Fac New

Financial Analysis
JSW Energy
Vs
Adani Power
Submitted by: Group 6

Arvind Kumar Upadhyaya(X01005)
Manoj Hanagandi (X01015)
Rajeev Kumar Singh (X01022)
Shabahat Kareem (X01026)
Vikash Kumar Singh(X01030)
1|Page JSW VS Adani

Power Sector in India
Power is one of the most critical infrastructures for the development of a nation. As the
country grows economically, the demand for power increases significantly. In India the
demand for power has grown at an average rate of 3.6% per annum over the past 30 years.
India is the 6th largest in terms of power generation. Sources of power generation ranges from
conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to non-
conventional source such as wind, solar, and agricultural and domestic waste. Even though
the country is investing heavily on renewable energy, it depends fully on conventional
sources. About 65% of the electricity consumed in India is generated by thermal power
plants, 22% by hydroelectric power plants, 3% by nuclear power plants and rest 10% by
other alternate sources like solar, wind, biomass etc. 53.7% of India’s commercial energy
demand is met through the country’s vast coal reserves.
In order to study and analyse the Indian power sector, we have chosen JSW Energy Limited
and Adani Power. In this report we first look into the above firms and their history. Later we
compare the financial performance of both in order to capture possible economic difference.
The financial performance is compared using financial ratio analysis, Common size
statements and trend analysis.
JSW Energy Limited:
Established in 1994, JSW Energy Limited is a power utility arm of JSW group. It currently
generates 4531 MW of power, out of which 3140 MW is thermal and 1391 MW is hydro. In
the last fiscal year, the company has ventured into the renewables with a plan to install solar
power systems and solar PV module manufacturing capacity. It has also announced its entry
into the Electrical Vehicle manufacturing and signed MOUs with many states. Apart from
power generation the company has involved in Power trading, Power transmission, mining,
infrastructure and turbine manufacturing
Adani Power:
Adani Power Limited is the power business subsidiary of Indian conglomerate Adani Group.
Adani Power was started as a power trading company in 1996. It started generation in July
2009 by implementation of its first 330 MW of 4,620 MW at Mundra. The Mundra super
mega project is the largest coal-based power project of India and fifth largest in the world.
Adani Power has a total commissioned capacity of 10,440 MW, making the company the
largest private power producer in India. Apart from power generation the company involved
in Power transmission, CNG and PNG distribution, mining, infrastructure
2|Page JSW VS Adani

Financial Statements of JSW Energy Limited
JSW Energy
Balance sheet
Mar 18 Mar-17 Mar-16 Mar-15 Mar-14
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 1,640.05 1,627.95 1,626.79 1,625.70 1,640.05
Reserves and Surplus 9,469.65 8,740.51 8,077.34 6,706.79 4,981.12
Total Shareholders’
11,109.70 10,368.46 9,704.13 8,332.49 6,621.17
Funds
NON-CURRENT LIABILITIES
Long Term Borrowings 10,821.00 13,125.92 11947.51 7,505.78 8,932.32
Deferred Tax Liabilities
427.96 380.54 434.06 334.09 193.29
[Net]
Other Long-Term
0.26 0.56 1.81 1.87 1.86
Liabilities
Long Term Provisions 99.84 47.11 39.38 33.37 30.93
Total Non-Current
11,349.06 13,554.13 12,422.76 7,875.11 9,158.40
Liabilities
CURRENT LIABILITIES
Short Term Borrowings 8.19 8.67 1,589.00 148.22 207.69
Trade Payables 2,327.13 2,118.72 2,554.31 1,647.66 1,640.51
Other Current Liabilities 1983.56 2,282.13 2,255.77 1177.61 1226.85
Short Term Provisions 31.44 9.11 11.91 8.04 389.45
Total Current Liabilities 4,350.32 4,418.63 6,410.99 2,981.53 3,464.50
Total Capital and
26,809.08 28,341.22 28,537.88 19,189.13 19,244.07
Liabilities
ASSETS
NON-CURRENT ASSETS
Tangible Assets 17,296.98 17,876.50 18,653.33 11,700.30 13,352.32
Intangible Assets 1580.4 1614.11 645.83 9.66 282.39
Capital Work-In-Progress 293.53 530.74 320.61 291.54 614.58
Fixed Assets 19,170.91 20,021.35 19,619.77 12,001.50 14,249.29
Non-Current Investments 3,385.25 2,639.45 3,740.12 2,298.36 253.50
Long Term Loans and
1609.21 1,288.00 813.10 609.80 1,382.06
Advances
Other Non-Current Assets 524.61 524.24 122.05 475.48 99.22
Total Non-Current
24,689.98 24,473.04 24,295.04 15,385.14 15,984.07
Assets
CURRENT ASSETS
Current Investments 69.32 218.9 75.39 1,373.96 634.19
Inventories 449.96 510.29 635.83 544.47 415.77
Trade Receivables 1151.22 2273.35 2,906.36 1375.3 1197.63
Cash and Cash
138.52 590.71 238.55 268.15 567.45
Equivalents
Short Term Loans and 91 82.1 188.84 131.07 204.79
3|Page JSW VS Adani

Advances
Bank Balances 91 193.5 118.8 73.45
Other Current Assets 128.03 90.56 79.6 38.3 240.49
Total Current Assets 2,119.05 3,959.41 4,243.37 3,804.70 3,260.32
Total Assets 26,809.03 28,432.45 28,538.41 19,189.84 19,244.39
JSW Energy
Profit and Loss Statement
INCOME
Revenue from
8,048.96 8,263.43 9,824.49 9,380.16 8,705.42
Operations
Other Income 465.02 217 235.11 230.11 202.21
Total Revenue 8,513.98 8,480.43 10,059.60 9,610.27 8,907.63
EXPENSES
Cost of Power Purchased 74.58 153.1 543.15 416.83 652.6
Cost of Fuel 4,338.87 3,907.22 4,377.35 4,681.13 4,137.35
Employee Benefit
215.09 211.77 183.81 146.96 133.42
Expenses
Finance Costs 1455.91 1684.75 1498.11 1137.46 1205.94
Depreciation and
966.08 969.15 854.25 789.76 809.95
Amortisation Expenses
Other Expenses 657.88 666.98 694.06 511.87 530.65
Total Expenses 7,708.41 7,592.97 8,150.73 7,684.01 7,469.91
Profit/Loss Before
Exceptional, 805.57 887.46 1,908.87 1,926.26 1,437.72
Extraordinary Items
and Tax
share of profit/loss of
-49.49 4.06 -42.34
joint venture
Profit/Loss Before
Exceptional,
756.08 891.52 1,866.53 1,926.26 1,437.72
Extraordinary Items
and Tax
Exceptional items 417.94 150 34.23 377.69
Profit/Loss Before Tax 338.14 891.52 2,016.53 1,857.80 1,060.03
Tax Expenses-Continued Operations

Current Tax 210.76 196.1 556.26 412.12 240.79
Deferred Tax 42.47 72.91 0 102.87 42.81
Total Tax Expenses 253.23 269.01 556.26 514.99 283.6
Profit of the year 84.91 622.51 1,460.27 1,342.81 776.43
4|Page JSW VS Adani

Financial Statements of Adani Power
Adani Power
Balance sheet
Mar-18 Mar-17 Mar-16 Mar-15 Mar-14
Equities and Liabilities

SHAREHOLDER'S FUNDS
Equity Share Capital 3,856.94 3,856.94 3,333.94 2,871.92 2,871.92
Reserves and Surplus -2,972.40 -857.38 4,133.92 2,852.70 3,671.47
Total Shareholders’ Funds 884.54 2,999.56 7,467.86 5,724.62 6,543.39
Long Term Borrowings 34,559.85 36,650.61 35,417.55 35,089.66 33,131.48
Deferred Tax Liabilities [Net] 212.83 224.85 323.42 0 0
Other Long-Term Liabilities 5,782.18 5,942.15 6,509.85 60.53 396.84
Total Non-Current
40,600.93 42,849.99 42,280.41 35,308.87 33,906.57
Liabilities
CURRENT LIABILITIES
Short Term Borrowings 14,560.34 12,580.00 13,435.69 6,294.85 6,637.28
Trade Payables 7,626.37 7,399.75 6,232.21 5,684.69 3,750.87
Other Current Liabilities 5,841.28 5,672.04 6,369.64 5,190.47 7,383.20
Total Current Liabilities 28,037.81 25,661.50 26,045.94 17,440.73 18,288.98
Total Capital and Liabilities 69,523.28 71,511.05 75,794.21 58,474.22 58,738.94
ASSETS
NON-CURRENT ASSETS
Tangible Assets 51,940.42 54,193.15 56,744.04 45,064.54 46,354.51
Capital Work-In-Progress 119.86 124.61 87.92 191.34 3,659.83
Fixed Assets 52,066.39 54,324.93 56,838.53 45,264.07 50,017.41
Non-Current Investments 0.01 0.01 0.01 0.01 10.01
Long Term Loans and
1,389.95 1,249.50 0 581.08 904.91
Advances
Other Non-Current Assets 1,924.59 2,215.07 2,539.88 2,429.97 695.43
Total Non-Current Assets 55,571.55 57,980.12 59,569.03 48,282.08 51,634.71
CURRENT ASSETS
Current Investments 0 164.32 0.05 357.29 105.31
Inventories 869.19 1,760.41 1,619.20 1,629.05 1,280.96
Trade Receivables 6,069.81 7,704.34 12,476.60 3,489.54 1,543.27
Cash and Cash Equivalents 856.61 604.17 868.7 856.25 830.63
Short Term Loans and
3.66 2 704.99 601.33 506.82
Advances
Other Current Assets 6,152.46 3,295.69 555.64 3,258.68 2,837.24
Total Current Assets 13,951.73 13,530.93 16,225.18 10,192.14 7,104.23
Total Assets 69,523.28 71,511.05 75,794.21 58,474.22 58,738.94
5|Page JSW VS Adani

Adani Power
Profit and Loss Statement
Income
Revenue from
20,271.82 22,271.42 25,188.08 18,796.17 15,754.07
Operations [Gross]
Other Operating Revenues 339.22 344.09 344.09 27.56 14.01
Total Operating
20,611.04 22,615.51 25,532.17 18,823.73 15,768.08
Revenues
Other Income 482.39 418.96 201.58 241.41 186.32
Total Revenue 21,093.43 23,034.47 25,733.75 19,065.14 15,954.40

EXPENSES
Purchase of Stock-In Trade 309.26 215.68 189.55 290.6 329.02
Cost of Fuel 12,548.36 14,623.61 14,726.31 11,613.70 9,167.47
Employee Benefit
353.74 360.89 358.75 320.59 247.84
Expenses
Finance Costs 5,570.23 5,901.73 5,963.17 4,863.53 4,010.00
Depreciation and
2,698.72 2,672.36 2,665.82 1,818.19 2,218.45
Other Expenses 1,708.45 1,443.68 1,455.43 1,439.47 1,351.16
Total Expenses 23,188.76 25,217.95 25,359.03 20,346.08 17,323.94

Profit/Loss Before
Exceptional, Extra -2,095.33 -2,183.48 374.72 -1,280.94 -1,369.54
Ordinary Items and Tax
Exceptional Items 0 -4,076.69 0 -16.85 0
Profit/Loss Before Tax -2,095.33 -6,260.17 374.72 -1,297.79 -1,369.54
Current Tax 6.88 12.5 -0.3 0 0
Deferred Tax -12.03 -98.57 -175.78 0 -1,078.99
Total Tax Expenses -5.15 -86.07 -176.08 0 -1,078.99

Profit/Loss After Tax and
Before Extra-Ordinary -2,090.18 -6,174.10 550.8 -1,297.79 -290.55
Items
Profit/Loss from
-2,090.18 -6,174.10 550.8 -1,297.79 -290.55
Continuing Operations
Profit Loss from
0 0 0 482.16 0
Discontinuing Operations
Profit/Loss for The
-2,090.18 -6,174.10 550.8 -815.63 -290.55
Period
6|Page JSW VS Adani

Trend Analysis:
Balance Sheet:
JSW Energy-Balance sheet

EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 100.00 99.26 99.19 99.13 100
Total Share Capital 100.00 99.26 99.19 99.13 100
Reserves and Surplus 190.11 175.47 162.16 134.64 100
Total Reserves and Surplus 190.11 175.47 162.16 134.64 100
Total Shareholders’ Funds 167.79 156.60 146.56 125.85 100
Long Term Borrowings 121.14 146.95 133.76 84.03 100
Deferred Tax Liabilities [Net] 221.41 196.88 224.56 172.84 100
Other Long-Term Liabilities 13.98 30.11 97.31 100.54 100
Long Term Provisions 322.79 152.31 127.32 107.89 100
Total Non-Current Liabilities 123.92 148.00 135.64 85.99 100
CURRENT LIABILITIES
Short Term Borrowings 3.94 4.17 765.08 71.37 100
Trade Payables 141.85 129.15 155.70 100.44 100
Other Current Liabilities 161.68 186.02 183.87 95.99 100
Short Term Provisions 8.07 2.34 3.06 2.06 100
Total Current Liabilities 125.57 127.54 185.05 86.06 100
Total Capital and Liabilities 139.31 147.27 148.29 99.71 100
ASSETS
NON-CURRENT ASSETS
Tangible Assets 129.54 133.88 139.70 87.63 100
Intangible Assets 559.65 571.59 228.70 3.42 100
Capital Work-In-Progress 47.76 86.36 52.17 47.44 100
Fixed Assets 134.54 140.51 137.69 84.23 100
Non-Current Investments 1335.40 1548.58 1475.39 906.65 100
Long Term Loans and Advances 116.44 114.76 58.83 44.12 100
Other Non-Current Assets 528.73 528.36 123.01 479.22 100
Total Non-Current Assets 154.47 163.02 152.00 96.25 100
CURRENT ASSETS
Current Investments 10.93 24.30 11.89 216.65 100
Inventories 108.22 122.73 152.93 130.95 100
Trade Receivables 96.12 92.89 242.68 114.84 100
Cash and Cash Equivalents 24.41 13.19 42.04 47.26 100
Short Term Loans and Advances 44.44 40.09 92.21 64.00 100
Bank Balances
Other Current Assets 53.24 65.30 33.10 15.93 100
Total Current Assets 65.00 70.07 130.15 116.70 100
Total Assets 139.31 147.27 148.29 99.72 100
7|Page JSW VS Adani

1.Total shareholders fund –
 The total shareholder’s fund has increased significantly by 67.79% as compared to the
base year (2014). That is attributed to the increase in Reserves and Surplus.
2.Total non-current liabilities
 The balance sheet shows that the total non-current liabilities though decreased in 2015
by 14.01% but in next two years increased by 62.01%. However, there was an
increase in non-current liabilities by 19.74% as compared to the base year.
3.Total current liabilities
 The Balance sheet shows that the total current liabilities decreased in 2015 by 13.94%
as compared to the base year (2014). They increased in 2016 by 98.99% as compared
to preceding year. However, in next two years it showed a decreasing trend and
reached 59.98%. In Total, there was an increase in liability by 25.57% as compared to
base year (2014)
4.Total non-current asset
 The total non-current assets decreased in 2015 to 3.75%. It increased in next 2 years
by 66.77%. However, there is an increase in non-current asset in 2018 by 54.47% as
compared to the base year (2014).
5.Total Current asset
 The total current asset has increased till 2016 by 30.15%as compared to base year
(2014) and decreased by 65.15% in 2018 as compared to 2016. However, a decrease
in current asset by 35 % is reported in 2018 as compared to base year.
6.Total asset
 The total asset has increased by 48.29% in 2016 as compared to base year but reduced
by 8.98% in 2018 as compared to 2016. However, there is an increase in total asset by
39.31% as compared to base year (2014)
8|Page JSW VS Adani

Profit and Loss account:
JSW Energy -Profit and Loss
INCOME
Revenue from Operations [Gross] 92.46 94.92 112.85 107.75 100
Total Operating Revenues 92.46 94.92 112.85 107.75 100
Other Income 229.97 107.31 116.27 113.80 100
Total Revenue 95.58 95.20 112.93 107.89 100
EXPENSES
Cost of Power Purchased 11.43 23.46 83.23 63.87 100
Cost of Fuel 104.87 94.44 105.80 113.14 100
Employee Benefit Expenses 161.21 158.72 137.77 110.15 100
Finance Costs 120.73 139.70 124.23 94.32 100
Depreciation and Amortisation
Expenses 100
119.28 119.66 105.47 97.51
Other Expenses 123.98 125.69 130.79 96.46 100
Total Expenses 103.19 101.65 109.11 102.87 100
Profit/Loss Before Exceptional,

Extraordinary Items and Tax 100
56.03 61.73 132.77 133.98
share of profit/loss of joint
venture
Profit/Loss Before Exceptional,
Extraordinary Items and Tax 100
52.59 62.01 129.83 263.20
Exceptional items -110.66 0.00 -39.72 9.06 100
Profit/Loss Before Tax 31.90 84.10 190.23 175.26 100
Tax Expenses-Continued
Operations
Current Tax
100
87.53 81.44 231.01 171.15
Deferred Tax 99.21 170.31 0.00 240.29 100
Total Tax Expenses 89.29 94.86 196.14 181.59 100
Profit of the year 100

10.94 80.18 188.07 172.95
9|Page JSW VS Adani

1.Total revenue
 There is increase in Total revenue by 12.93% from base year (2014) till March 2016
Thereafter the total revenue decline by 17.35% till 2018. However, there is a decline
in total revenue in 2018 by 5.58% w.r.t the base year (2014).
2.Total expense
 Income statement shows an increasing trend in total expense till 2016, thereafter
there was marginal decline by 8% in 2017 as compared to previous year (2016) in
expenses. Thereafter the expenses again rise by 2% in 2018 as compared to previous
year (2017). The maximum expense incurred by JSW energy was in the year 2016 i.e.
9.11% more than the base year.
3. Profit &loss per year

 JSW energy made profit with increasing rate till 2017(188.07%). After that there was
a profit but with decreasing rate that reached to 10.94% in 2018.
4.Revenue from operations(gross) –

 There is increase in revenue from operations from base year (2014) till March 2016
(12.85%). Latter revenue from operations(gross) fall till 2018 by 20.39% as compared
to 2016.
5.Total operating revenues –

 There is increase in total operating revenue from base year (2014) till March
2016(12.85%) and then reduced by 20.40% in 2018 as compared to 2016.
10 | P a g e JSW VS Adani
Common Size Statement of Balance Sheet:
JSW Energy
Common size statement of Balance sheet
EQUITIES AND
LIABILITIES
SHAREHOLDER'S
FUNDS
Equity Share Capital 6.12 5.74 5.70 8.47 8.52
Reserves and Surplus 35.32 30.84 28.30 34.95 25.88
Total Shareholders’ Funds 41.44 36.58 34.00 43.42 34.41
Long Term Borrowings 40.36 46.31 41.87 39.11 46.42
Deferred Tax Liabilities [Net] 1.60 1.34 1.52 1.74 1.00
Other Long-Term Liabilities 0.00 0.00 0.01 0.01 0.01
Total Non-Current
42.33 47.82 43.53 41.04 47.59
Liabilities
CURRENT LIABILITIES
Short Term Borrowings 0.03 0.03 5.57 0.77 1.08
Trade Payables 8.68 7.48 8.95 8.59 8.52
Other Current Liabilities 7.40 8.05 7.90 6.14 6.38
Total Current Liabilities 16.23 15.59 22.46 15.54 18.00
Total Capital and Liabilities 100.00 100.00 100.00 100.00 100.00
ASSETS
NON-CURRENT ASSETS
Tangible Assets 64.52 62.87 65.36 60.97 69.38
Fixed Assets 71.51 70.42 68.75 62.54 74.04
Long Term Loans and
6.00 4.53 2.85 3.18 7.18
Advances
Total Non-Current Assets 92.10 86.07 85.13 80.17 83.06
CURRENT ASSETS
Current Investments 0.26 0.77 0.26 7.16 3.30
Inventories 1.68 1.79 2.23 2.84 2.16
Trade Receivables 4.29 8.00 10.18 7.17 6.22
0.34 0.29 0.66 0.68 1.06
Advances
Bank Balances 0.34 0.68 0.42 0.38 0.00
Other Current Assets 0.48 0.32 0.28 0.20 1.25
Total Current Assets 7.90 13.93 14.87 19.83 16.94
Total Assets 100.00 100.00 100.00 100.00 100.00
Analysis of Balance sheet:
1.Total Shareholder’s fund:
 Equity Share capital has decreased from 8.52% to 6.12% over the last five years but at
the same time Reserves and Surplus increased from 26% to 35% and thus the reserves
and surplus balanced the effect of decrease in Share capital.
2.Other Long-Term Borrowings:
 Long term borrowing has increased over the five years in terms of crores but when
you consider the % of total liabilities, borrowing has decreased. This is because the
increase in total capital and liabilities of the company. After 2016 company’s non-
current asset increased, that means it invested the borrowed money in assets.
 Other long-term liabilities of JSW Energy decreased form 1.86% to almost zero in
five years. That means company owe less money to outsiders. It is good for the
company
3. Long-term Liabilities:
 There is a sharp increase in long term liabilities in year 2016 as compared to 2015 and
at the same time the Long-term asset has also increased sharply. That means the
company borrowed money and invested in buying long term asset. Intangible asset
has also increased in 2016 sharply from 0.05% to 2.26%, that means the goodwill of
the company or other non-tangible assets increased.
4. Short-term Borrowings:
 Short-term borrowings of JSW Energy were almost less than 1% in all the years
except in 2016, about 5.57%. That means in 2016 company borrowed money for
short-term needs.
5.Tangible assets:
 Tangible asset has remained same after first two years.
6.Intangible assets:
 After 2015 tangible increased from 0.05% to 5.9% till 2018, It shows that the
intangible assets such as goodwill increased. It is a good sign for the company.
7.Long-term loans and advances:
 After 2016 long-term loans and advance has almost doubled from 2.85% to 6%. It
indicates that the company has given more loans and advances to its suppliers and
blocked its cash.
8.Trade Receivables:
 There was sharp increase in Trade receivables in year 2015 by 3%, that means
company sold its energy on credit. After this year receivables decreased for 6% for
next 2 years. It is good sign for the company.
9.Inventories:
 Inventories of JSW Energy has remained less than 3% over last five years. It is good
sign that the company has less inventory with it.
10.Total Current Assets:
 Total current assets have decreased over 5 years, shows that the company has been
operating with less working capital. At the same time, you can see the increase in %
of Non-current assets over 5 years.
Common size statement Profit and Loss Statement:
JSW Energy
Common size statement of P & L Statement
INCOME
Revenue from Operations 100.00 100.00 100.00 100.00 100.00

Other Income 5.78 2.63 2.39 2.45 2.32
Total Revenue 105.78 102.63 102.39 102.45 102.32
EXPENSES
Cost of Power Purchased 0.93 1.85 5.53 4.44 7.50
Cost of Fuel 53.91 47.28 44.56 49.90 47.53
Employee Benefit Expenses 2.67 2.56 1.87 1.57 1.53
Finance Costs 18.09 20.39 15.25 12.13 13.85
Depreciation and
12.00 11.73 8.70 8.42 9.30
Other Expenses 8.17 8.07 7.06 5.46 6.10
Total Expenses 95.77 91.89 82.96 81.92 85.81
Profit/Loss Before
Exceptional,
10.01 10.74 19.43 20.54 16.52
Extraordinary Items and
Tax
share of profit/loss of joint
-0.61 0.05 -0.43 0.00 0.00
venture
Profit/Loss Before
Exceptional,
9.39 10.79 19.00 40.34 16.52
Extraordinary Items and
Tax
Exceptional items 5.19 0.00 1.53 -0.36 -4.34
Profit/Loss Before Tax 4.20 10.79 20.53 19.81 12.18
Tax Expenses-Continued Operations

Current Tax 2.62 2.37 5.66 4.39 2.77
Deferred Tax 0.53 0.88 0.00 1.10 0.49
Total Tax Expenses 3.15 3.26 5.66 5.49 3.26
Profit of the year 1.05 7.53 14.86 14.32 8.92
Analysis of Profit and Loss Statement:
1.Other Income:
 Over the last 5 years other income increased from 2.3% to 5.7%. That means
company earned more money from activities other than Operating.
2.Cost of Fuel:
 Over the 5 years the cost of the fuel has increased from 47.53% to 53.91%. Increase
in cost of fuel increased the cost for producing the power and decreased the profit
margin.
3.Employee Benefit Expenses:
 Employee benefit expenses have increased from 1.5% to 2.6% indicating the
company’s policy towards the employees.
4.Total Expenses:
 Total expense has increased from 86% to 96% over the last five years. This increase
in expense is attributable to the increase in financial cost and depreciation and
amortisation cost. This increase in expense has a direct effect on total profit of the
company as evident in PBT, which decreased from 12% to 4.2%.
5.Finance Costs:
 Finance costs have increased from 13.85% to 18% over the last five years and is
attributed to increase in borrowings for acquiring assets.
6.Profit After Tax:
 In year 2018 the PAT is lowest in last 5 years and that is attributed to the increase in
exceptional items to 5.2%. Apart from JSW Energy is in profit for all 5 years.
RATIO ANALYSIS - JSW ENERGY
Profitability 2014-
A. Formulae's 2018-17 2017-16 2016-15 2015-14
Ratio 13
Gross Profit
1 Gross Profit/Sales 48.16 52.12 51.08 46.95 46.22
ratio
Net profit
2 Net profit/sales 0.99 7.34 14.51 13.97 8.71
ratio
Return on PAT/Avg. Equity
3 0.76 6.00 15.04 16.11 11.72
equity Fund
Return on
4 PAT/Total Assets 0.310 2.180 5.110 6.990 4.030
Assets
Return on
EBIT/Avg. Capital
5 capital 1.54 3.79 9.31 11.72 6.81
Employed
employed
Asset
Total sales/Avg.
6 Turnover 30.82 29.77 42.15 50.00 92.57
Assets
Ratio
B. Liquidity Ratio
Current
Current assets/Current
8 Ratio Liability 0.49 0.90 0.66 1.28 0.94
(Current Assets-
Stock-Prepaid
Expenses)/
9 Quick Ratio Current Liability 0.38 0.78 0.56 1.09 0.82
C. Efficiency Ratio
Debtor Credit sales/
10 Turnover Avg (Debtors and
ratio Bills receivable) 189.21 174.76 77.68 48.86 24.54
Inventory
11 Turnover COGS/Avg. Stock
Ratio 9.19 7.09 8.34 10.62 11.52
Creditors Credit Purchase/
12 Turnover Avg (Creditors and
Ratio Bill Payable) 407.45 330.49 155.85 117.71 62.50
D Solvency Ratio
Long term
Debt to Long term Debt/
13
Equity owners fund
Ratio 0.97 1.27 1.23 0.90 1.35
All Liab + Pref
14 Debt to Share Capital/
Equity Ratio proprietors fund 0.39 0.43 0.15 0.14 0.18
Other Ratio's
E
Proprietor Proprietor fund/total

16 Ratio asset 0.41 0.36 0.34 0.43 0.34
Working
Capital Total sales/Working
turnover capital -
17 ratio -3.82 -18.47 -4.64 11.67 43.63
(Pref Share Capital
Capital +Long term Liab
Gearing +Debenture)/Equity
18 Ratio Shareholders fund 0.974 1.266 1.231 0.901 1.349
Inventory to
Working Closing Stock/
Capital Working Capital
19 Ratio -0.20 -1.11 -0.29 0.66 -2.04
Operating (COGS + Operating
20 Ratio Expense)/Sales 0.52 0.48 0.57 0.62 0.63
Operating
Operating Net Profit/
Net
Net sales
21 Profit Ratio 0.040 0.105 0.200 0.193 0.119
Return on
Return/
Working -
Working Capital
22 Capital -0.038 -1.356 -0.674 1.631 3.803
Debt Service
EBITDA/
coverage
Total Debt Services
25 Ratio 0.0 0.2 1.9 2.3 1.6
Shareholder’s
equity/
Equity Ratio
Total Capital
26 employed 0.51 0.44 0.45 0.53 0.43
Ratio analysis report of JSW Energy
Profitability Ratio:
1.Gross Profit Ratio:
 It is a popular tool to evaluate the operational performance of the business. In analysis

of JSW energy, it is found that GPR is almost same in last five year i.e. 50%.
2.Net Profit Ratio:
 In analysis, it is found that net profit is decreased from 8.71% to 1% in last five years.
It means company is not able to generate profit from sales, which is bad sign.
3.Return on equity:
 It shows the percentage of profit earned on the equity of the company. It has
decreased from 11.72% to 0.76%, which is a bad sign.
4.Return on Assets:
 It measures the ability of the company to generate profit from its total assets. it has
decreased from 4.030% to 0.310%. It shows that the company is not able to generate
profit from its total asset, which shows inefficiency of the company.
5.Return on capital employed:
 It is used to compare efficiency of capital usage of business within the same industry.
It gives us the percentage of profit earned on capital employed. it has been decreased
from 6.81% to 1.54%, this shows that the company is not even able to generate
operating profit.
6.Asset Turnover Ratio:
 It shows that, by utilizing total asset how much sales company is generating. It has
decreased from 92.57% to 30.82% this shows that the company is not efficiently
utilizing its assets.
Liquidity Ratio:
7.Current Ratio:
 It measures the ability of the company to pay current obligations. It is found current
ratio is decreased from 0.94 to 0.49. It means company have more current liabilities
than current assets.
8.Quick Ratio:
 It measures the ability of the company to pay current liabilities immediately. It has
decreased from 0.82 to 0.38. it means company is not in position to pay its quick
liabilities.
Efficiency Ratio:
9.Debt Turnover Ratio:

 It measures the ability of the company to make and collect sales. The lesser the DTR,
the earlier we get our payments. It has increased from 25days to 189 days. It means
company is getting his dues after long period, which shows inefficiency in collection
policy of the company.
10.Inventory Turnover Ratio:

 It measures the ability of the company to sell its inventory. In general, higher the ratio
the better it is, however, in JSW, ITR is decreased from 11.52 to 9.19, which shows
that the company is not efficient in managing their inventory.
11.Creditors Turnover Ratio:

 It measures the ability of the company to know time period under which, it has to pay
its dues. The higher the CTR, the more time we get. It has increased from 63days to
407 days. It means company gets more time to repay, which is good for the company.
Solvency Ratio:
12.Long Term Debt to Equity Ratio:

 It measures the percentage of assets that a business world needs to liquidate to pay off
its long-term debts. Higher ratio indicates higher risk. It has decreased from 1.35 to
0.97, which is a good sign.
13.Debt to Equity Ratio:

 A high debt-to-equity ratio indicates that a company may not be able to generate
enough cash to satisfy its debt obligations. However, low debt-to-equity ratios may
also indicate that a company is not taking advantage of the increased profits that
financial leverage may bring. It has increased from 0.18 to 0.39.
14.Interest Coverage Ratio:

 It measures the ability to pay interest out of current earning. The Higher the ICR, the
better it is.
Other Important Ratio’s:
15.Proprietor Ratio:
 It shows the proportion of total assets of a company which are financed by

proprietors’ funds. As we can see that is has increased from 34% to 41% which shows
that the company over the period had depends on owner’s fund. Banks check this ratio
before giving loan to measure the financial stability of the company.
16.Working Capital turnover ratio:
 It measures how efficiently a company is using its working capital to support a given
level of sales. In our case it is increasing from -43.63 to -3.82, which is a good sign.
17.Capital Gearing Ratio:
 It tells how much fix liability we have to pay. Companies with high CGR will have a
large amount of debt relative to their equity, means more financial risk. In JSW, CGR
is decreased from 1.349 to 0.974, which is a good sign.
18.Inventory to Working Capital Ratio:
 It measures what proportion of a company’s inventories is financed from its available

cash. It has increased from -2.04 to -0.20.
19.Operating Ratio:
 This ratio used to determine efficiency of a company’s management by comparing
operating expense to net sales. The smaller the ratio, the greater the organization
ability to generate profit. It has decreased from 0.63 to 0.52, which is good for the
company.
20.Operating Net Profit Ratio:
 It shows the proportion of operating net profit generated over net sales. It has
decreased from 0.119 to 0.04.
21.Return on Working Capital:
 This ratio is an indicator of working capital performance. It has increased from -3.803
to – 0.038, which is a good sign.
22.Debt Service coverage Ratio:
 Lenders are interested in DSCR to judge the firm ability to pay off current interest and
instalment. It has decreased from 1.6 to 0.01.
23.Equity Ratio:
 This ratio indicates proportion of owner’s fund to total fund invested in the business.
A high equity ratio indicates, a high financial strength. It has increased from0.43 to
0,51, which is a good sign.
Adani Power Trend Analysis
Adani Power-Balance sheet
EQUITIES AND
LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 134.30 134.30 116.09 100.00 100
Reserves and Surplus -80.96 -23.35 112.60 77.70 100
Total Shareholders’ Funds 13.52 45.84 114.13 87.49 100
NON-CURRENT
LIABILITIES
Long Term Borrowings 104.31 110.62 106.90 105.91 100
Deferred Tax Liabilities [Net]
Other Long-Term Liabilities 1457.06 1497.37 1640.42 15.25 100
Long Term Provisions 12.18 8.56 7.82 41.95 100
Total Non-Current Liabilities 119.74 126.38 124.70 104.14 100
CURRENT LIABILITIES
Short Term Borrowings 219.37 189.54 202.43 94.84 100
Trade Payables 203.32 197.28 166.15 151.56 100
Other Current Liabilities 79.12 76.82 86.27 70.30 100
Short Term Provisions 1.90 1.88 1.62 52.30 100
Total Current Liabilities 153.30 140.31 142.41 95.36 100
Total Capital and Liabilities 118.36 121.74 129.04 99.55 100
ASSETS
NON-CURRENT ASSETS
Tangible Assets 112.05 116.91 122.41 97.22 100
Intangible Assets 199.02 233.55 214.01 266.78 100
Capital Work-In-Progress 3.28 3.40 2.40 5.23 100
Fixed Assets 104.10 108.61 113.64 90.50 100
Non-Current Investments 0.10 0.10 0.10 0.10 100
Long Term Loans and
Advances 153.60 138.08 0.00 64.21 100
Other Non-Current Assets 276.75 318.52 365.22 349.42 100
Total Non-Current Assets 107.62 112.29 115.37 93.51 100
CURRENT ASSETS
Current Investments 0.00 156.03 0.05 339.27 100
Inventories 67.85 137.43 126.41 127.17 100
Trade Receivables 393.31 499.22 808.45 226.11 100
Cash and Cash Equivalents 103.13 72.74 104.58 103.08 100
Advances 0.72 0.39 139.10 118.65 100
Other Current Assets 216.85 116.16 19.58 114.85 100
Total Current Assets 196.39 190.46 228.39 143.47 100
Total Assets 118.36 121.74 129.04 99.55 100
1.Total shareholders fund
 The Adani’s balance sheet shows that the total shareholder’s fund has decreased in last 5 years
and finally reached to a low of 13.52% in 2018. However, there was some increase in total
shareholder’s fund by 14.13% in 2016.
2.Total non-current liabilities

 The Balance sheet shows that the total noncurrent liabilities have increased in last 4 years and
reached 26.38% in 2017 as compared to base year (2014). However, in 2018 there was decline
in non-current liabilities by 6.64% as compared to 2016.
3.Total current liabilities

 The balance sheet shows that the total current liabilities have increased in last 5 years and
reached to 53.30% (in 2018) above the base year (2014). However, there was some reduction in
liabilities in 2015 and 2017 as compare to the preceding years. In Total there was an increase in
liability by 53.30% as compared to base year (2014).
4.Total non-current asset

 The total non-current assets have decreased in 2015 by 6.49% as compared to the base year and
increased in 2016 by 21.86% as compared to 2015, but in next 2 years showed declining trend
and reached 7.75%. However, the non-current assets have increased by 7.62 % in 2018 as
compared to base year.
5.Total Current asset

 The total current asset has increased till 2015 by 128.39% as compared to the base year (2014).
However, it decreased by 32% in 2018 as compared to 2016. In total, there was an increase in
current asset by 96.39%in 2018 as compared to base year
6.Total asset
 The total asset has increased by 21.74% in 2017 as compared to base year but reduced by
10.68% in 2018 as compared to 2016.However, there is an increase in total asset by 18.36% as
compared to base year (2014).
Trend analysis of Profit and Loss Account:
Adani Profit and Loss Account

Revenue from Operations
[Gross] 128.68 141.37 159.88 119.31 100
Revenue from Operations
[Net] 128.68 141.37 159.88 119.31 100
Other Operating Revenues 2421.27 2456.03 2456.03 196.72 100
Total Operating Revenues 130.71 143.43 161.92 119.38 100
Other Income 258.90 224.86 108.19 129.57 100
Total Revenue 132.21 144.38 161.30 119.50 100
EXPENSES
Purchase of Stock-In Trade 93.99 65.55 57.61 88.32 100
Cost of Fuel 136.88 159.52 160.64 126.68 100
Employee Benefit Expenses 142.73 145.61 144.75 129.35 100
Finance Costs
138.91 147.18 148.71 121.29 100
Depreciation and
Amortisation Expenses 121.65 120.46 120.17 81.96 100
Other Expenses 126.44 106.85 107.72 106.54 100
Total Expenses 133.85 145.57 146.38 117.44 100
Profit/Loss Before
Exceptional, Extraordinary
Items and Tax 153.00 159.43 -27.36 93.53 100
Exceptional Items
Profit/Loss Before Tax
153.00 457.10 -27.36 94.76 100
Tax Expenses-Continued
Operations
Current Tax
Deferred Tax 1.11 9.14 16.29 0.00 100
Total Tax Expenses 0.48 7.98 16.32 0.00 100
Profit/Loss After Tax and
Before Extraordinary Items -719.39 -2124.97 -189.57 -446.67 100
Profit/Loss from Continuing
Operations -719.39 -2124.97 -189.57 -446.67 100
Profit Loss from
Net Profit Loss from
Profit/Loss for The Period -719.39 -2124.97 289.57 -280.72 100
1.Total revenue:
 Income statement shows that there is increase in Total revenue by 61.30% from base year
(2014) till March 2016 and then the total revenue decline by 29.09% in 2018. However, there is
an increase in total revenue in 2018 by 32.21% w.r.t the base year (2014)
2.Total expense:
 Income statement shows that there is increase in expenses in each year of business. The total
expense rises by 33.85% in 2018 as compared to base year. The maximum expense was done in
the year 2016 i.e. 46.38% more than the base year.
3. Profit and loss per year:

 There was a huge loss in year 2017(2024.97%) as compared to the base year (2014). This huge
profit that was preceded by a year of loss in year 2016(-189.57%). However, the year 2018
showed a loss of 719.39% much above the base year of 2017.
4.Revenue from operations(gross):

 There is increase in revenue from operations(gross) from base year (2014) till March 2016 by
59.88%. Latter revenue from operations(gross) fall till 2018 by 31.2% as compared to 2016.
5.Total operating revenues:

 There is increase in total operating revenue from base year (2014) till March 2016(61.92%) and
then reduced by 31.21% in 2018 as compared to 2016
Adani Power
Common Size Statement of Balance sheet
Equities and Liabilities
SHAREHOLDER'S FUNDS
Equity Share Capital 5.55 5.39 4.40 4.13 4.13
Reserves and Surplus -4.28 -1.20 5.45 4.10 5.28
Total Shareholders’ Funds 1.27 4.19 9.85 8.23 9.41
NON-CURRENT
LIABILITIES
Long Term Borrowings 49.71 51.25 46.73 50.47 47.66
Deferred Tax Liabilities [Net] 0.31 0.31 0.43 0.00 0.00
Other Long-Term Liabilities 8.32 8.31 8.59 0.09 0.57
Total Non-Current
58.40 59.92 55.78 50.79 48.77
Liabilities
CURRENT LIABILITIES
Short Term Borrowings 20.94 17.59 17.73 9.05 9.55
Trade Payables 10.97 10.35 8.22 8.18 5.40
Other Current Liabilities 8.40 7.93 8.40 7.47 10.62
Total Current Liabilities 40.33 35.88 34.36 25.09 26.31
Total Capital and Liabilities 100.00 100.00 100.00 100.00 100.00
NON-CURRENT ASSETS
Tangible Assets 74.71 75.78 74.87 77.07 78.92
Fixed Assets 74.89 75.97 74.99 77.41 85.15
Long Term Loans and
2.00 1.75 0.00 0.99 1.54
Advances
Total Non-Current Assets 79.93 81.08 78.59 82.57 87.91
CURRENT ASSETS
Current Investments 0.00 0.23 0.00 0.61 0.18
Inventories 1.25 2.46 2.14 2.79 2.18
Trade Receivables 8.73 10.77 16.46 5.97 2.63
0.01 0.00 0.93 1.03 0.86
Advances
Other r Current Assets 8.85 4.61 0.73 5.57 4.83
Total Current Assets 20.07 18.92 21.41 17.43 12.09
Total Assets 100.00 100.00 100.00 100.00 100.00
Analysis of balance sheet:
1. Total Shareholder’s fund:
 After 2016 reserves and surplus came down from 5.45% to -4.28%. Negative reserves and
surplus indicate that the company is loss. This has also decreased the total shareholder’s fund
from 9.47% to 1.27%.
2. Other Long-Term Borrowings:

 Other Long-term liabilities of Adani Power have increased from 0.57% to 8.32% over the last 5
years. That means the company owed the amount for items such as pension liabilities, capital
leases, customer deposits.
3.Long-term Liabilities:
 Long term liabilities have increase from 48% to 58% over the last five years. Company invested
this money in acquiring fixed asset.
4.Short-term Borrowings:
 Short term borrowings have increased from 10% to 20 % over the 5 years. The company has
borrowed money for day today activities and that is evident in increase in the current assets
from 4.8% to 8.8%. In year 2016 even though the company borrowed money for day today
activities, the current assets have decreased from 5.57% to 0.73%, this is because the money
was blocked in trade receivables as the it increased from 2.6% to 16.4%.
5. Tangible assets:
 In 2016 the tangible assets have increased as the company borrowed money and invested in
buying the assets. In 2014 the capital work in progress was about 6.23% indicating that the
company’s asset was in construction phase. It increased after that as the construction work
completed.
6.Intangible assets:
 Intangible assets remained very less throughout five years. It is not good sign for company.
7.Long-term loans and advances:
 Long-term loans and advances remained below 2% over last five years. It is a good sign for
company that it has more money for other day today activities.
8.Trade Receivables:
 The trade receivables were high in 2016, about 16.46% and after that decreased to 8.73% by
2018. It is good sign for the company that it has less money blocked with debtors.
9.Inventories:
 Inventories have remained less than 3% over last five years. It is good sign that the company has
less inventory with it.
10.Total Current Assets:
 Total current assets remained almost constant throughout five years. That shows that it
maintained its working capital.
Adani Power
Common Size Statement of P&L account
Income
Total Operating Revenues 100.00 100.00 100.00 100.00 100.00
Other Income 2.34 2.03 0.98 1.17 0.90
Total Revenue 102.34 102.03 100.98 101.17 100.90
EXPENSES
Purchase of Stock-In Trade 1.50 0.95 0.74 1.54 2.09
Cost of Fuel 60.88 64.66 57.68 61.70 58.14
Employee Benefit Expenses 1.72 1.60 1.41 1.70 1.57
Finance Costs 27.03 26.10 23.36 25.84 25.43
Depreciation and 14.07

13.09 11.82 10.44 9.66
Other Expenses 8.29 6.38 5.70 7.65 8.57
Total Expenses 112.51 111.51 99.32 108.09 109.87

Profit/Loss Before
Exceptional, Extraordinary -10.17 -9.65 1.47 -6.80 -8.69
Items and Tax
Exceptional Items 0.00 -18.03 0.00 -0.09 0.00
Profit/Loss Before Tax -10.17 -27.68 1.47 -6.89 -8.69
Tax Expenses-Continued 0.00

0.00 0.00 0.00 0.00
Operations
Current Tax 0.03 0.06 0.00 0.00 0.00
Deferred Tax -0.06 -0.44 -0.69 0.00 -6.84
Total Tax Expenses -0.02 -0.38 -0.69 0.00 -6.84
Profit/Loss After Tax and -1.84

-10.14 -27.30 2.16 -6.89
Before Extraordinary Items
Profit/Loss from -1.84
-10.14 -27.30 2.16 -6.89
Continuing Operations
Profit Loss from 0.00
0.00 0.00 0.00 2.56
Profit/Loss for The Period -10.14 -27.30 2.16 -4.33 -1.84
Analysis of Profit and loss Statement:

1.Other Income:
 Other income remained almost same over the last five years. That means company has not
earned money from sources other than operating.
2.Cost of Fuel:
 Over the last five years the cost of fuel has increased from 58.14% to 61%. Increase in cost of
fuel increased the cost for producing the power and decreased the profit margin.
3.Employee Benefit Expenses:

 Employee benefit expenses of the company have increased from 1.2% to 1.7% indicating the
company’s policy towards the employees.
4.Total Expenses:
 Total expense of the company has been more than the total revenue over the last five years. It
indicates that company is not in the condition and is not able to minimise its costs. It is evident
from the PAT, which is negative for four years.
5.Finance Costs:
 Financial costs increased from 19.46% to 27.03%, that means company has borrowed money.
This increase in cost is attributed to increase in short term borrowings from 9.55% to 20.94%.
The company borrowed more money to run day today activities.
6.Profit After Tax:
 In year 2017 The PAT is lowest in last 5 years and that is attributed to the increase in
exceptional items to 18%.
Adani power Ratio Analysis
A. Profitability Ratio Formulae's 2018-17 2017-16 2016-15 2015-14 2014-13
Gross Profit
1 Gross Profit*100/Sales 39.044 35.50 42.04 37.56 40.48
ratio
Net profit
2 Net profit*100/sales -9.91 -26.80 2.14 -6.81 -1.82
ratio
Return on PAT*100/Avg. Equity
3 14.83 50.89 -5.60 17.90 2.59
equity Fund
Return on
4 PAT*100/Total Assets -3.01 -8.63 0.73 -2.22 0.00
Assets
Return on capital EBIT*100/Avg. Capital

5 9.29 8.95 13.56 9.55 7.21
employed Employed
Asset Turnover
6 Total sales/Total. Assets 30.34 32.21 33.95 32.60 27.16
Ratio
7 Return on Assets PAT/Total Asset -3.01 -8.63 0.73 -2.22 -0.49
B. Liquidity Ratio
Current assets/Current
8 Current Ratio 0.50 0.53 0.62 0.58 0.39
Liability
(Current Assets-Stock-
9 Quick Ratio Prepaid Expenses)/ 0.47 0.46 0.56 0.49 0.32
Current Liability
C Efficiency Ratio
Credit sales/
Debtor Turnover
10 Avg (Debtors and Bills 121.68 102.01 77.66 90.32 85.81
ratio
receivable)
Inventory Turnover
11 COGS*100/Avg. Stock 10.21 9.00 9.70 8.18 7.41
Ratio
Credit Purchase/
Creditors Turnover
12 Avg (Creditors and Bill 199.62 158.34 133.98 144.65 144.17
Ratio
Payable)
D Solvency Ratio
Long term Debt to Long term Debt/ owners
13 45.61 14.20 5.61 6.14 5.12
Equity Ratio fund
14 Debt to Equity Ratio All Liab / Owners fund 45.61 14.20 5.61 6.14 5.12
15 Interest coverage ratio EBIT/Interest 0.69 0.69 1.12 0.80 0.72
E Other Ratio's
16 Proprietor Ratio Proprietor fund/total asset 0.01 0.04 0.10 0.10 0.11
Working Capital Total sales/Working
17 -1.50 -1.90 -2.62 -2.63 -1.43
turnover ratio capital
(Pref Share Capital + Long
term Liab
+Debenture)/Equity
18 Capital Gearing Ratio 14.20 5.61 6.14
Shareholders fund 45.61 5.12
Inventory to Working Closing Stock/
19 -0.062 -0.145 -0.165 -0.225 -0.115
Capital Ratio Working Capital
(COGS + Operating
20 Operating Ratio 0.71 0.72 0.65 0.72 0.70
Expense)/Sales
Operating Net Operating Net Profit/
21 0.29 0.28 0.35 0.28 0.30
Profit Ratio Net sales
Return on Return/
22 -1.50 -1.90 -2.62 -2.63 -1.43
Working Capital Working Capital
Debt Service coverage EBITDA/
23 1.17 1.14 1.57 1.18 1.27
Ratio Total Debt Services
Shareholder’s equity/
24 Equity Ratio 0.02 0.07 0.15 0.14 0.16
Total Capital employed
RATIO ANALYSIS REPORT: ADANI POWER
Profitability Ratio:
1.Gross Profit Ratio:
 It is a popular tool to evaluate the operational performance of the business. In analysis

of ADANI POWER, it is found that GPR is almost same in last five year i.e. 40%.
2.Net Profit Ratio:
 In analysis, it is found that company is in loss, however, the loss has been decreased
from -1,82% to -9.91% in last five years. It means company’s financial health is very
poor.
3.Return on equity:
 It shows the percentage of profit earned on the equity of the company. It has increased
from 2.59% to 14.83%, which is a good sign.
4.Return on Assets:
 It measures the ability of the company to generate profit from its total assets. it has
decreased from 0.01% to -3.01%. It shows that the company is not able to generate
profit from its total asset, which shows inefficiency of the company.
5.Return on capital employed:
 It is used to compare efficiency of capital usage of business within the same industry.
It gives us the percentage of profit earned on capital employed. it has been increased
from 7.21% to 9,29%, this shows that although company is in loss, but, generation
operational profit. Which is good up to certain extent.
6.Asset Turnover Ratio:
 It shows that, by utilizing total asset how much sales company is generating. It has
increased from 27.16% to 30.34% this shows that the company is trying to utilize its
assets effectively.
Liquidity Ratio:
7. Current Ratio:
 It measures the ability of the company to pay current obligations. It is found current
ratio is increased from 0.39 to 0.50. It means company have more current liabilities
than current assets but trying to increase current assets and reduce current liabilities.
8.Quick Ratio:
 It measures the ability of the company to pay current liabilities immediately. It has
decreased from 0.32 to 0.47. it means company is not in position to pay its quick
liabilities but trying to increase current assets and reduce current liabilities.
Efficiency Ratio:
9.Debt Turnover Ratio:
 It measures the ability of the company to make and collect sales. The lesser the DTR,
the earlier we get our payments. It has increased from 85days to 121days. It means
company is getting his dues after long period, which shows inefficiency in collection
policy of the company.
10.Inventory Turnover Ratio:
 It measures the ability of the company to sell its inventory. In general, higher the ratio
the better it is, however, in ADANI, ITR is increased from 7.41 to 10.21, which
shows that the company is not efficient in managing their inventory.
11.Creditors Turnover Ratio:
 It measures the ability of the company to know time period under which, it has to pay
its dues. The higher the CTR, the more time we get. It has increased from 144days to
199days. It means company gets more time to repay, which is good for the company.
Solvency Ratio:
12.Long Term Debt to Equity Ratio:
 It measures the percentage of assets that a business world needs to liquidate to pay off
its long-term debts. Higher ratio indicates higher risk. It has increased from 5.12 to
45.61, alarming situation for the company.
13.Debt to Equity Ratio:
 A high debt-to-equity ratio indicates that a company may not be able to generate
enough cash to satisfy its debt obligations. However, low debt-to-equity ratios may
also indicate that a company is not taking advantage of the increased profits that
financial leverage may bring. It has increased from 5.12 to 45.61, alarming situation
for the company.
.
14.Interest Coverage Ratio:
 It measures the ability to pay interest out of current earning. The Higher the ICR, the
better it is. It has decreased from 0.72 to 0.69, it means company’s ability to pay
interest in little decreased, which is not good.
Other Important Ratio’s:
15.Proprietor Ratio:
 It shows the proportion of total assets of a company which are financed by

proprietors’ funds. As we can see that is has decreased from 11% to 1% which shows
that the company over the period had depends on external factors. Banks check this
ratio before giving loan to measure the financial stability of the company.
16.Working Capital turnover ratio:
 It measures how efficiently a company is using its working capital to support a given
level of sales. In our case it is decreased from -1.43 to --1.50, which is not a good
sign.
17.Capital Gearing Ratio:
 It tells how much fix liability we have to pay. Companies with high CGR will have a
large amount of debt relative to their equity, means more financial risk. In ADANI,
CGR is increased from 5.12 to 45.16, which is not a good sign.
18.Inventory to Working Capital Ratio:
 It measures what proportion of a company’s inventories is financed from its available

cash. It has decreased over period from -0.115 to -0.062.
19.Operating Ratio:
 This ratio used to determine efficiency of a company’s management by comparing

operating expense to net sales. The smaller the ratio, the greater the organization
ability to generate profit. It is almost same in last five years i.e. 0.70.
20.Operating Net Profit Ratio:
 It shows the proportion of operating net profit generated over net sales It is almost
same in last five years i.e. 0.30.
21.Return on Working Capital:
 This ratio is an indicator of working capital performance. It has decreased from -1.43
to – 1.50, which is not a good sign.
22.Debt Service coverage Ratio:
 Lenders are interested in DSCR to judge the firm ability to pay off current interest and
instalment. It has decreased from 1.27 to 1.17.
23.Equity Ratio:
 This ratio indicates proportion of owner’s fund to total fund invested in the business.
A high equity ratio indicates, a high financial strength. It has decreased from 0.16 to
0.02, which is not a good sign.
Comparison of trend analysis
Balance sheet:
The total shareholder’s fund in JSW energy has increased every year after
2014.This shows that JSW energy is performing well and has more return to investment as
compared to Adani Power. Both the companies have shown an increase in long term
liabilities. However, JSW energy is having more long-term liabilities, which shows that it is
more in debt.
Both the companies showed an increase in non-current asset in final year of

assessment. however, JSW Energy has more long-term asset than Adani Power. This shows
that JSW Energy is in better position than Adani. The current assets of Adani have increased
significantly, but current assets of JSW have decreased over a period. This shows that JSW is
managing with less working capital. Finally, when we compare the total assets, JSW has
more total assets compared to base year than Adani.
Profit and Loss Statement:
The total revenue generated by Adani has increased by 32%, during the same
period, the total revenue generated by JSW Energy reduced by 5.58%. Along with it, there is
a trend of increase in rate of revenue generated till 2016 by both the companies. However, the
trend of increase in rate of revenue generation is better in case of Adani groups of company.
All this reflect that Adani group of company is in better position w.r.t revenue generation in
these five years of assessment. Both the companies increased their expense in 2016 to
generate more revenue, but rate of expenses incurred was more by Adani and hence it
generated more revenues. When we compare the Profit of both the companies, Adani Power
incurred huge losses in all the years except in 2016, whereas JSW is in profit in all the years.
Comparison of Common size Statement
Balance sheet:
When we compare the balance sheets of JSW Energy and Adani Power, Percentage of Total
shareholder’s fund of JSW Energy is higher as compared to Adani Power. Higher
Shareholder’s fund means higher share of owner in total liabilities and is a good for company.
Non-current liabilities of JSW Energy has decreased over a period, whereas of Adani Power’s
has increased by 10%. That means Adani Power owes more to the borrowers and is not a
good sign. Current liabilities of JSW Energy is very less as compared to Adani Power
indicating that JSW Energy owes very less to the outsiders.
Secondly, intangible asset of JSW has increased over period but the Adani’s remained same,
that too very less. Intangible asset such as goodwill is must for the company to operate in the
market. Trade receivables of JSW decreased over a period, whereas Adani’s Trade receivable
increased. That means Adani power has more money to receive from outsiders.
Profit and Loss Account:

When we compare the P&L account of both the companies, Adani Power is in loss over the
last five years whereas JSW remained in profit in all the years. Even though cost of fuel for
both the companies has increased in same proportion, Adani power has not been able to
maintain its total expenses in check over a period. Finance costs of the Adani Power is more
as compared to the JSW, indicating that the Adani Power paid more towards the interest for
the borrowings. JSW Energy earned part of its revenue from other income and increased over
a period but Adani’s other income remained almost same.
Comparison of Ratio Analysis
Profitability Ratios
The Gross Profit Ratio of JSW energy is 50% while it is 40% in Adani power.
The current Net Profit Ratio of JSW Energy is 1% while Adani Power is in loss of (9.92%).
The current Return on Equity of JSW Energy is 0.76% while it is 14.83% in Adani Power.
The current Return on Assets of JSW Energy is 0.310% while it is negative in Adani Power
i.e. (3.01%).
The current Return on Capital Employed of JSW Energy is 1.54% while it is 9.29% in Adani
Power.
The current Assets Turnover Ratio of JSW Energy is 30.82% while it is 30.34% in Adani
Power.
Liquidity Ratios
The latest Current Ratio of JSW Energy and Adani Power is almost same i.e.0.50.
The current Quick Ratio of JSW Energy is 0.38 while it is 0.47 in Adani Power.
Efficiency Ratio
The current Debt Turnover days of JSW Energy is 189 days while it is 121days in Adani
Power.
The current Credit Turnover days of JSW Energy is 407 days while it is 199 days in Adani
Power.
The current Inventory Turnover Ratio of JSW Energy is 9.19 while it is 10.21 in Adani
Power.
Solvency Ratio
The current Long-Term Debt to Equity Ratio of JSW Energy is 0.97 while it is 45.61 in
Adani Power.
The current Debt to Equity Ratio of JSW Energy is 0.39 while it is 45.61 in Adani Power.
The current Interest Coverage Ratio of JSW Energy is while it is 0.69 in Adani Power.
Other Important Ratios

The current Proprietor Ratio of JSW Energy is 41% while it is 01% in Adani Power.
The Working Capital Turnover Ratio of JSW Energy is (3.82) while it is (1.50) in Adani
Power.
The current Capital Gearing Ratio of JSW Energy is 0.974 while it is 45.16 in Adani Power.
The Working Capital Turnover Ratio of JSW Energy is (0.20) while it is (0.062) in Adani
Power.
The current Proprietor Ratio of JSW Energy is 0.52 while it is 0.70 in Adani Power.
The current Operating Net Profit Ratio of JSW Energy is 0.04 while it is 0.30 in Adani
Power.
The current Return on Working Capital Ratio of JSW Energy is (0.038) while it is (1.50) in
Adani Power.
The current Debt Service Coverage Ratio of JSW Energy is 0.01 while it is 1.17 in Adani
Power.
The current Equity Ratio of JSW Energy is 0.51 while it is 0.02 in Adani Power.
Conclusion:
In aforesaid pages we have carried out the detailed financial analysis of giants in Power
sector I.e. JSW Energy and Adani Power. In order to analyse the financial position of the
firms we carried out ratio analysis, Common size Statement, Trend analysis. The conclusion
of the analysis is as follows.
When we analysed the profitability, Liquidity and efficiency ratios of both the companies,
JSW Energy has upper hand, whereas solvency ratio of Adani Power is higher. It clearly
shows that financial health of JSW Energy is comparatively better. We also analysed other
important ratios such as Proprietor ratio, operating net profit ratio, equity ratio and found that
JSW Energy in dominance. When the trend analysis of Income statement has been carried
out, JSW Energy has maintained its overall position stable whereas Adani has Expanded
more but has not been able to maintain its profit margin.
Finally, we can say that JSW Energy is financially in better position as compared to Adani
Power.
Suggestions:
Over a period of 5 years, even though both the companies expanded their business, Adani
Power has not been able to minimise its expenses. Its finance costs and cost of fuel are high
as compared to JSW Energy. In order to reduce the expenses Adani must look for permeant
source for the fuel. It should also try to maximise its revenue by utilising its assets properly in
order offset the finance cost, incurring against long-term and short-term liabilities.
Even though it is making profits, JSW Energy must minimise its expenses as the profit
margin has been decreasing. Its expenses also increased over a period of 5 years and are
attributed to increased fuel costs. It should also look for permanent source for fuel. It should
also give more importance to the joint ventures as loss from JVs also decreased its profit
margin.

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Financial Analysis

Submitted by: Group 6

1|Page JSW VS Adani

2|Page JSW VS Adani

3|Page JSW VS Adani

Tax Expenses-Continued Operations

4|Page JSW VS Adani

Equities and Liabilities

5|Page JSW VS Adani

Total Revenue 21,093.43 23,034.47 25,733.75 19,065.14 15,954.40

Total Expenses 23,188.76 25,217.95 25,359.03 20,346.08 17,323.94

Deferred Tax -12.03 -98.57 -175.78 0 -1,078.99

Total Tax Expenses -5.15 -86.07 -176.08 0 -1,078.99

6|Page JSW VS Adani

Mar-18 Mar-17 Mar-16 Mar-15 Mar-14

7|Page JSW VS Adani

2.Total non-current liabilities

3.Total current liabilities

4.Total non-current asset

5.Total Current asset

8|Page JSW VS Adani

Profit/Loss Before Exceptional,

Profit of the year 100

9|Page JSW VS Adani

3. Profit &loss per year

4.Revenue from operations(gross) –

5.Total operating revenues –

Revenue from Operations 100.00 100.00 100.00 100.00 100.00

Tax Expenses-Continued Operations

Proprietor Proprietor fund/total

Ratio analysis report of JSW Energy

1.Gross Profit Ratio:

 It is a popular tool to evaluate the operational performance of the business. In analysis

5.Return on capital employed:

6.Asset Turnover Ratio:

9.Debt Turnover Ratio:

10.Inventory Turnover Ratio:

11.Creditors Turnover Ratio:

12.Long Term Debt to Equity Ratio:

13.Debt to Equity Ratio:

14.Interest Coverage Ratio:

 It shows the proportion of total assets of a company which are financed by

16.Working Capital turnover ratio:

17.Capital Gearing Ratio:

18.Inventory to Working Capital Ratio:

 It measures what proportion of a company’s inventories is financed from its available

1.Total shareholders fund

2.Total non-current liabilities

3.Total current liabilities

4.Total non-current asset

5.Total Current asset

Adani Profit and Loss Account

3. Profit and loss per year:

4.Revenue from operations(gross):

5.Total operating revenues:

2. Other Long-Term Borrowings:

Other Income 2.34 2.03 0.98 1.17 0.90

Total Revenue 102.34 102.03 100.98 101.17 100.90

Cost of Fuel 60.88 64.66 57.68 61.70 58.14

Employee Benefit Expenses 1.72 1.60 1.41 1.70 1.57

Finance Costs 27.03 26.10 23.36 25.84 25.43

Depreciation and 14.07

Total Expenses 112.51 111.51 99.32 108.09 109.87