INSTITUTIONAL PROJECT REPORT

SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE DEGREE OF MASTER OF
BUSINESS ADMINISTRATION (MBA)

SUBMITTED BY

Muthusubbu.S - 16MBA0003
Yeshwanth kumar.P - 16MBA0006
Akash Jain - 16MBA0024
Akash Das Gupta - 16MBA0033
Aravind MJ - 16MBA0040
Sayandeep Kundu - 16MBA0046
Ganesh Krishna.L - 16MBA0098
IN
FINANCIAL ANALYSIS OF BAJAJ ELECTRICALS LIMITED

UNDER THE GUIDANCE OF

RAJESH M
ASSISTANT PROFESSOR

SEPTEMBER 2016

1|Page
 Table of Contents

Chapter 1- Introduction and Design of the Study

1.1 Importance of the study----------------------------------------------------------------------------4
1.2 Statement of the problem--------------------------------------------------------------------------5
1.3 Objectives--------------------------------------------------------------------------------------------5
1.4 Scope of the study-----------------------------------------------------------------------------------5
1.5 Period of the study----------------------------------------------------------------------------------5
1.6 Collection of data (Primary & secondary) ------------------------------------------------------5

Chapter 2 Company Profile

2.1 Brief History---------------------------------------------------------------------------------------7-8

2.2 Organisation structure------------------------------------------------------------------------------8

2.3 Functions, Products & services--------------------------------------------------------------------9

2.4 Financial data-------------------------------------------------------------------------------------9-12

Chapter 3 Analysis and Interpretation

3.1 Data Collection----------------------------------------------------------------------------------14-16

3.2 Tabulation----------------------------------------------------------------------------------------17-22

3.3 Analysis and interpretation--------------------------------------------------------------------22-25

Chapter 4 Findings, Suggestions and Conclusion

4.1 Findings---------------------------------------------------------------------------------------------27

4.2 Suggestions-----------------------------------------------------------------------------------------28

4.3 Conclusion------------------------------------------------------------------------------------------28

Appendix

Bibliography---------------------------------------------------------------------------------------------29

2|Page
 Chapter 1
Introduction and design of the
study

3|Page
1.1 Importance of the study

Helps in evaluating the performance of business

The accounting records reflects the results of operations as well as
statement of financial position of the company. Various balance sheet
and profit & loss accounts ratios are calculated which help user of
financial statements to analyse the performance of an entity in the
current year and also with previous year.

Helps to manage and monitor cash flow

The working capital and cash requirement of an enterprise can be duly
taken care by proper accounting system.

Helps the business to be statutory compliant

Proper business accounting ensures timely recording of liabilities which
needs to be paid within the prescribed time line. This includes provident
fund, pension fund, VAT, sales tax, Income tax. Timely payment of
liabilities helps enterprises to be statutory compliant.

Helps to create budget and future projections -

Accounting data helps an enterprise to prepare budget and forecast for
future period. Business trends are projected based on past data
produced by accounting system.

Helps in filing financial statements with regulators, stock

exchanges and filing of tax returns
Enterprises are required to file the financial statements. In case of listed
entities the same is required to be filed with stock exchanges as well.
For both indirect and direct tax filing purposes, financial statements and
other financial information are required.

Other information
The accounting system provides a number of qualitative and quantitative
customized reports which are required in day to day business activities.

4|Page
1.2 Statement of the problem

To analyse the financial condition of BAJAJ ELECTRICALS LTD and

comparison of the company with electrical industrial ratios.

1.3 Objectives

To find the ratio analysis, trend analysis, Comparative analysis,

Common size analysis.

1.4 Scope of the study

To achieve the final financial condition of BAJAJ ELECTRICALS LTD

and compare it with industrial standards to find where they are standing
in their sector and how much they have to improve.

1.5 Period of study

Balance sheet taken for March 2014 March 2016.

1.6 Collection of data

Secondary data

5|Page
 Chapter 2
Company profile

6|Page
2.1 Brief History
Company was incorporated as Radio Lamp Works Limited under the
Indian Companies Act, 1913 as a public company limited by shares,
pursuant to a certificate of incorporation dated July 14, 1938.
Subsequently the name of Company was changed to Bajaj Electricals
Limited, pursuant to a fresh certificate of incorporation dated October 1,
1960.

In 1964, Matchwell Electricals (India) Limited, ("Matchwell"), a

manufacturer of electric fans became a subsidiary of Company and
subsequently, with effect from July 1, 1984, the business and undertaking
of Matchwell was amalgamated with our Company.

In the financial year 1993-1994, Company entered into a joint venture with
Black & Decker Corporation, United States, for the manufacture and
marketing of power tools & Decker Bajaj Private Limited, ("Black & Decker
Bajaj"). During the financial year 1999-2000 Black & Decker Bajaj became
a 100% subsidiary of our Company upon our Company acquiring a further
50% of the shareholding thereof from Black & Decker Corporation,
pursuant to which Black & Decker Bajaj was renamed as Bajaj Ventures
Limited. However, in the financial year 2002-2003, our Company divested
50% of its shareholding in Bajaj Ventures Limited and Bajaj Ventures
Limited ceased to be a subsidiary of our Company.
In January 1998, our Company established a new manufacturing unit at
Chakan near Pune and commenced operations of manufacturing of fans
and die-cast components. The production of fans at our manufacturing
activities of the Matchwell unit also was gradually shifted to our Chakan
unit.

In September 1999, our Company established and commissioned a

wind energy generation unit with an installed capacity of 2.8 mega watts
at Village Vankusawade, Tal. Patan, District Satara, Maharashtra. The
facility continues to run profitably till date.

In the year 2000-2001 our Company set-up our manufacturing facilities

including a fabrication unit and a galvanizing plant at Ranjangaon, near
Pune for the manufacture of high masts, lattice towers, and related
products, and the said manufacturing facilities commenced commercial
production with effect from April 1, 2001.

7|Page
In November 2002, our Company entered into a technical collaboration
and brand licensing agreement with Morphy Richards, United Kingdom,
for the sales and marketing of electrical appliances under the brand
name of "Morphy Richards" in India.

In the financial year 2002-2003 our Company discontinued

manufacturing die-cast components.

In the year 2005 our company entered into a Distribution agreement with
Trilux Lenze of Germany for high end technical lighting.

In the year 2007, we acquired 32% of the share capital of Starlite

Lighting Limited, a company engaged in the manufacture of Compact
Fluorescent Lamps ("CFLs").

In 2012-2013, we have completely divested our stake and association

with Black & Decker Corporation, USA.
2.2 Organisational structure

8|Page
2.3 Products and services

Juicer
Mixer
Food processor
Juicer mixer grinder
Hand blender
Vegetable chopper
Cooking Appliances
Microwave oven
Oven toaster griller
Cook tops
Hobs and chimneys
Induction cooker
Pressure cooker
Cookware
Electric rice cooker
Air fryer
Pop up toaster
Sandwich toaster
Room heaters and room coolers
Water heaters and water purifiers
Steam iron and dry iron
Fans
Refrigerators
Washing machine
Lights and LEDs
T.V.

2.4 Financial Data

Trading Account And P&L Account
Bajaj Electricals Ltd.
Mar-14 Mar-15 Mar-16
12 mths 12 mths 12 mths
-
Total income 40,799.80 43,138.30 46,711.90
Sales 40,649.00 42,895.30 46,483.50

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 Industrial sales 11,543.80 13,963.20 15,869.30
Income from non-financial services 29,105.20 28,932.10 30,614.20
Income from financial services 140.1 192 187.1
Interest income 122.5 167.1 162
Dividends 0
Income from treasury operations 1.8
Other income 4.1 9.1 5.8
Prior period and extraordinary income 6.6 41.9 35.5

Change in stock( opening) 538.7 317.3 318.1

Total expenses 41,391.60 43,595.10 46,074.00

Operating expenses 39,807.70 41,846.80 43,930.60
Raw materials, stores & spares 2,421.70 2,327.90 1,869.40
Purchase of finished goods 27,782.70 28,660.30 29,349.50
Packaging and packing expenses 38.2 53.2 75.5
Power, fuel & water charges 142.8 153.7 158.2
Compensation to employees 1,860.20 2,262.80 2,836.90
Indirect taxes 372.6 290.7 399.8
Royalties, technical know-how fees, etc
Rent & lease rent 333.3 381.9 407.9
Repairs & maintenance 67.3 80.3 82.3
Insurance premium paid 55.8 68.1 69.3
Outsourced manufacturing jobs 2,414.20 2,224.90 2,945.70
Outsourced professional jobs 9.2 10.8 14.2
Non-executive directors' fees 4.6 6.8 6.8
Selling & distribution expenses 2,752.00 3,537.90 3,685.00
Travel expenses 497.7 561.8 629.3
Communications expenses 73.1 79.7 102.9
Printing & stationery expenses 23.2 26.3 30
Miscellaneous expenditure 1,069.40 1,288.00 1,393.30
Other operational exp of industrial ent
Other operational exp of non-fin services ent
Share of loss in other enterprises
Financial services expenses 783 1,044.30 1,014.10
Fee based financial services expenses
Fund based financial services expenses 783 1,044.30 1,014.10
Non-cash charges 806.1 772.7 549.5
Depreciation 247.5 290.3 272.4
Amortisation
Write-offs 70.6 27.1 193.9
Provisions 488 455.3 83.2

Prior period and extraordinary expenses 1.3 6.8 1.2

Provision for direct tax -6.5 -75.5 578.6

Profit after tax -53.1 -139.5 956

Addendum Information
Total income net of P&E 40,793.20 43,096.40 46,676.40
Net sales 40,276.40 42,604.60 46,083.70
Cost of goods sold 34,066.20 35,317.10 36,650.10
Cost of sales 39,622.20 41,978.90 43,989.90
Cost of sales per day 108.6 115 120.5

10 | P a g e
Balance sheet
Bajaj Electricals Ltd.

Mar-14 Mar-15 Mar-16

12 mths 12 mths 12 mths
-
Total liabilities 32,095.00 33,941.30 34,986.60

Total Capital 199.9 201.5 201.9

Paid up equity capital 199.9 201.5 201.9
Paid up preference capital

Share appln money & suspense account 5

Reserves and funds 6,891.00 6,668.40 7,313.10

Free reserves 4,573.80 4,222.70 4,838.40
General reserves 4,486.90 4,207.70 4,507.70
Balance as per profit & loss account 86.9 15 330.7
Specific reserves 2,234.20 2,364.80 2,396.10
Security premium reserves (net of deductions) 1,969.60 2,100.20 2,131.50
Capital reserves (incl grants and subsidies) 1 1 1
Capital redemption reserves 13.6 13.6 13.6
Debenture and bond redemption reserves 250 250 250

Long term borrowings excl current portion 1,306.10 1,709.10 959.7

Long term borrowings incl current portion
From banks 12
From financial institutions
Syndicated across banks & institutions
Debentures and bonds 1,000.00 1,000.00 1,000.00
Loans from promoters, directors & shareholders
Less: current portion of long term borrowings 40.9 221 776

Deferred tax liability 162.7 143.3 168.4

Other long term liabilities 3.3 111.3 141.5
Long term provisions 5,190.00 6,013.40 6,475.40

Current liabilities & provisions 18,337.00 19,094.30 19,726.60

Short term borrowings 2,139.20 2,154.20 1,012.70
Short term trade payables and acceptances 11,996.90 11,674.20 11,452.50

Total assets 32,095.00 33,941.30 34,986.60

Net fixed assets 2,492.00 2,776.70 2,789.30

Net intangible assets 0 0.1 0.1
Land and buildings 1,430.50 1,785.60 1,827.00
Plant, machinery, computers & electrical assets 973 865.6 821.7

Capital work-in-progress 25.6 31.8 206.7

Net pre-operative exp pending allocation

Long term investments 673.1 594.2 560.9

Long term investments in group cos 673.1 594.2 560.9

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 Long term investments in non group cos 0.2 0.2 0.2

Long term loans & advances 4,926.10 5,241.60 6,167.20

Deferred tax assets 416 632.1 671.7
Other long term assets 4,662.80 5,154.90 4,397.50

Current assets and loans & advances 18,899.40 19,510.00 20,193.30

Inventories 4,466.90 4,746.50 5,066.70
Trade & bills receivables 12,350.50 12,895.50 13,620.60
Cash & bank balance 543.1 376.6 555
Short term investments 33.3
Short term loans & advances 1,486.20 1,333.90 837.5

Addendum Information
Net fixed assets net of reval 2,409.00 2,695.80 2,710.70
Tangible net worth 7,012.90 6,788.90 7,436.30
Total outside liabilities 21,006.30 22,424.90 21,777.20

Number Of Companies

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 Chapter 3
Analysis and Interpretation

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3.1 Data collection
Income & Expenditure Summary (Industry
Benchmark) : Annualised : Mar 2014 - Mar 2016 :
Rs. Million
Bajaj Other domestic appliances
Electricals
Ltd.
Mar-14 Mar-15 Mar-16 Mar-16 Mar-14 Mar-15
12 mths 12 mths 12 mths
-
Total income 40,799.80 43,138.30 46,711.90 4,04,533.00 4,26,386.90 3,01,697.80
Sales 40,649.00 42,895.30 46,483.50 3,95,396.30 4,18,286.40 2,90,228.50
Industrial sales 11,543.80 13,963.20 15,869.30 2,32,298.10 2,31,879.00 1,38,106.60
Income from non-financial services 29,105.20 28,932.10 30,614.20 1,63,098.20 1,86,407.40 1,52,121.90
Income from financial services 140.1 192 187.1 2,643.70 3,475.80 5,367.70
Interest income 122.5 167.1 162 997.9 1,042.40 864.8
Dividends 0 1,041.50 992.7 1,036.00
Income from treasury operations 1.8 425.7 1,129.40 3,213.70
Other income 4.1 9.1 5.8 192 178 156.6
Prior period and extraordinary income 6.6 41.9 35.5 6,301.00 4,446.70 5,945.00

Change in stock( opening) 538.7 317.3 318.1 8,468.50 4,862.30 6,325.70

Total expenses 41,391.60 43,595.10 46,074.00 4,04,221.30 4,22,194.20 2,99,246.50

Operating expenses 39,807.70 41,846.80 43,930.60 3,81,509.10 3,99,647.50 2,81,358.50
Raw materials, stores & spares 2,421.70 2,327.90 1,869.40 1,51,958.60 1,46,975.60 80,341.10
Purchase of finished goods 27,782.70 28,660.30 29,349.50 1,22,068.70 1,37,756.30 1,08,854.20
Packaging and packing expenses 38.2 53.2 75.5 740.5 1,436.70 1,788.00
Power, fuel & water charges 142.8 153.7 158.2 4,476.90 3,380.40 2,968.00
Compensation to employees 1,860.20 2,262.80 2,836.90 27,906.00 29,377.20 29,380.30
Indirect taxes 372.6 290.7 399.8 22,165.30 20,721.20 10,653.80
Royalties, technical know-how fees, etc 1,756.90 1,768.70 375.2
Rent & lease rent 333.3 381.9 407.9 2,966.90 3,367.60 2,587.60
Repairs & maintenance 67.3 80.3 82.3 2,007.30 1,907.20 1,519.30
Insurance premium paid 55.8 68.1 69.3 456.9 463.1 342.3
Outsourced manufacturing jobs 2,414.20 2,224.90 2,945.70 853.9 3,069.30 2,804.90
Outsourced professional jobs 9.2 10.8 14.2 6,040.40 6,076.10 3,501.60
Non-executive directors' fees 4.6 6.8 6.8 7.4 8.3 10.4
Selling & distribution expenses 2,752.00 3,537.90 3,685.00 25,757.20 25,063.50 19,099.20
Travel expenses 497.7 561.8 629.3 2,439.00 3,025.10 2,703.50
Communications expenses 73.1 79.7 102.9 439.9 441.1 116.1
Printing & stationery expenses 23.2 26.3 30 34.8 38.5 40.6
Miscellaneous expenditure 1,069.40 1,288.00 1,393.30 10,327.50 13,334.80 11,771.60
Other operational exp of industrial ent 3,028.70 2,400.50 3,660.60
Other operational exp of non-fin services ent
Share of loss in other enterprises
Financial services expenses 783 1,044.30 1,014.10 6,523.10 7,623.10 6,751.80
Fee based financial services expenses 190.1 181.6 86.8
Fund based financial services expenses 783 1,044.30 1,014.10 6,333.00 7,441.50 6,665.00
Non-cash charges 806.1 772.7 549.5 9,091.80 10,035.00 7,253.90
Depreciation 247.5 290.3 272.4 7,512.00 7,703.80 6,232.90
Amortisation 3.3 0.1
Write-offs 70.6 27.1 193.9 1,056.30 924 482.1
Provisions 488 455.3 83.2 523.5 1,403.90 538.8

14 | P a g e
 Prior period and extraordinary expenses 1.3 6.8 1.2 3,285.00 1,719.10 2,048.50

Provision for direct tax -6.5 -75.5 578.6 3,812.30 3,169.50 1,833.80

Profit after tax -53.1 -139.5 956 8,780.20 9,055.00 8,777.00

Addendum Information
Total income net of P&E 40,793.20 43,096.40 46,676.40 3,98,232.00 4,21,940.20 2,95,752.80
Net sales 40,276.40 42,604.60 46,083.70 3,73,209.80 3,97,545.20 2,79,554.60
Cost of goods sold 34,066.20 35,317.10 36,650.10 3,07,177.10 3,23,137.80 2,25,450.50
Cost of sales 39,622.20 41,978.90 43,989.90 3,85,704.80 4,03,643.80 2,84,836.20
Cost of sales per day 108.6 115 120.5 1,056.70 1,105.90 780.4

Number Of Companies 41 33 29

Bajaj Electricals Ltd. Vs Other Domestic Appliances

Balance Sheet Summary (Industry Benchmark)

: Annualised : Mar 2014 - Mar 2016 : Rs. Million
Bajaj Electricals Ltd. Other domestic appliances

Mar-14 Mar-15 Mar-16 Mar-16 Mar-14 Mar-15

12 12 12
mths mths mths
-
32,095. 33,941. 34,986. 2,48,519. 2,64,370. 2,32,139.
Total liabilities 00 30 60 40 80 70

Total Capital 199.9 201.5 201.9 7,914.20 8,698.70 6,193.30

Paid up equity capital 199.9 201.5 201.9 7,650.20 8,023.70 5,650.70
Paid up preference capital 256.2 666.6 535

Share appln money & suspense account 5 32 5

6,891.0 6,668.4 7,313.1 78,201.3 82,031.7 73,239.0

Reserves and funds 0 0 0 0 0 0
4,573.8 4,222.7 4,838.4 64,110.4 62,656.5 51,618.5
Free reserves 0 0 0 0 0 0
4,486.9 4,207.7 4,507.7 20,419.4 18,239.8 17,725.2
General reserves 0 0 0 0 0 0
43,691.0 44,399.4 33,876.0
Balance as per profit & loss account 86.9 15 330.7 0 0 0
2,234.2 2,364.8 2,396.1 13,762.0 19,139.6 21,387.0
Specific reserves 0 0 0 0 0 0
1,969.6 2,100.2 2,131.5 13,910.0 14,008.9
Security premium reserves (net of deductions) 0 0 0 9,098.60 0 0
Capital reserves (incl grants and subsidies) 1 1 1 585 678.6 943.4
Capital redemption reserves 13.6 13.6 13.6 1,255.40 1,386.70 1,518.30
Debenture and bond redemption reserves 250 250 250 3.8 250 250

1,306.1 1,709.1 31,636.0 29,793.8 18,447.6

Long term borrowings excl current portion 0 0 959.7 0 0 0
Long term borrowings incl current portion
From banks 12 1,147.50 3,538.40 4,091.70
From financial institutions 2.7
Syndicated across banks & institutions
1,000.0 1,000.0 1,000.0
Debentures and bonds 0 0 0 5,486.10 6,430.00 6,430.00
Loans from promoters, directors & shareholders 98.9 95 94.3

15 | P a g e
 Less: current portion of long term borrowings 40.9 221 776 1,857.40 3,230.00 3,852.50

Deferred tax liability 162.7 143.3 168.4 4,847.90 4,637.50 3,985.00

Other long term liabilities 3.3 111.3 141.5 3,140.40 2,890.00 3,165.10
5,190.0 6,013.4 6,475.4 11,179.2 11,776.0 12,271.9
Long term provisions 0 0 0 0 0 0

18,337. 19,094. 19,726. 1,11,568. 1,24,538. 1,14,837.

Current liabilities & provisions 00 30 60 40 10 80
2,139.2 2,154.2 1,012.7 24,373.9 30,038.5 37,600.1
Short term borrowings 0 0 0 0 0 0
11,996. 11,674. 11,452. 53,188.3 53,762.5 41,505.2
Short term trade payables and acceptances 90 20 50 0 0 0

32,095. 33,941. 34,986. 2,48,519. 2,64,370. 2,32,139.

Total assets 00 30 60 40 80 70

2,492.0 2,776.7 2,789.3 62,834.4 60,526.8 48,998.5

Net fixed assets 0 0 0 0 0 0
Net intangible assets 0 0.1 0.1 5,166.20 5,639.20 4,802.70
1,430.5 1,785.6 1,827.0 16,002.0 16,990.0 17,917.7
Land and buildings 0 0 0 0 0 0
39,006.0 35,037.9 23,804.1
Plant, machinery, computers & electrical assets 973 865.6 821.7 0 0 0

Capital work-in-progress 25.6 31.8 206.7 4,571.50 4,038.60 2,378.00

Net pre-operative exp pending allocation 5.8

11,318.3 15,054.5
Long term investments 673.1 594.2 560.9 7,365.30 0 0
10,343.0 14,498.6
Long term investments in group cos 673.1 594.2 560.9 6,440.60 0 0
Long term investments in non group cos 0.2 0.2 0.2 787.6 925.3 502.8

4,926.1 5,241.6 6,167.2 16,318.3 18,307.9 18,140.8

Long term loans & advances 0 0 0 0 0 0
Deferred tax assets 416 632.1 671.7 4,900.70 5,375.00 4,195.90
4,662.8 5,154.9 4,397.5 14,812.9 13,086.1 11,719.6
Other long term assets 0 0 0 0 0 0

18,899. 19,510. 20,193. 1,37,710. 1,51,718. 1,31,652.

Current assets and loans & advances 40 00 30 50 10 40
4,466.9 4,746.5 5,066.7 57,843.3 61,268.3 51,849.4
Inventories 0 0 0 0 0 0
12,350. 12,895. 13,620. 55,326.3 63,977.8 60,062.4
Trade & bills receivables 50 50 60 0 0 0
11,587.7 11,297.7
Cash & bank balance 543.1 376.6 555 0 0 6,825.10
Short term investments 33.3 645.3 443.2 588.4
1,486.2 1,333.9 10,483.5
Short term loans & advances 0 0 837.5 8,033.70 0 9,592.60

Addendum Information
2,409.0 2,695.8 2,710.7 62,505.5 60,291.2 48,765.0
Net fixed assets net of reval 0 0 0 0 0 0
7,012.9 6,788.9 7,436.3 80,385.2 84,187.8 73,858.1
Tangible net worth 0 0 0 0 0 0
21,006. 22,424. 21,777. 1,63,061. 1,80,347. 1,69,506.
Total outside liabilities 30 90 20 60 00 90

Number Of Companies 41 33 29

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3.2 Tabulation
Common Size Analysis:
i) Horizontal
Mar-14 Mar-15 Mar-16 Mar-14 Mar-15 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths 12 mths
-
Total liabilities 32,095.00 33,941.30 34,986.60 100.00% 105.75% 109.01%

Total Capital 199.9 201.5 201.9 100.00% 100.80% 101.00%

Paid up equity capital 199.9 201.5 201.9 100.00% 100.80% 101.00%
Paid up preference capital
Reserves and funds 6,891.00 6,668.40 7,313.10 100.00% 96.77% 106.13%
Debenture and bond redemption
reserves 250 250 250 100.00% 100.00% 100.00%
Current liabilities & provisions 18,337.00 19,094.30 19,726.60 100.00% 104.13% 107.58%

Total assets 32,095.00 33,941.30 34,986.60 100.00% 105.75% 109.01%

Net fixed assets 2,492.00 2,776.70 2,789.30 100.00% 111.42% 111.93%

Net intangible assets 0 0.1 0.1 100.00%
Land and buildings 1,430.50 1,785.60 1,827.00 124.82% 127.72%
Plant, machinery, computers & electrical
assets 973 865.6 821.7 100.00% 88.96% 84.45%
Current assets and loans & advances 18,899.40 19,510.00 20,193.30 100.00% 103.23% 106.85%
ii) Vertical
Mar-14 Mar-15 Mar-16 Mar-14 Mar-15 Mar-16
12 mths 12 mths 12 mths 12 mths 12 mths 12 mths
-
Total liabilities 32,095.00 33,941.30 34,986.60 100.00% 100.00% 100.00%

Total Capital 199.9 201.5 201.9 0.62% 0.59% 0.58%

Paid up equity capital 199.9 201.5 201.9 0.62% 0.59% 0.58%
Paid up preference capital
Reserves and funds 6,891.00 6,668.40 7,313.10 21.47% 19.65% 20.90%
Debenture and bond redemption reserves 250 250 250 0.78% 0.74% 0.71%
Current liabilities & provisions 18,337.00 19,094.30 19,726.60 57.13% 56.26% 56.38%

Total assets 32,095.00 33,941.30 34,986.60 100.00% 100.00% 100.00%

Net fixed assets 2,492.00 2,776.70 2,789.30 7.76% 8.18% 7.97%

Net intangible assets 0 0.1 0.1 0.00% 0.00% 0.00%
Land and buildings 1,430.50 1,785.60 1,827.00 4.46% 5.26% 5.22%
Plant, machinery, computers & electrical
assets 973 865.6 821.7 3.03% 2.55% 2.35%
Current assets and loans & advances 18,899.40 19,510.00 20,193.30 58.89% 57.48% 57.72%

17 | P a g e
Comparative Analysis:
Mar-14 Mar-15
12 12
Bajaj Electricals Ltd mths mths Change %Change
-
Total liabilities 32,095.00 33,941.30 1,846.30 5.75%

Total Capital 199.9 201.5 1.60 0.80%

Paid up equity capital 199.9 201.5 1.60 0.80%
Paid up preference capital

Share appln money & suspense account 5

Reserves and funds 6,891.00 6,668.40 -222.60 -3.23%

Free reserves 4,573.80 4,222.70 -351.10 -7.68%
General reserves 4,486.90 4,207.70 -279.20 -6.22%
Balance as per profit & loss account 86.9 15 -71.90 -82.74%
Specific reserves 2,234.20 2,364.80 130.60 5.85%
Security premium reserves (net of
deductions) 1,969.60 2,100.20 130.60 6.63%
Capital reserves (incl grants and subsidies) 1 1 0.00 0.00%
Capital redemption reserves 13.6 13.6 0.00 0.00%
Debenture and bond redemption reserves 250 250 0.00 0.00%

Long term borrowings excl current portion 1,306.10 1,709.10 403.00 30.86%
Long term borrowings incl current portion
From banks 12
From financial institutions
Syndicated across banks & institutions
Debentures and bonds 1,000.00 1,000.00 0.00 0.00%
Loans from promoters, directors &
shareholders
Less: current portion of long term borrowings 40.9 221 180.10 440.34%

Deferred tax liability 162.7 143.3 -19.40 -11.92%

Other long term liabilities 3.3 111.3 108.00 3272.73%
Long term provisions 5,190.00 6,013.40 823.40 15.87%

Current liabilities & provisions 18,337.00 19,094.30 757.30 4.13%

Short term borrowings 2,139.20 2,154.20 15.00 0.70%
Short term trade payables and acceptances 11,996.90 11,674.20 -322.70 -0.0269

%
Change Change
Total assets 32,095.00 33,941.30 1,846.30 5.75%
Net fixed assets 2,492.00 2,776.70 284.70 11.42%

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 Net intangible assets 0 0.1 0.10
Land and buildings 1,430.50 1,785.60 355.10 24.82%
Plant, machinery, computers & electrical
assets 973 865.6 -107.40 -11.04%

Capital work-in-progress 25.6 31.8 6.20 24.22%

Net pre-operative exp pending allocation

Long term investments 673.1 594.2 -78.9 -11.72%

Long term investments in group cos 673.1 594.2 -78.9 -11.72%
Long term investments in non group cos 0.2 0.2 0 0.00%

Long term loans & advances 4,926.10 5,241.60 315.50 6.40%

Deferred tax assets 416 632.1 216.10 51.95%
Other long term assets 4,662.80 5,154.90 492.10 10.55%

Current assets and loans & advances 18,899.40 19,510.00 610.60 3.23%
Inventories 4,466.90 4,746.50 279.60 6.26%
Trade & bills receivables 12,350.50 12,895.50 545.00 4.41%
Cash & bank balance 543.1 376.6 -166.50 -30.66%
Short term investments
Short term loans & advances 1,486.20 1,333.90 -152.30 -10.25%

Mar-15 Mar-16 Mar-14 Mar-16

12 mths 12 mths Change %change 12 mths 12 mths Change %change

33,941.30 34,986.60 1,045.30 3.08% 32,095.00 34,986.60 2,891.60 9.01%

201.5 201.9 0.40 0.20% 199.9 201.9 2 101.00%

201.5 201.9 0.40 0.20% 199.9 201.9 2 1.00%

6,668.40 7,313.10 644.70 9.67% 6,891.00 7,313.10 422.10 6.13%

4,222.70 4,838.40 615.70 14.58% 4,573.80 4,838.40 264.60 5.79%
4,207.70 4,507.70 300.00 7.13% 4,486.90 4,507.70 20.80 0.46%
15 330.7 315.70 2104.67% 86.9 330.7 243.80 280.55%
2,364.80 2,396.10 31.30 1.32% 2,234.20 2,396.10 161.90 7.25%
2,100.20 2,131.50 31.30 1.49% 1,969.60 2,131.50 161.90 8.22%
1 1 0.00 0.00% 1 1 0.00 0.00%
13.6 13.6 0.00 0.00% 13.6 13.6 0.00 0.00%
250 250 0.00 0.00% 250 250 0.00 0.00%

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 1,709.10 959.7 -749.40 -43.85% 1,306.10 959.7 -346.40 -26.52%

12

1,000.00 1,000.00 0.00 0.00% 1,000.00 1,000.00 0.00 0.00%

221 776 555.00 251.13% 40.9 776 735.1 1797.31%

143.3 168.4 25.10 17.52% 162.7 168.4 5.7 3.50%

111.3 141.5 30.20 27.13% 3.3 141.5 138.2 4187.88%
6,013.40 6,475.40 462.00 7.68% 5,190.00 6,475.40 1285.4 24.77%

19,094.30 19,726.60 632.30 3.31% 18,337.00 19,726.60 1,389.60 7.58%

2,154.20 1,012.70 -1,141.50 -52.99% 2,139.20 1,012.70 -1,126.50 -52.66%
11,674.20 11,452.50 -221.70 -1.90% 11,996.90 11,452.50 -544.40 -4.54%

Change %Change Change %change

33,941.30 34,986.60 1,045.30 3.08% 32,095.00 34,986.60 2,891.60 9.01%
2,776.70 2,789.30 12.60 0.45% 2,492.00 2,789.30 297.30 11.93%
0.1 0.10 0.00 0.00% 0 0.1 0.10
1,785.60 1827 41.40 2.32% 1,430.50 1,827.00 396.50 27.72%
865.6 821.70 -43.90 -5.07% 973 821.7 -151.30 -15.55%

31.8 206.7 174.90 550.00% 25.6 206.7 181.10 707.42%

594.2 560.9 -33.3 -5.60% 673.1 560.9 -112.2 -16.67%

594.2 560.9 -33.3 -5.60% 673.1 560.9 -112.2 -16.67%
0.2 0.2 0 0.00% 0.2 0.2 0 0.00%

5,241.60 6,167.20 925.60 17.66% 4,926.10 6,167.20 1,241.10 25.19%

632.1 671.70 39.60 6.26% 416 671.7 255.70 61.47%
5,154.90 4397.5 -757.40 -14.69% 4,662.80 4,397.50 -265.30 -5.69%

19,510.00 20,193.30 683.30 3.50% 18,899.40 20,193.30 1,293.90 6.85%

4,746.50 5,066.70 320.20 6.75% 4,466.90 5,066.70 599.80 13.43%
- -
12,895.50 1,362.60 11,532.90 -89.43% 12,350.50 1,362.60 10,987.90 -88.97%
376.6 555.00 178.40 47.37% 543.1 555 11.90 2.19%
33.3 33.30
1,333.90 837.5 -496.40 -37.21% 1,486.20 1,333.90 -152.30 -10.25%

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Trend Analysis:
Net Cost of goods Net Total
Year Sales Sales Profit Asset
2013-14 - - - -
2014-15 5.77% 3.67% 162.71% 5.75%
2015-16 14.41% 7.58% 1700.21% 9.00%

Ratio Analysis:
Liquidity Ratio
Bajaj Electrical Electrical Industry

Year Current Ratio Quick Ratio Current Ratio Quick Ratio

2013-14 1.2 1.02 1.4 0.97
2014-15 1.18 1.12 1.54 0.9
2015-16 1.17 1.16 1.36 1.04

Solvency Ratios
Bajaj Electrical
Year Debt Equity Ratio Capital Gearing Ratio Solvency Ratio
2013-
14 0.22 0.57 0.63
2014-
15 0.49 0.27 0.81
2015-
16 0.57 0.66 0.55
Electrical Industry
Year Debt Equity Ratio Capital Gearing Ratio Solvency Ratio
2013-
14 0.88 0.31 0.53
2014-
15 0.94 0.35 0.64
2015-
16 0.96 0.33 0.74

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 Activity Ratios
Bajaj Electricals
Inventory Debtors Creditors Fixed Assets Total Asset
Year Turnover Ratio Turnover Ratio Turnover Ratio Turnover Ratio Turnover Ratio
2013-
14 8.1 3.64 2.28 10.45 3.85
2014-
15 9.1 3.7 2.33 10.88 3.85
2015-
16 9.03 3.36 2.16 9.9 4
Electrical Industry
Inventory Debtors Creditors Fixed Assets Total Asset
Year Turnover Ratio Turnover Ratio Turnover Ratio Turnover Ratio Turnover Ratio
2013-
14 7.77 3.17 3.08 8.68 3.29
2014-
15 6.85 2.49 3.02 7.7 3.44
2015-
16 7.17 2.29 3.42 7.88 2.98

Profitability Ratio
Bajaj Electrical Electrical Industry
Gross Net Operating Return On Gross Net Operating Return On
Profit
Profit Profit Capital Profit Profit Profit Capital
Year Ratio Ratio Ratio Employed Ratio Ratio Ratio Employed
2013-14 0.53 1.51 12.86 0.44 0.77 9.13
0.3 0.3
2 1
2014-15 0.31 0.13 6.91 0.36 7.93
0.2 0. 0.2
6 1 5
2015-16 0.51 0.32 7.9 0.49 0.18 11.69
0.4 0.3
2 3

3.3 Analysis and interpretation

Ratio Analysis:-

Analysis: While there are numerous financial ratios, most investors are familiar with a few key
ratios, particularly the ones that are relatively easy to calculate. Some of these ratios include
the current ratio, return on equity, the debt-equity ratio, and the price/earnings (P/E) ratio.

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For a specific ratio, most companies have values that fall within a certain range. A company
whose ratio falls outside the range may be regarded as grossly undervalued or overvalued,
depending on the ratio.

For example, if the average P/E ratio of all companies in the S&P 500 index is 20, with the
majority of companies having a P/E between 15 and 25, a stock with a single-digit P/E would
be considered undervalued, while one with a P/E of 50 would be considered overvalued. Of
course, this ratio would typically only be considered as a starting point, with further analysis
required to identify if these stocks are really as undervalued or overvalued as the P/E ratios
suggest.

As well, ratios are usually only comparable across companies in the same sector, since an
acceptable ratio in one industry may be regarded as too high in another. For example,
companies in sectors such as utilities typically have a high debt-equity ratio, but a similar ratio
for a technology company may be regarded as unsustainably high.

Ratio analysis can provide an early warning of a potential improvement or deterioration in a

companys financial situation or performance. Analysts engage in extensive number-
crunching of the financial data in a companys quarterly financial reports for any such hints.

Successful companies generally have solid ratios in all areas, and any hints of weakness in one
area may spark a significant sell-off in the stock. Certain ratios are closely scrutinized because
of their relevance to a certain sector, as for instance inventory turnover for the retail sector
and days sales outstanding (DSOs) for technology companies.

Interpretation:

The standard norm of current ratio is 2:1 and the standard norm of quick ratio is 1:1. Here the
Current ratios of both Bajaj electrical and the electrical industry do not satisfy the standard
norms. So judging by current ratio neither the Bajaj electrical nor the electrical industry is in
a good liquidity position. But the quick ratios of both Bajaj Electricals and the electrical
industry almost satisfies the standard norms. So judging by quick ratio both Bajaj Electricals
and the electrical industry are in good liquidity position.

Acceptable solvency ratios vary from industry to industry. However, as a general rule of
thumb, a solvency ratio higher than 20% is considered to be financially sound. Generally, a
lower solvency ratio of a company reflects a higher probability of the company being on
default with its debt obligations. Here the solvency ratios of both Bajaj electrical and the
electrical industry are more than 20%. So both Bajaj electrical and the electrical industry are
in a good solvency position and thus they are financially sound.

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Comparative analysis:-

Analysis: Analysts like comparative statements because the reports show the effect of
business decisions on a company's bottom line. Analysts can identify trends and evaluate the
performance of managers, new lines of business and new products on one report, instead of
having to flip through individual financial statements. When comparing different companies,
a comparative statement shows how a business reacts to market conditions affecting an
entire industry.

Interpretation: We have done the comparative analysis of the balance sheet of Bajaj
Electricals. Here we have done the comparative analysis of 2014-15, 2015-16 and 2014-16.
For example if we consider the total liabilities of 2014-15 there is increase in total liability by
5.75% at the end of 2015 compared to the previous year. In this manner we have taken all
the elements of assets and liabilities.

Common Size analysis:-

Analysis: While most firms don't report their statements in common size format, it is
beneficial to compute it to compare two or more companies of differing size. Formatting
financial statements in this way reduces the bias that can occur and allows for the analysis of
a company over various time periods, revealing, for example, what percentage of sales is cost
of goods sold and how that value has changed over time.

Interpretation: Here we have taken both horizontal and vertical common size analysis. In
vertical analysis we are taken all the elements of say liability of a single year and we are
analysing. We have taken total liabilities as 100%. And we are calculating how much the other
factors are contributing to the total liability. For example In 2014 the total liability is 100%
and the reserve funds contribute to 21% and current liability as 57.13%.

In horizontal analysis we have taken all the elements of say liability of a different year and we
are analysing. We have taken total liabilities as 100% and we are calculating how much will
be the liability in the next year and how much it differ. Here we have to take one year as the
base year. For example in 2014 the total liability is 100% and the total liability increased to
105.75% by the next year.

Trend Analysis:-

Analysis: Trend analysis tries to predict a trend such as a bull market run, and ride that trend
until data suggests a trend reversal, such as a bull-to-bear market. Trend analysis is helpful
because moving with trends, and not against them, will lead to profit for an investor.

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A trend is the general direction the market is taking during a specified period of time. Trends
can be both upward and downward, relating to bullish and bearish markets, respectively.
While there is no specified minimum amount of time required for a direction to be considered
a trend, the longer the direction is maintained, the more notable the trend.

Trend analysis is the process of trying to look at current trends in order to predict future ones
and is considered a form of comparative analysis. This can include attempting to determine
whether a current market trend, such as gains in a particular market sector, is likely to
continue, as well as whether a trend in one market area could result in a trend in another.
Though an analysis may involve a large amount of data, there is no guarantee that the results
will be correct.

Interpretation: Here 2013-2014 is taken as the base year and we have taken four factors i.e
Net Sales, Cost of goods sales, Net profit, total Asset. We are analysing the change in their
growth for the next two year.

Net Sales: There is a 5.77% growth in Net sales compared to 2013-2014 and 14.41% growth
in the year 2015-2016 compared to 2013-2014.
Cost of Goods Sales: There is a 3.67% growth in Cost of Goods Sales compared to 2013-2014
and 7.58% growth in the year 2015-2016 compared to 2013-2014.
Net Profit: There is a 162.71% growth in Net Profit compared to 2013-2014 and 1700.21%
growth in the year 2015-2016 compared to 2013-2014.
Total Asset: There is a 5.75% growth in Cost of Goods Sales compared to 2013-2014 and 9.00%
growth in the year 2015-2016 compared to 2013-2014.

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 Chapter 4
Findings, Suggestions and
Conclusion

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Findings
Comparative Analysis:
In Vertical Analysis: we have considered the total liability as 100% and in 2014 Reserves and
funds contribute to 21% of 100%. Then Current liabilities and provisions contribute 57.75%.
Similarly total capital and paid equity capital contribute 0.62%.
In Horizontal Analysis: Here we have to data for multiple years. In 2014 the total liability
was 100% in 2015 the total liability was 105.75% so there is an increase in liability. In 2016
the liability is 109.01%. Here we have taken 2014 as the base year.

Common Size Analysis:

Here let us consider the 2014-15 comparative analysis. There is an increase of total Liability
by 5.75%. There is an increase in total capital by 0.80%. Now if we consider the asset portion
there is an increase of net fixed asset by 11.42%. Then there is an increase of land and
building by 24.82% and so on.

Trend Analysis:
2013-2014 is taken as the base year and we have taken four factors i.e. Net Sales, Cost of
goods sales, Net profit, total Asset. We are analysing the change in their growth for the next
two year.

Net Sales: There is a 5.77% growth in Net sales compared to 2013-2014 and 14.41% growth
in the year 2015-2016 compared to 2013-2014.
Cost of Goods Sales: There is a 3.67% growth in Cost of Goods Sales compared to 2013-2014
and 7.58% growth in the year 2015-2016 compared to 2013-2014.
Net Profit: There is a 162.71% growth in Net Profit compared to 2013-2014 and 170.21%
growth in the year 2015-2016 compared to 2013-2014.
Total Asset: There is a 5.75% growth in Cost of Goods Sales compared to 2013-2014 and
9.00% growth in the year 2015-2016 compared to 2013-2014.

Ratio:
The Current ratios of both Bajaj electrical and the electrical industry do not satisfy the
standard norms. So judging by current ratio neither the Bajaj electrical nor the electrical
industry is in a good liquidity position. But the quick ratios of both Bajaj Electricals and the
electrical industry almost satisfies the standard norms. So judging by quick ratio both Bajaj
Electricals and the electrical industry are in good liquidity position.
The solvency ratios of both Bajaj electrical and the electrical industry are more than 20%. So
both Bajaj electrical and the electrical industry are in a good solvency position and thus they
are financially sound.

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Suggestions
From the liquidity analysis it is clear that the overall liquidity position of the company is not
at all satisfactory at the present level. On the whole, the liquidity analysis of Bajaj Electricals
exposes the serious weakness of the company in managing its working capital. The three
liquidity ratios i.e. Current ratio and Quick ratio which are considered to be the best available
test of the companys creditworthiness are far from satisfactory. Quick ratio is less than the
standard norm i.e. 1:1. We call them liquidity ratios as they testify to liquidity of the company.
This further signifies that the short-term solvency of Bajaj Electricals is under serious strain as
its liquidity position is highly vulnerable. The creditors stand at considerable risk as the
company is not in a position to meet its current obligations without infusion of working capital
from the government or some other external sources. Since Bajaj Electricals is a public sector
company, low liquidity may not have a significant impact on its borrowing power, but this
situation may not continue forever. With more measures of liberalization and reforms in the
coming years, the govt. may ask the company to stand on its own feet and generate internal
resources to take care of its short-term capital requirements.
It may be noted in this connection that the years 2013-14, 2014-15 and 2015-16 have shown
some improvements in the liquidity position of Bajaj Electricals. Quick ratio were at their best
in these years. This is because Bajaj Electricals earned profits during those years.
It is observed from profitability analysis that in general all the profitability ratios have shown
positive results except in the year 2013-14, 2014-15 and 2015-16 where the company has
earned profits. Thus, profitability ratios are satisfactory.
The trend analysis shows that the company is experiencing continuous growth in net sales,
net profit and total assets which indicates that the company has been improving over the
study period.
The debt/equity ratio measures a companys debt relative to the total value of its stock, it is
most often used to gauge the extent to which a company is taking on debts as a means of
leveraging (attempting to increase its value by using borrowed money to fund various
projects). A high debt/equity ratio generally means that a company has been aggressive in
financing its growth with debt. Aggressive leveraging practices are often associated with high
levels of risk. This may result in volatile earnings as a result of the additional interest expense.

Conclusion
This project of financial statement analysis is not merely a work of the project but a brief
knowledge and experience of that how to analyse the financial performance of the firm. The
study undertaken has brought in to the light of the conclusion that the financial position of
Bajaj Electricals is good but it need to reduce its current liabilities. According to this project
we came to know that from the analysis of financial statements it is clear that Bajaj
Electricals have been incurring profit during the period of study.

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BIBLIOGRAPHY:
Websites:

www.moneycontrol.com
www.investopedia.com

Books:

Accounting For Managers (M. E Tukaram Rao)

Accounting for Managers (T. Ramchandran)

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