset Turnover Ratio

Asset turnover is the amount of sales generated for every dollar's worth of assets. It

measures a firm's efficiency at using its assets in generating sales or revenue. The higher the number the better. It also indicates pricing strategy: companies with low profit margins

tend to have high asset turnover, while those with high profit margins have low asset turnover.

Asset Turnover = Revenue / Total Assets

In Rs Lac Revenue Total Assets Asset Turnover

31-03-2011 Rs. 1,22,115.39 Rs. 92,609.12 1.32

31-03-2010 Rs. 1,00,685.42 Rs. 88,538.42 1.14

Analysis : As shown above, the company is generating more sales from the total assets employed when compared to previous year. It shows a rise in utilization of asset to generate sales by 18%. This indicates that the company is utilizing its assets more efficiently.


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Debtors Turnover Ratio

An accounting measure used to quantify a firm's effectiveness in extending credit as well as

collecting debts. The debtors turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets. By maintaining debtors, firms are indirectly extending interest-free

loans to their clients. A high ratio implies either that a company operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient.

Debtors Turnover = Sales / Debtors

In Rs Lac Revenue Debtors Debtors Turnover

31-03-2011 Rs. 1,22,115.39 Rs. 9,127.70 13.38

31-03-2010 Rs. 1,00,685.42 Rs. 7,273.47 13.84

Analysis : The figure in the above table indicates a pretty high Debtor Turnover Ratio, hence, it indicates that Emami has a pretty good credit collection policy.

Inventory Turnover Ratio

It is an indication of the velocity of the movement of the stock during the year. In case of

decrease in sales, this ratio will decrease. This serves as a check on the control of stock in a business. This ratio will reveal the excess stock and accumulation of obsolete or damaged

stock. The ratio of net sales to stock is satisfactory relationship, if the stock is more than three-fourths of the net working capital. This ratio gives the rate at which inventories are converted into sales and then into cash and thus helps in determining the liquidity of a firm.

Inventory Turnover = Cost of Goods Sold / Inventory

In Rs Lac Cost of Goods Sold Inventory Inventory Turnover

31-03-2011 Rs. 51,132.04 Rs. 12,191.11 4.19

31-03-2010 Rs. 38,204.41 Rs. 7,860.97 4.86

Analysis : The table above shows that the inventories are converted 4 times into sales

which is a good number as compared to a few other companies in the same sector. Though the ratio has decreased in 2010-11 as compared to 2009-10, its still a satisfactory number.

Debt to Equity Ratio

This ratio indicates the extent to which debt is covered by shareholders’ funds. It reflects the

relative position of the equity holders and the lenders and indicates the company’s policy on the mix of capital funds. It indicates to what extent the firm depends upon outsiders for its

existence. For the creditors, this provides a margin of safety. For the owners, it is useful to measure the extent to which they can gain the benefits of maintaining control over the firm with a limited investment:” The debt-equity ratio states unambiguously the amount of assets


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provided by the outsiders for every one rupee of assets provided by the shareholders of the company.

Debt to Equity Ratio = Total Debt / Total Equity

In Rs Lac Total Debt Equity Capital Debt to Equity Ratio

31-03-2011 Rs. 22,937.47 Rs. 72,561.94 0.32

31-03-2010 Rs. 25,905.71 Rs. 64,832.98 0.40

Analysis : The lower the ratio, the better is the company's status to pay off its debts. The above table indicates that the Total Debt of the company has decreased from 2009-10 to 2010-11 and the Equity Capital has increased. So, the Debt to Equity Ratio has also

decreased when compared to the previous year's data. Hence, we can conclude that the company's status to pay off its debt is very good.

Interest Coverage Ratio

The times interest earned shows how many times the business can pay its interest bills from profit earned. Present and prospective loan creditors such as bondholders, are vitally

interested to know how adequate the interest payments on their loans are covered by the earnings available for such payments. Owners, managers and directors are also interested in the ability of the business to service the fixed interest charges on outstanding debt. It is

always desirable to have profit more than the interest payable. In case profit is either equal or lesser than the interest, the position will be unsafe. It will show that there this nothing

left for the shareholders and the position of the lendors is also unsafe. A high ratio is a sign of low burden of debt servicing and lower utilization of borrowing capacity. From the points of view of creditors, the larger the coverage, the greater the ability of the firm to handle

fixed charges liabilities and the more assessed the payment of interest to the creditors. In contrast the low ratio signifies the danger the signal that the firm is highly dependent on

borrowings and its earnings cannot meet obligations fully.

Interest Coverage Ratio = PBIT / Interest

In Rs Lac PBIT Interest Interest Coverage

31-03-2011 Rs. 27,930.22 Rs. 1,180.75 23.65

31-03-2010 Rs. 22,152.44 Rs. 2,094.52 10.58

Analysis : The Interest coverage ratio is increasing from the previous year. A high ratio is a

sign of low burden of debt servicing. So, the company is more secure in term of paying of its debt interests. Therefore this ratio is satisfactory to the company.

Earnings per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common

stock. Earnings per share serves as an indicator of a company's profitability. Earnings per


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share is generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-to-earnings valuation

ratio.

EPS = ( PAT - Preference Dividend ) / No. of Outstanding Shares

In Rs Lac PAT - Pref Div. No. Of Shares EPS

31-03-2011 Rs. 22,749.22 1,513.12 15.03

31-03-2010 Rs. 16,540.27 1,513.12 10.93

Analysis : The increase in EPS indicates that there is more profit attached to each outstanding share. This is a good sign for the shareholders in terms of trusting the company.

Price Earning Ratio (PE)

Its a valuation ratio of a company's current share price compared to its per-share earnings. A high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole

story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, to the market in general or against the company's own

historical P/E. It would not be useful for investors using the P/E ratio as a basis for their investment to compare the P/E of a technology company (high P/E) to a utility company (low P/E) as each industry has much different growth prospects.

PE Ratio = Market Value per Share / EPS

In Rs Lac Share Market Price EPS PE Ratio

31-03-2011 Rs. 398.00 Rs. 15.03 26.47

31-03-2010 Rs. 312.50 Rs. 10.93 28.59

Analysis : From the above table we see that the Market Price of Emami share has increased by approximately 27% where as the EPS has increased by almost 50%. This caused the

decrease in the PE ration of the company from 2009-10 to 2010-11.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends. The payout ratio provides an

idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio.

Dividend Payout = Dividend / PAT

In Rs Lac Dividend PAT Dividend Payout

31-03-2011 Rs. 5,295.91 Rs. 22,749.22 0.23

31-03-2010 Rs. 4,539.35 Rs. 16,540.27 0.27


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Analysis : This indicates the percentage of Profit that was distributed as dividend to the share holders. As per the data we can see that the profit increased by 37.5% when

compared to the previous year, but the increase in distributed divided was 16.67%. Hence, we can conclude that, the company retained major part of the profit rather than distributing

it to the shareholders.

Equity Multiplier

It measures the financial leverage of a company. In other words, this ratio shows a

company's total assets per rupee of stockholders' equity. A higher equity multiplier indicates higher financial leverage, which means the company is relying more on debt to finance its assets.

Equity Multiplier = Total Assets / Total Equity Capital

In Rs Lac Total Assets Equity Capital Equity Multiplier

31-03-2011 Rs. 92,609.12 Rs. 72,561.94 1.28

31-03-2010 Rs. 88,538.42 Rs. 64,832.98 1.37

Analysis : We can see that the total assets of the company is more than its Equity Capital, hence, its relying a lot on debts to finance its assets. So, it has a high financial leverage

which save a lot of tax to the company. Though we see from the ratio that it has decreased from the previous year, which means it has paid off some of its debts.


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COMPARATIVE STATEMENTS

Comparative study of financial statement is the comparison of the financial statement of the business with the previous year’s financial statements and with the performance of other

competitive enterprises, so that weaknesses may be identified and remedial measures applied. It can be prepared for both types of financial statements i.e., Balance sheet as well as profit and loss account. The comparative profits and loss account will present a review of

operating activities of the business. The comparative balance shows the effect of operations on the assets and liabilities that change in the financial position during the period under

consideration. Comparative analysis is the study of trend of the same items and computed items into or

more financial statements of the same business enterprise on different dates. The presentation of comparative financial statements, in annual and other reports, enhances the

usefulness of such reports and brings out more clearly the nature and trends of current changes affecting the enterprise.

While the single balance sheet represents balances of accounts drawn at the end of an accounting period, the comparative balance sheet represent not nearly the balance of

accounts drawn on two different dates, but also the extent of their increase or decrease between these two dates. The single balance sheet focuses on the financial status of the concern as on a particular date, the comparative balance sheet focuses on the changes that

have taken place in one accounting period. The changes are the direct outcome of operational activities, conversion of assets, liability and capital form into others as well as

various interactions among assets, liability and capital.


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Comparative Figures of Emami Ltd as on 31st March 2010-2011

The below vital figures has been extracted from the Balance Sheet and Profit & Loss A/C of Emami Ltd.

Particulars Mar, 2011 Mar, 2010 Change

in Value Percentage

Change Rupees in Lacs

Total Sales/Revenue A Rs. 1,22,115.39 Rs. 1,00,685.42 Rs. 21,430 21.28 %

Cost of Goods Sold B Rs. 51,132.04 Rs. 38,204.41 Rs. 12,928 33.84 %

PAT C Rs. 22,749.22 Rs. 16,540.27 Rs. 6,209 37.54 %

Tax D Rs. 4,000.25 Rs. 3,517.65 Rs. 483 13.72 %

Interest E Rs. 1,180.75 Rs. 2,094.52 Rs. (914) (43.63) %

PBIT F Rs. 26,749.47 Rs. 20,057.92 Rs. 6,692 33.36 %

Current Asset G Rs. 58,378.58 Rs. 41,140.55 Rs. 17,238 41.9 %

Current Liability H Rs. 15,370.05 Rs. 15,374.66 Rs. (5) (.03) %

Total Depreciation I Rs. 31,452.17 Rs. 20,261.85 Rs. 11,190 55.23 %

Reserve & Surplus J Rs. 68,301.65 Rs. 61,937.17 Rs. 6,364 10.28 %

Inventories K Rs. 12,191.11 Rs. 7,860.97 Rs. 4,330 55.08 %

Prepaid Expense L Rs. 0.00 Rs. 0.00 Rs. 0 -

Fixed Assets Rs. 48,892.48 Rs. 56,705.23 Rs. (7,813) (13.78) %

Liquid Assets Rs. 43,008.53 Rs. 25,765.89 Rs. 17,243 66.92 %

Investments Rs. 708.11 Rs. 6,208.46 Rs. (5,500) (88.59) %

Total Asset N Rs. 92,609.12 Rs. 88,679.58 Rs. 3,930 4.43 %

Quick Asset (F-J-K) O Rs. 46,187.47 Rs. 33,279.58 Rs. 12,908 38.79 %

Preference Dividend Q Rs. 0.00 Rs. 0.00 Rs. 0 -

Share Capital R Rs. 1,513.12 Rs. 1,513.12 Rs. 0 0 %

Share Current Face Value S Rs. 1.00 Rs. 1.00 Rs. 0 0 %

Long Term Loan T Rs. 22,937.47 Rs. 25,905.71 Rs. (2,968) (11.46) %

Short Term Loan U Rs. 0.00 Rs. 0.00 Rs. 0 -

Total Debtors V Rs. 9,127.70 Rs. 7,273.47 Rs. 1,854 25.49 %

P/L A/c Balance W Rs. 2,747.17 Rs. 1,382.69 Rs. 1,364 98.68 %

Share Holders Equity (J+R+W) X Rs. 72,561.94 Rs. 64,832.98 Rs. 7,729 11.92 %

Share Market Price Y Rs. 398.00 Rs. 312.50 Rs. 86 27.36 %

Number of Shares (R/S) Z 1,513.120 1,513.120 Rs. 0 0 %

Proposed Dividend AA Rs. 5,295.91 Rs. 4,539.35 Rs. 757 16.67 %


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Comparative Analysis The comparative analysis of the vital numbers from the Balance Sheet and Profit & Loss A/C

of year 2010-11 and 2009-10 of Emami Ltd are as below -

Increase in Sales by 21.28% Increase in Net Profit by 37.54% Increase in tax by 13.72%. This was due to the increase in PAT of the company.

Decrease in interest by 43.63%. This indicates the reduction in debts/loans of the company. The decrease in Long Term Loan was 11.46%

Decrease in Fixed Assets by 13.78%. This is because fixed assets worth of Rs 7813 were sold off.

Companies Cash Reserve increased by 10.28% due to increase in sales and profit retention. This justifies the decrease in Dividend Payout Ratio by 0.04%.

Approx 89% of the investments were liquidated. A part of the recovered investment

was utilized to pay off the long term loans. Total Net worth was increased by approx 12%. The reason for this increase was the

increase in the company's profit and the earnings retention. Increase in debtors by more than 25%. No change in share capital or share face value.

Increase in share market price by 27.36% comparing the value on year ends. Increase in Current Assets by Rs. 17,238 Lac (42%) due to increase in Inventories,

Debtors, Cash and Short Term Loans. No Short Term Loan taken by the company. Increase in distributed dividend by Rs. 757 Lac (16.67%) compared to previous year.


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References

www.investopedia.com www.emamigroup.com

www.wikipedia.com A STUDY ON FINANCIAL PERFORMANCE USING RATIO ANALYSIS, A.GAYATHRIDEVI

http://www.investopedia.com/

http://www.emamigroup.com/

http://www.encyclopedia.com/

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Financial Performance Analysis - Techshristi · Financial Accounts for Managers : Project Report PGDM Exec - Term I 2 COMPANY PROFILE HISTORY Emami, which started as a cosmetics manufacturing