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Financial Statement Analysis

Report of Bharat Petroleum


Corporation Ltd. for Financial Year
2013-14 and 2014-15

Submitted by

Anurag Chaki 2015134


Harshika Kanwar 2015144
Laya Singh 2015154
Prachi Sharan 2015164
Rotkar Abhishek 2015174
Soham Bhattacharya 2015184
Pradeep Murugesan -2014198

Towards fulfilment of FAM Course Group Assignment

Submitted to: - Prof. Anil Kshatriya at IMT,


Nagpur

BALANCE SHEET AS AT 31ST MARCH, 2015


BALANCE SHEET AS AT 31

ST

MARCH 2015

I. EQUITY AND LIABILITIES


(1) Shareholders'
Funds
(a)
Share and surplus
(b) Reserves
(2) Non-current liabilities
(a) Long-term borrowings
(b) Deferred tax liabilities (Net)
(c) Other long-term liabilities
(d) Long-term provisions
(3) Current liabilities
(a) Shor t-term borrowings
(b) Trade payables
(c) Other current liabilities
(d) Shor t-term provisions
TOTAL
II. ASSETS
(1)
Non-current
assets
(a) (i) Tangible
Fixed
assets
(ii) Intangible assets
(iii) Capital work-in-progress
(iv)
Intangible
assets
(b) development
Non-current investments
(c) Long-term loans and advances
(d) Other non-current assets
(a)
(b)
(c)
(d)
(e)
(f)

Current investments
Inventories
Trade receivables
Cash and bank balances
Short-term loans and advances
Other current assets

TOTAL

under

As
at
31/03/2
015
723.
21,74
08
4.40
22,467
.48
11,737
1,708
.26
70.
03
14,623
.90
40.
12,216
27
.41
16,805
.21
32,63
7.50
69,72
8.88

in
As
at
31/03/20
14
723.0
18,735.
8
6819,458.
76
11,808.
1,360.9
0 60.7
4
14,387.
31
8,183.7
12,038.
0
74
14,878.
84
38,281.
2272,127.
29

20,226
.0689.
00
7,640
.61
25.
07
7,302
.05
4,077
.17
39,443
.42
5,089
14,457
.09
.85
2,607
.67
1,360
.20
748.
39
30,28
5.46
69,72
8.88

18,968.
83 70.6
8
3,040.0
3 25.0
7
7,238.1
0
3,266.6
6
32,775.
51
4,608.7
19,071.
9
13
4,080.1
6 203.7
6
641.2
3
10,746.
71 39,351.
7872,127.
29

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH
2015
` in Crores
I)

Revenue from operations

II) Other income


III) Total revenue (I + II)

2014-15

2013-14

2,38,086.90

2,60,074.99

2,199.96

1,454.20

2,40,286.86

2,61,529.19

94,424.39

1,09,197.43

1,17,051.71

1,30,897.87

IV) Expenses
1)

Cost of raw materials consumed

2)

Purchases of stock-in-trade

3)

Changes in inventories of finished goods,


work-in-progress and stock-in-trade

4,513.32

(2,030.30)

4)

Employee benefits expense

2,085.60

2,896.35

5)

Finance costs

583.10

1,359.08

6)

Depreciation and amor tization expense

2,516.02

2,246.82

7)

Other expenses

11,697.21

11,012.96

2,32,871.35

2,55,580.21

7,415.51

5,948.98

2,010.00

2,275.00

2) Deferred tax

347.36

(294.82)

3) Short / (Excess) provision of earlier years

(26.36)

(92.08)

2,331.00

1,888.10

5,084.51

4,060.88

70.32

56.16

Total expenses
V) Profit / (Loss) before tax (III - IV)

VI) Tax expense


1) Current tax

Total tax expense


VII Profit / (Loss) after tax for the year (V - VI)
)
VIII Basic and Diluted Earnings per share (Face value ` 10)
)

TURNOVER RATIOS
Turnover ratios indicate efficiency in asset use.
Ratio
Asset Turnover
Ratio
(Sales/Total
Assets)

2013-14

2014-15

7.93

6.03

Chang
e
-1.9

%
Change
-23.95%

Working

Analysis

2013-14

ATR has declined


which implies a
decline in the sales
generating capacity
of the company.

238086.90/39,443.4
2
=7.93
2014-15
260074.99/32775.51
=6.03

Inventories
Turnover Ratio
(Sales/Avg.
Inventories)

27.27

32.9

5.63

20.64%

Avg. Inventories =(op.


inv. + Cl. Inv)/ 2
2013-14

ITR has increased,


which shows a fast
movement of
inventories.

260074.99/9535.56
=27.27
2014-15

Debtors Turnover
Ratio
(Credit Sales/ Avg.
Receivables)

64.17

71.20

7.03

10.95%

238086.90/7228.92
=32.9
Avg. Receivables =
(op. debtors+ Cl.
Debtors)/2
2013-14
260074.99/4052.645
=64.17

The DTR has


increased, it
indicates that the
companys
extension of credit
and collection of
accounts receivable
is efficient.

2014-15
238086.90/3343.915
=71.20

Creditors Turnover
Ratio
(Credit

12.57

9.65

-2.92

-23.22%

Avg. Creditors= (op.+


cl. Creditors)/2

The CTR has


decreased. This is a
sign that the

2013-14
130897.87/10411.82
=12.57

Purchases/Avg.
Payable)

2014-15
117051.71/12127.58
=9.65

company is taking
longer to pay off to
its suppliers as
compared to the
previous year.

LIQUIDITY RATIOS
Liquidity Ratios are the ones which show the ability of the entity to pay its liabilities
in the short run. This is also called as short - term solvency.
Ratio
Current
Ratio
(C.A.
/C.L.)

201314
1.02

201415
0.92

Change
-0.1

%Chang
e
9.80%

Working

Analysis

2013-14

Current
ratio
measures a
firms
ability
to
meet
its
short term
financial
obligations.
Here, there
has been a
small
decrease in
the firms
current
ratio,
which
implies
that
the
firm loses
its
credibility
by a small
percentage
.
Quick ratio
measures a
firms
ability to
deal with
short term

39351.78/3828
1.22
=1.02
2014-15
30285.46/3263
7.50
=0.92

Quick
Ratio
[(C.A.Stock)/C.
L.]

0.53

0.48

-0.05

9.4%

2013-14
(39351.7819071.13)/3828
1.22
=0.53

2014-15
(30285.4614457.85)/3263
7.50
=0.48

obligations,
but is not
inclusive of
stock as it
is relatively
less liquid.
It also has
shown a
decline
implying
that firms
credibility
to service
its debts is
slightly
shaken.

PROFITABILITY RATIOS
Profitability Ratios implies ability to generate earnings particularly with
respect to turnover.
Ratio
Net Profit
Ratio
[(PAT/Sales)
*100]

2013-14
1.56

2014-15
2.13

Change
0.57

% Change
36.5

Working
2013-14
4060.88/260074.99
*100
=1.56%
2014-15
5084.51/238086.90
*100
=2.13%

Analysis
The NPR has
increased,
which implies
that there will
be higher
returns to the
shareholders
of BPCL.

Earnings Per
Share
(PAT/No. of
Equity
Shares)

1.62

2.03

0.40

24.69

2013-14
4060.88/2500
=1.62
2014-15

Operating
Profit Ratio
[(operating
profit/sales)
*100]

3.67

4.41

0.74

20.16

5084.51/2500
=2.03
2013-2014
9554.88/260074.99
*100
=3.67%
2014-15
10514.63/238086.9
0*100
=4.41%

The EPS has


increased
which shows a
higher profit
to the
shareholders
of BPCL.

The Operating
Profit of the
company has
increased
substantially,
which
indicates a
strengthening
profitability
position of
BPCL.

COVERAGE RATIOS
A measure of a company's ability to meet its financial obligations. In broad terms,
the higher the coverage ratio, the better the ability of the enterprise to fulfill its
obligations to its lenders.
Ratio
2013-14
2014Change
%
Working
Analysis
15
Change
Interest
3.12
10.1
6.98
223.7
2013-14
The company
Coverage
covers 3.12
(EBIT/Interest
(5948.98times of interest
on Debt)
13598.08)/1472.33
on debt for
=3.12
EBIT for 201314
2014-15
The company
(7415.51covers 10.1
583.1)/676.81
times of interest
=10.1
on debt for
EBIT for 201314

Dividend
Coverage
(PAT/Dividend)

5.11

4.14

-0.97

-19

2013-14
4060.88/795.39
=5.11
2014-15
5084.51/1229.24
=4.14

The company
covers 5.11
times of
dividend for
PAT for 201314
The company
covers 5.11
times of
dividend for
PAT for 201314

Capital Structure Ratio


It indicates long term solvency of a firm.
Ratio
Leverage
Ratio
(Debt/Equity)

201314
0.61

201415
0.53

Chang
e
-0.08

%Chang
e
-13.11%

Working
2013-14
11869.1/19,458.76
=0.61
2014-15
11807.04/22467.48
=0.53

Analysis
The leverage
ratio indicates
a companys
reliance
on
borrowed
funds
to
finance
its
operations.
The lower the
ratio,
the
chances
of
default
are

relatively less.
Thus,
a
decrease
of
13.11%,
reduces
its
chances
of
default by the
same
percentage.

EPS
(PAT/Total
No. of shares)

56.16

70.31

14.15

25.%

2013-14
40608800000/72,30,84,248
=56.16
2014-15
50845100000/72,30,84,24
8=70.31

Return
on
Equity
(PAT/Equity
shareholders
funds)

20.8
%

22.6
%

1.8

8.65%

2013-14
40608800000/194587600000
=0.208
2014-15
50845100000/2246748000
00
=0.226

Earnings per
share is the
amount
of
profit which
is available to
the
shareholder
per share. The
higher it is,
the
better
amount
of
satisfaction
prevails
among
the
shareholders.
Return
on
equity
measures
a
corporations
profitability
by revealing
how
much
profit
a
company
generates
with
the
money
shareholders
have invested.
Higher
returns imply
effective and
efficient
utilization of
shareholders
funds.

Return
on
Capital
Employed
(EBIT/Capita
l Employed)

18.9
%

21.6
%

2.7

14.28%

2013-14
5948.98/31327.86
= 18.9%
2014-15
8415.51/34274.52
= 21.6%

Return
on
capital
employed
shows
how
well
a
company is
using both its
debt
and
equity
to
generate
a
return.
A
14.28%
increase
shows
increase
in
efficiency of a
companys
funds
channelizatio
n and use for
its operations.