Forecasting Financial Statements

Forecasting Financial Statements

Amiya Sahu, GIM, 2014

Users

• Analysts: to forecast CFs, EPS and other indicators in valuation, credit analysis

• Managers of the firm– Plan firm’s financial needs– Overall planning & operations

• Inventory levels, receivables, capex, dividends, taxes

– Performance evaluation


Methods

• Percentage of Sales: looking at past 3 yr. data – Inventory was 13.5, 12.8, and 14.2 % of sales for yr1, yr2 &

yr3 respectively. On average, inventory has been 13.5 % of sales. Thus, given the sales forecast of Rs. 350 crores, inventory is forecasted to be 0.135(350) = Rs. 47.3 crore

– On average accounts payable has been 8.7 % of sales; thus, accounts payable is estimated to be 0.087(350) =Rs. 30.5 crore


Methods

• Ratios: – Assuming all sales were on credit and a 365 day year, the firm

took 38, 40, and 43 days for collection of receivables in yr1, yr2 & yr3 respectively.

– Given these ratios and some planned improvements in the billing and collection processes, management believes that next year’s receivables will be collected in 40 days, on average.

– Thus, next year’s receivables is forecasted to be 40 (350/365) = Rs. 38.4 crore.

– The firm’s profit margin averaged 5.4 %. Using this three-year average, net income for 2015 is forecasted to be 0.054($350) = Rs. 18.9 crore


Methods

• Regression: The cash balances is plotted against sales and the "best fit" lines drawn in y = 0.05 (sales) + 0.93. This statistical relationship along with the sales forecast of Rs. 350 can be can be used to forecast the new level of cash. – 2015 forecasted cash will be Rs. 18.5 crore = 0.93 + 0.05(350). – Unless the intercept term in the regression equation is close to zero,

the percent of sales method and the regression technique will give slightly different estimates.


Steps

• Understand Past Performance• Drivers of Profitability & Growth• Forecast Sales

– Quantity – Value

• Forecast other income• Forecast Expenses

– Operating– Non-operating

• Forecast Assets, Liabilities & Shareholders’ Funds• Forecast Ratios/ Cash Flows


Data/ Info. required

• Income Statement• Balance sheet• Cash flow statement• Data of products segment: Product details• Raw material consumed• Forex Transaction• Capital expenditure projects• Management Discussion & Analysis (MDA) Report• Director’s report• Notes to accounts• Conference call transcripts• Key news articles (cover stories in Magazines/ newspaper/ websites)


Dealing with Past Data

• Try to get data for at least 3 years. 5 years is better• Make sure that they are consistent• Collect important historical data for company’s industry and its

major competitors• Create benchmarks to judge if co. is doing well or poorly and

where is the room for improvement• Get data on industry forecasts for mkt growth, pricing trends,

general economic forecasts: GDP, interest rate trends


Past performance measures

• Growth in sales & profits• Growth in assets• Ratios

– Profitability– Return ratios– Asset utilization– Liquidity– Leverage

• Common size


Case: SpeedAuto Ltd.


Past Performance: IS NumbersSpeedAuto ltd. Mar08 Mar09 Mar10 Mar11Growth in Total Income -3.66% 29.00% 47.95%Growth in Sales -2.17% 29.30% 39.31%Growth in Expenses -3.83% 20.51% 40.58%Growth in EBIDTA -15.71% 130.69% 75.81%Growth in PAT -13.40% 159.76% 96.44%EBIDTA Margin 12.84% 11.23% 20.09% 23.87%EBIDTA Margin (Adjusted) 15.22% 13.89% 22.51% 27.51%Net Profit Margin 7.41% 6.66% 13.41% 17.81%Net Profit Margin (Adjusted) 6.81% 6.49% 12.92% 13.77%

RM expenses, Compensation to employees, Indirect taxes, repair & maintenance,S,G&A as a % to Total Income have come down.

Total Income for 2011 had an effect of Rs. 887.8 Crores from P&E Income.


Income Statement (Common Size) Mar-08 Mar-09 Mar-10 Mar-11 AverageTotal income 104.04% 102.45% 102.22% 108.56% 104.32% Sales 100.00% 100.00% 100.00% 100.00% 100.00% Income from financial services 2.84% 1.56% 1.20% 2.99% 2.15% Other income 0.50% 0.62% 0.43% 0.42% 0.49% Prior period & extra-ordinary income 0.69% 0.27% 0.59% 5.14% 1.67%Change in stock 0.69% -0.26% 0.38% 0.48% 0.32%Total expenses 97.02% 95.37% 88.89% 89.70% 92.75% Raw materials, stores & spares 66.03% 63.90% 62.64% 65.98% 64.63% Purchase of finished goods 2.93% 3.90% 3.39% 3.29% 3.38% Power, fuel & water charges 0.71% 0.63% 0.57% 0.50% 0.60% Compensation to employees 4.61% 5.73% 4.80% 2.86% 4.50% Indirect taxes 10.89% 6.61% 5.06% 5.55% 7.03% Royalties, technical know-how fees, etc. 0.04% 0.06% 0.03% 0.01% 0.03% Rent & lease rent 0.06% 0.08% 0.08% 0.07% 0.07% Repairs & maintenance 0.74% 0.74% 0.61% 0.46% 0.64% Insurance premium 0.02% 0.01% 0.02% 0.01% 0.02% Outsourced professional jobs 0.01% 0.01% 0.01% 0.01% 0.01% Directors' fees 0.00% 0.01% 0.01% 0.01% 0.01% S, G & A 3.99% 4.22% 3.59% 2.71% 3.63% Miscellaneous expenses 2.13% 2.41% 2.01% 1.59% 2.04% Treasury operations expenses 0.02% 3.22% 0.00% 0.00% 0.81% Total provisions 0.01% 0.07% 0.01% 0.59% 0.17% Write-offs 0.09% 0.06% 0.17% 0.11% 0.11% Prior period & extra-ordinary expenses 0.07% 0.06% 0.06% 0.12% 0.08%PBDITA 13.36% 11.51% 20.54% 25.92% 17.83%Depreciation 1.70% 1.32% 1.07% 0.72% 1.20%Amortization 0.03% 0.00% 0.00% 0.00% 0.01%PBIT 11.63% 10.19% 19.46% 25.20% 16.62%Interest Paid 0.05% 0.22% 0.05% 0.01% 0.08%PBT 11.57% 9.97% 19.42% 25.19% 16.54%Provision for Tax 3.86% 3.14% 5.71% 5.85% 4.64%PAT 7.71% 6.82% 13.71% 19.33% 11.89%Adjusted PAT 7.09% 6.61% 13.18% 14.31% 10.30%


Past Performance: BS NumbersSpeedAuto Ltd. Mar08 Mar09 Mar10 Mar11Growth in Assets 22.28% 44.55% 34.94%Growth in NFA 18.92% -2.93% 1.98%Growth in Working Capital 46.23% 105.90% 26.72%Growth in Shareholders' Funds 17.77% 56.62% 67.68%Growth in Borrowings 18.24% -15.02% -75.67%NFAs as % of TAs 28.06% 27.29% 18.32% 13.85%CAs as % of TAs 30.41% 36.37% 51.80% 48.65%Investments as % of TAs 37.49% 29.45% 27.20% 35.84%Cash as a % of TAs 1.23% 2.75% 20.01% 9.57%D/E 0.84 0.84 0.46 0.07

Total assets have grown but the fixed assets have not.Investments have grown.What is the source of growth in CAs?Shareholders’ funds have a very good growthSpeedAuto’s dependence on Debt has reduced.


AssetsGross fixed assets 31.77% 36.07% 28.26% 20.53% 29.16% Land & building 5.69% 6.14% 4.83% 3.83% 5.12% Plant & machinery 23.45% 24.41% 19.11% 13.68% 20.16% Transport & comm. equipment/infrastructure 0.88% 3.73% 2.90% 1.81% 2.33% Furniture,amenities & other fixed assets 0.42% 0.49% 0.41% 0.31% 0.41% Capital work-in-progress 1.29% 1.27% 0.97% 0.86% 1.10% Less: Cumulative depreciation 17.63% 18.88% 15.35% 11.08% 15.74%Net fixed assets 14.14% 17.19% 12.91% 9.45% 13.42%Investments 18.89% 18.55% 19.16% 24.45% 20.26% Equity shares 6.39% 7.97% 6.83% 6.12% 6.83% Mutual funds 1.11% 3.54% 0.44% 0.17% 1.32% Debt instruments 12.29% 7.57% 12.18% 18.80% 12.71%Deferred tax assets 1.34% 1.67% 1.53% 0.97% 1.38%Current assets 18.14% 26.65% 38.42% 35.29% 29.62% Cash & bank balance 0.62% 1.73% 14.09% 6.53% 5.74% Inventories 3.57% 3.53% 3.60% 3.17% 3.47% Receivables 7.07% 10.14% 7.35% 9.61% 8.54% Sundry debtors 2.81% 3.74% 1.93% 2.10% 2.64% Expenses paid in advance 4.07% 7.51% 11.45% 13.88% 9.23%Loans & advances 0.70% 0.76% 0.35% 0.16% 0.49%Total assets 50.40% 63.00% 70.43% 68.23% 63.02%Net worth 16.19% 19.50% 23.62% 28.42% 21.93% Paid up equity capital (net of forfeited capital) 0.44% 1.51% 1.17% 1.68% 1.20% Reserves & surplus 14.72% 17.99% 22.45% 26.75% 20.48%Total borrowings 13.61% 16.45% 10.81% 1.89% 10.69% Bank borrowings 0.07% 0.08% 0.12% 0.14% 0.10% Foreign borrowings 0.00% 2.59% 0.00% 0.78% 0.84% Deferred credit 13.54% 13.78% 10.69% 0.97% 9.74%Current liabilities & provisions 19.15% 25.34% 34.46% 36.77% 28.93% Sundry creditors 8.96% 8.34% 12.67% 11.25% 10.31% Deposits & advances from customers & employees 1.01% 1.29% 1.64% 1.53% 1.37% Other current liabilities 0.67% 2.94% 2.01% 1.26% 1.72% Provisions 8.51% 12.76% 18.13% 22.73% 15.53%Deferred tax liability 1.45% 1.72% 1.55% 1.14% 1.46%Total liabilities 50.40% 63.00% 70.43% 68.23% 63.02%


Return Ratios

SpeedAuto Ltd. Mar08 Mar09 Mar10 Mar11

ROA 16.82% 31.40% 41.21%

ROCE 26.73% 55.67% 82.93%

ROE 37.86% 70.87% 85.21%

ROA (net of P&E income/exp) 16.47% 30.54% 33.00%

ROCE (net of P&E income/exp) 26.18% 54.14% 66.39%

ROE (net of P&E income/exp) 36.70% 68.10% 63.07%


Asset Utilization

Total Asset turnover 1.69 1.65 1.78

NFA Turnover 6.32 7.63 10.69

Inventory turnover 22.75 24.38 27.38

Debtors Turnover 30.25 41.46 57.37

Cash as % of Total Income 0.60% 1.69% 13.78% 6.01%


Cash FlowsSpeedAuto Ltd. Mar-09 Mar-10 Mar-11

Net cash flow from operating activities 360.3 2,703.90 1,898.90

Net profit before tax & extra-ordinary income 958.1 2,594.40 3,523.90

Add: Adjustments for non-cash and non-operating expenses 364.7 160.5 256.6

Less: Adjstments for non-cash and non-operating income 116.2 147.4 383.9

Operating cash flow before working capital changes 1,206.60 2,607.60 3,396.60

Add:Cash inflow due to 10.8 976.7 456.1

Less: Cash outflow due to 275.2 107.4 861.8

Net cash inflow from investing activities -205.7 -2,184.50 -678

Less: Cash outflow due to investing activities 544 2,311.00 1,098.90

Add: Cash inflow due to investing activities 338.3 126.5 420.9

Net cash inflow or (outflow) from financing activities -73.8 -554.8 -765.9

Less: Cash outflow due to financing activities 322.3 571.9 947.4

Add: Cash inflow from financing activities 248.5 17.1 181.5

Net increase or (decrease) in cash & cash equivalents 80.8 -35.5 455.1


Valuation Measures

SpeedAuto Ltd. Mar-08 Mar-09 Mar-10 Mar-11 12-Oct-11

Book value per share (Rs.) 129.23 202.4 169.69 194.26Price / book value (PB)(times) 4.79 9.95 8.62 8.17Earnings per share (EPS)(Rs.) 45.37 117.57 90.38 94.55

Cash Flow per share 24.90 186.89 65.62 65.62

Adjusted market price 309.23 1,007.40 1,463.25 1,586.85

PE (times) 13.63 17.14 16.19 16.78

Market capitalisation 8,947.95 29,150.83 42,341.63 45,918.21

Borrowings 1,334.29 1,577.67 1,340.65 326.22 326.22

Enterprise value 9,294.34 27,203.32 38,262.51 41,839.09


Forecasting Sales & Total Income

• The first step is to forecast SALES– Rule of thumb estimates– Professional economic

estimates, market research & analysis of competitive situation

• Practical consideration– Production capacity

(additions if any)– Sales Quantity & Value– Study industry / firm

specific forecast reports– Make assumptions – Forecast sales Quantity &

Value– Forecast income from

other sources– Forecast total income


Analysis production capacity: SpeedAuto

Measure Mar-07 Mar-08 Mar-09 Mar-10 Mar-11

Product 1 Capacity 3,400.00 3,960.00 3,900.00 4,500.00

Production 2,161.03 1,888.89 2,513.90 3,404.04

Capacity utilisation (%) 63.55 47.69 64.45 75.64

Opening stock 36.66 62.4 43.33 53.92

Opening stock value 112.32 169.48 128.61 159.65

Closing stock 62.4 43.33 53.92 74.39

Closing stock value 169.48 128.61 159.65 230.27

Sales quantity 2,139.03 1,907.81 2,506.85 3,387.04

Growth in sales quantity -10.81% 31.40% 35.11%

Sales value 7,044.00 6,353.01 8,849.85 12,565.91

Value/ Unit 3.29 3.33 3.53 3.71

Growth in Sales value/

Unit 1.12% 6.01% 5.09%


Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Product 2 Capacity 60 Capacity 500 360 540 Production 285.85 274.71 346.21 440.4

Capacity utilisation (%) 57.17 96.16 81.55

Sales quantity 290.31 274.53 340.94 436.88 -5.44% 24.19% 28.14% Sales value 2,011.00 1,933.02 2,417.24 3,218.63 Value/ Unit 6.93 7.04 7.09 7.37

Growth in Sales

value/ Unit 1.65% 0.69% 3.91% Royalty Sales value 1.37 1.09 0.74 11.45Services >> Trade & Commissioning Agents' services

Items related toProduct 1&2

Opening stock value 38.14 50.47 72.76 70.32

Closing stock value 50.47 72.76 70.32 87.32

Purchase value 419.76 568.41 Sales value 577.63 732.1 837.84 1,146.91

Growth 26.74% 14.44% 36.89%Services >> Financial services including leasing Interest Sales value 126.17 104.31 81.46 349.84


Additional Information: Sales

• SpeedAuto to Increase Capacity of Product 1 by 300,000 Units by FY 2012 and will increase its overall production capacity to 50 lakh units a year by next year

• Managing Director: “We said we were looking at 20% growth over last year, that means we should be in the region of 4.5 million in total volume”.

• Actual growth for April-Sep FY12– Product 1: 17.42%– Product 2: -0.04%


Assumptions!

• This is a key step but most tend to skip it• Understand the company’s business model, its future

plans and develop a set of comprehensive assumptions

• Just some assumptions will not do • Forecasting line items

– Regression does not work well – Most models are Sales-driven forecasting

• “A Model is only as good as the assumptions built into it”.


Information Sources

• Historical relationships– Should be reasonable to be extended into future period

(remain same as past!)

• Management forecasts– Could be biased

• Industry data– Wide range of firms within an industry

• Good judgement– Inexperience/ poor knowledge


Addressing Uncertainties

• Range of expected performance– Best/ worst possible outcomes

• Re-work forecasts with new information/ knowledge

• Consistency in business economics• Accuracy improves with skills


SpeedAuto Ltd: Assumptions for Sales

• Product1: – Sales quantity will grow by 18%– Unit price will grow by 5% considering inflation

• Product2:– Sales quantity will grow by 10% (first quarter was flat,

meet management’s expectation)– Price of will grow by 5%

• Sale of other (trading income) will grow by 20% mainly spares


Forecasted Sales FY12(E)Segments Measure Mar-10 Mar-11Mar2012(E )

Product 1

Capacity 3,900.00 4,500.00 4,800.00

Sales quantity 2,506.85 3,387.04 3996.71Will grow by 18% YoY

Growth in sales quantity 31.40% 35.11% 18.00%

Sales value 8,849.85 12,565.91 15569.16

Value/ Unit 3.53 3.71 3.90

Growth in Sales value/ Unit 6.01% 5.09% 5.00%Will grow by 5%YoY

Product 2

Capacity 360 540 540

Production 346.21 440.4

Capacity utilisation (%) 96.16 81.55

Sales quantity 340.94 436.88 480.57Will grow by 10% YoY

24.19% 28.14% 10.00%

Sales value 2,417.24 3,218.63 3717.52

Value/ Unit 7.09 7.37 7.74

Growth in Sales value/ Unit 0.69% 3.91% 5.00%Will grow by 5%YoY

Royalty Sales value 0.74 11.45

(trading income) Sales value 837.84 1,146.91 1376.29

Growth 14.44% 36.89% 20.00%Will grow by 20%

Total of Sales 20662.97


Income from other sources

• Estimated from the expected size of investments or obligations


Income from other Sources: Speed Auto Ltd.

Mar 2008 Mar 2009 Mar 2010 Mar 2011

Total income 10199.22 9825.68 12675.04 18752.59

Sales 9803.39 9590.25 12399.92 17274.35

Income from financial services 278.88 150.01 148.76 517.26

Fund based financial services income 127.81 104.59 81.71 350.31

Interest income 127.81 104.59 81.46 349.84

Income from treasury operations 151.07 45.42 67.05 166.95

Profit on sale of investments 20.85 45.42 43.35 54.21

Gain relating to forex transactions 130.22 0 21.2 112.74

Other income 49.34 59.35 53.1 73.18

Prior period & extra-ordinary income 67.61 26.07 73.26 887.8

Change in stock 67.85 -24.49 47.6 82.79

Income from fin. Serv as % of total 2.73% 1.53% 1.17% 2.76%

Other income as % of total 0.48% 0.60% 0.42% 0.39%

change in stock as % of total 0.67% -0.25% 0.38% 0.44%


Assumptions Income from Other sources (SpeedAuto)

• Income from Interest, dividends, treasury operations and other income will be as per the past trend


Total Income FY12(E)

Income Statement Mar-11Forecasting Factor Mar-12 (E)Total income 18752.59 21696.12

Sales 17274.35Computed with inputs from company sources and mkt trends & projections 20662.97

Fiscal Benefits 443.53will be 2.50% of Sales 516.57 Income from financial services 517.26will be 2% of Sales 413.26 Other income 73.18will be 0.50% of sales 103.31 Prior period & extra-ordinary income 887.8

0.00

Change in stock 82.79assumed that production = sales 0.00

Operating Costs

• Use a simple analysis of past operating data as % of sales

• Detailed approach– Consider each component independently– Price changes in input costs– Existing FG inventory build-up and expected slowdown in

sales would mean COGS will be down– Budget the depreciation (capacity addition)– Changes in excise duty policy/ tax holidays



Other expenses

• Interest expenses based on loan outstanding• Provisions for income tax based on tax

regulations– Marginal tax rate

• Dividend payments– Dividend policy: high/ low


Assumptions: Expense ItemsExpense Items Assumptions Raw materials, stores & spares will remain at the level of 2011 as a % of Sales Purchase of finished goods 3.3% of sales Power, fuel & water charges 0.55% of sales Compensation to employees will increase to 3% of Sales

Indirect taxes will reduce to about 5% of Sales (excise exemption in Pantnagar plant)

Royalties, technical know-how fees, etc. will be about Rs. 3 crores Rent & lease rent 0.07% of Sales Repairs & maintenance 0.50% of Sales Insurance premium will be about Rs. 2.50 crores Outsourced professional jobs will be about Rs. 1.00 crores Directors' fees will be about Rs. 1.00 crores

S, G & A will be 3% of Sales considering increasing effotrs to achieve sales target

Miscellaneous expenses 2% of Sales Total provisions 0.2% of sales Write-offs 0.10% of Sales

Prior period & extra-ordinary expenses not forecasetedDepreciation BudgetedInterest Paid budgetedProvision for Tax 33% of PBT


Balance Sheet Items

• Fixed assets and changes can be determined easily as they are announced in advance

• Depreciation trends can be observed• Trends in Investments • Inventories, receivables & cash

– can be estimated as a % of sales and using turnover ratios• Equity

– Addition of retained earnings• Debt: raising of LT debt is usually announced• Current liabilities: % of Sales & use creditors days

Assumptions for BS (Assets)

Assets Items Assumptions

Gross fixed assetsWill grow at 11% per year, based on inputs from

management/ news reports

Accumulated Depreciation Budget on historical trends

Net fixed assets Calculated from other items

Inventories 8.8% of sales, based on historical average

Accounts Receivable 8.4% of sales, based on historical average

Other Non-Current Assets Will grow at 10% per year, based on inputs from

management

Cash and Marketable Securities 2.1%, of sales based on historical average

Other Current Assets 7.6% of sales, based on historical average

Assumptions BS (Liabilities & Equity)

Equity & Liability Items Assumptions

Paid-In Capital Will remain unchanged at 2011 level

Retained Earnings Calculated from other items

Long-Term Debt Will remain unchanged at 2011 level

Deferred Income Taxes 1.4% of sales, based on historical average

Other Non-Current Liabilities 7.6% of sales, based on historical average

Accounts Payable 6.1% of sales, same as historical average

Short-Term Debt Hold level constant at year-end 2011 level

Other Current Liabilities 8.3% of sales, same as 2011

Other Assumptions

Dividend payout ratio 40%, based on discussion with management

Interest on short-term debt 9%, based on economic forecast

Interest on long-term debtRates embedded in existing debt, annual

expense Rs. 13.5 million

Interest on cash & marketable securities 6%, based on economic forecast

Number of shares outstanding Will remain unchanged

P/E ratioWill decline to 16 in 2012Follow trend with market index/ Industry peers

Balancing the BS: use ‘Plug’

• The amount by which a forecasted B/S does not balance is called the “plug” amount

• It is the amount you have to plug into the balance sheet to balance it

• Plug amount is called DNF – discretionary funding needed

• Usually following items are used as plug:– Assets: Cash, Marketable securities– Eq& Liabilities: ST debt, LT Debt, Equity


Income Statement Mar-10 Mar-11 Forecasting Factor Mar-12Total income 12675.04 18752.59 21696.12

Sales 12399.92 17274.35Computed with inputs from company sources; and mkt trends & projections 20662.97

Fiscal Benefits 302.13 443.53 will be 2.50% of Sales 516.57 Income from financial services 148.76 517.26 will be 2% of Sales 413.26 Other income 53.1 73.18 will be 0.50% of sales 103.31 Prior period & extra-ordinary income 73.26 887.8 0.00Change in stock 47.6 82.79 assumed that production = sales 0.00 Total expenses 11022.53 15495.65 18776.73 Raw materials, stores & spares 7767.3 11396.89 will remain at the leve of 2011 13632.56 Purchase of finished goods 419.81 568.41 3.3% of sales 681.88 Power, fuel & water charges 70.35 86.61 0.55% of sales 113.65 Compensation to employees 594.64 493.58 will increase to 3% of Sales 619.89 Indirect taxes 626.93 959.52will reduce to about 5% of Sales (exemption in Pantnagar plant) 1033.15 Royalties, technical know-how fees, 3.75 2.36 will be about Rs. 3 crores 3.00 Rent & lease rent 9.52 11.35 0.07% of Sales 14.46 Repairs & maintenance 76.2 79.67 0.50% of Sales 103.31 Insurance premium 2.43 2.44 will be about Rs. 2.50 crores 2.50 Outsourced professional jobs 0.86 0.91 will be about Rs. 1.00 crores 1.00 Directors' fees 0.64 0.98 will be about Rs. 1.00 crores 1.00

S, G & A 445.17 468.58 will be 3% of Sales considering increasing efforts on sales target 619.89

Miscellaneous expenses 248.85 275.24 2% of Sales 413.26 Total provisions 1.19 102.61 0.2% of sales 4.13 Depreciation 132.77 124.42 Budgeted 90.54 Amortisation 0 0 Write-offs 20.87 18.86 0.10% of Sales 20.66 P&E expenses 6.97 20.12 not forecasted 0.00PBDITA 2546.36 4476.86 4431.77Depreciation 132.77 124.42 Budgeted 90.54PBIT 2413.59 4352.44 4341.23Interest Paid 5.98 1.69 budgeted 32.62PBT 2407.61 4350.75 4308.61Provision for Tax 707.5 1011.02 33% of PBT 1421.84PAT 1700.11 3339.73 2919.39Adjusted PAT 1633.82 2472.05 2919.39


Assets Mar-10 Mar-11 Mar - 12 (E )Gross fixed assets 3503.82 3546.64 will add capacity. Will cost Rs. 150 crore 3696.64 Less: Cumulative depreciation 1903.39 1914.59 2.5% of GFA 2005.131Net fixed assets 1600.43 1632.05 1691.509Investments 2375.7 4223.82 24% of Sales 4959.11331Deferred tax assets 190.12 167.99 1.4% of Sales 289.28Current assets 4763.8 6095.87 7796.78412 Cash & bank balance 1747.22 1127.87 PLUG 2693.03 Inventories 446.21 547.28 3.2% of Sales 661.22 Receivables 911.08 1660.87 9% of Sales 1859.67 Sundry debtors 239.45 362.76 2.5% OF Sales 516.57 Expenses paid in advance 1419.84 2397.09 10% of Sales 2066.30Loans & advances 43.1 28.47 0.5% of Sales 103.314861Total assets 8733.7 11785.44 14323.43

Equity & Liabilities Net worth 2928.34 4910.22 6661.85522 Paid up equity capital (net of forfeited capital) 144.68 289.37 No change 289.37 Reserves & surplus 2783.66 4620.85 Add RE 6372.48522Total borrowings 1340.65 326.22 Will maintain current borrowing 326.22Current liabilities & provisions 4272.9 6351.3 7025.41 Sundry creditors 1571.2 1943.08 11% of Sales 2272.93 Deposits & advances from customers & employees 203.27 264.91 1.5% of Sales 309.94 Other current liabilities 249.71 217.59 1.5% of Sales 309.94 Provisions 2248.72 3925.72 20% of Sales 4132.59Deferred tax liability 191.81 197.7 1.5% of Sales 309.94Total liabilities 8733.7 11785.44 14323.43


Ratios & Performance Indicators Mar-10 Mar-11 Mar-12 (E )EBIDTA Margin 20.09% 23.87% 20.43%Net Profit Margin 13.41% 17.81% 13.46%Net Profit Margin (Adjusted) 12.92% 13.77% 13.78%

Growth in Assets 44.55% 34.94% 21.53%Growth in NFA -2.93% 1.98% 3.64%Growth in Working Capital 86.38% 27.96% 27.90%Growth in Shareholders' Funds 56.62% 67.68% 35.67%NFAs as % of TAs 18.32% 13.85% 11.81%CAs as % of TAs 54.55% 51.72% 54.43%Investments as % of TAs 27.20% 35.84% 34.62%Cash as a % of TAs 20.01% 9.57% 18.80%D/E 0.46 0.07 0.05

ROA (net of P&E income/exp) 31.77% 33.97% 33.25%ROCE (net of P&E income/exp) 58.15% 70.44% 68.19%ROE (net of P&E income/exp) 68.10% 63.07% 50.46%Total Asset turnover 1.72 1.83 1.51NFA Turnover 7.63 10.69 12.22Inventory turnover 24.38 27.38 24.51Receivable Turnover 41.46 57.37 47.00Cash as % of Total Income 13.78% 6.01% 12.41%

Current ratio 1.11 0.96 1.11Quick Ratio 1.01 0.87 1.02

EPS 112.93 85.43 100.89

Documents

Forecasting Financial Statements