Академический Документы
Профессиональный Документы
Культура Документы
Closing Price
350
300
250
200
150
100
50
0
4/1/2014
5/1/2014
6/1/2014
7/1/2014
8/1/2014
9/1/2014
10/1/2014
11/1/2014
12/1/2014
1/1/2015
2/1/2015
3/1/2015
4/1/2015
5/1/2015
6/1/2015
7/1/2015
8/1/2015
9/1/2015
10/1/2015
11/1/2015
12/1/2015
There has not been a very sharp or major drop in the Share Price of the company. Its prices have been
pretty consistent because of the demand. We know Voltas is one powerful company when it comes to
specializing in air conditioning and cooling technology. Whenever there has been a slight drop, the
company has come up with new products or innovations in their existing products and picked up their
pace in the growth stage that results in the increase of the share price.
Voltas has made many initiatives and spent sufficient amount for the development of the community,
people and education. However, with respect to initiatives that increase their revenue, they have restricted
themselves with very few initiatives that as listed as follows: -
1.Voltas has made various initiatives on Commercial Refrigeration products and has generated numerous
positive results with the addition of new customers as well as fresh business from existing customers. The
advantage of using commercial refrigeration is that it has longer life expectancy which is around 10years.
It also reduces energy by the use of commercial refrigeration. For example- If the fridge has a problem,
such as a broken part preventing it from cooling efficiently, then it will use even more energy — which will
drive up your bills significantly. By scheduling regular commercial refrigeration maintenance, you can be
sure that the system is working efficiently and isn’t compromised by a problem that’s forcing it to work
too hard.
2. The focus of IOBG has been on the effective execution of on-going projects together with settlement
and financial closure of older projects. (2017-18)
3. They has been a constantly improvement in margins and savings in costs by introduction of timely
business efficiency improvement programs.
List of New Products
1) Convertible Freezer, Freezer on Wheels and Curved Glass Freezer (2018-19)
2) Newer models of Water Dispensers and Water Coolers. (2018-19)
3) Combo coolers (chest freezer cum cooler) (2016-17)
Q.3. Major strategies of the management for sustainable business processes during last five years.
1. Voltas has actively contributed in various forums, for instance “INDIA-US task force for ODP and
GWP substances” organized by MoEF for HCFC phase out and understanding next generation
environment friendly refrigerants. ODP stands for Ozone depletion potential and GWP stands for
global warming potential. Being a part of these projects Voltas is ensuring that it does it part
towards the sustainable development motto of the world.
2. It has also taken part in countless initiatives of BIS for updating and formulating standards related
to Refrigeration and Air Conditioning.
3. Voltas is working with RAMA for providing inputs to BEE in developing Energy Conservation
Building. The company’s unitary cooling products (UCP) segment, which represents ACs, staged
the best performance in nine years. Revenue growth of 47% year-on-year was way beyond analysts’
expectations of 15-20% for the quarter. What worked in its favor, like it did for other AC makers,
is the heat wave and the subsequent delayed monsoon. In spite of stiff competition, Voltas’ edge
has been its strong presence in room ACs and battery of new products/variants to combat
competition. Room AC sales grew by 36% year-on-year, where it maintained its leadership for the
eighth consecutive year.
4. Voltas ’organizational goals that is their mission also states the importance of minimizing wasteful
energy in their branded products. Voltas’ also strongly believe in making alliance with global
technological partners who also follow a green path.
Q.4. Comparative analysis of the following financial performance
1. Return on assets is a profitability ratio that provides how much profit a company is able to generate from
its assets. ROA is pretty consistent over the years.
2. Dividend per share (DPS) is the sum of declared dividends issued by a company for every
ordinary share outstanding. Dividend per share has been increasing over the years maybe because of the
increase in demand because of the products.
3. Net profit represents the number of sales dollars remaining after all operating expenses,
interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a
company's total revenue. Net Profit has been increasing over the last five years.
4. Return on Equity has been decreasing over the last five years.
5. The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or
those due within one year. The quick ratio is an indicator of a company’s short-term liquidity position and
measures a company’s ability to meet its short-term obligations with its most liquid assets.
Both current and liquidity ratio has first decreased and then increased.
6. The dividend payout ratio is the ratio of the total amount of dividends paid out to shareholders relative
to the net income of the company. DPR has increased over the past five years.
7.EBIT is a measure of a firm's profit that includes all incomes and expenses (operating and non-operating)
except interest expenses and income tax expenses. EBIT for Voltas has been consistent till 2017 and then
increased.
8. Earnings per share is a company's profit divided by the number of common stock shares it has
outstanding. There has been a drop in EPS over the last two years.
9. The interest coverage ratio is a debt ratio and profitability ratio used to determine how easily a company
can pay interest on its outstanding debt. There has been a drop in the ICR
10. P/E ratio is the ratio for valuing a company that measures its current share price relative to its per-share
earnings (EPS). The P/E for the company has been increasing which could imply that the company has been
making profits.
11. Debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its shareholder
equity. There has been a drop in the debt equity ratio.
12. Net sales has been increasing over the past five years.
Year Dividend /
Share(Rs.) Dividend / Share(Rs.)
4.5
4
3.5
3
Mar-19 4
2.5
Mar-18 4
2
Mar-17 3.5
1.5
Mar-16 2.6
1
Mar-15 2.25
0.5
0
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Net
Profit/Share Net Profit/Share (Rs.)
(Rs.) 16
14
Mar- 14.04
19 12
Mar- 15.15 10
18 8
Mar- 14.7 6
17
4
Mar- 10.06
16 2
Mar- 9.95 0
15 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Return on
Networth Return on Networth / Equity (%)
/ Equity 20
(%) 18
Mar-19 12.4 16
14
Mar-18 14.26 12
Mar-17 16.28 10
8
Mar-16 16.01 6
4
Mar-15 17.89 2
0
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Current
Ratio (X) Current Ratio (X)
1.8
1.6
1.4
1.2
Mar-19 1.63 1
1.3 0.8
Mar-18
0.6
Mar-17 1.21 0.4
1.35 0.2
Mar-16
0
Mar-15 1.34 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Quick
Ratio (X)
Year EV/EBITDA
(X) EV/EBITDA (X)
35
30
Mar- 32 25
19
Mar- 28.53 20
18 15
Mar- 19.7
17 10
Mar- 19.77 5
16
0
Mar- 20.14
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
15
Year Earnings
per share Earnings per share
20
18
16
14
Mar-19 15.5 12
10
Mar-18 17.5 8
6
Mar-17 15.7 4
Mar-16 11.9 2
0
Mar-15 11.6 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Interest
Coverage Interest Coverage Ratios (%)
Ratios (%) 80
70
60
Mar-19 23.47 50
Mar-18 68.16 40
30
Mar-17 47.04
20
Mar-16 34.39 10
Mar-15 21.1 0
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Mar-18 30.8 30
Mar-17 22 20
Mar-16 24 10
Mar-15 19.4 0
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Debt
Equity Ratio Debt Equity Ratio
0.07
0.02 0.04
Mar-17
0.03
Mar-16 0.06
0.02
Mar-15 0.03
0.01
0
Jan-15 Jan-16 Jan-17 Jan-18 Jan-19
Year Net Sales
Turnover Net Sales Turnover
8000
7000
Mar'19 6693.19 6000
Mar'18 5808.77 5000
Mar'17 5410.36 4000
3000
Mar'16 5148.77
2000
Mar'15 5168.95 1000
0
Mar'19 Mar'18 Mar'17 Mar'16 Mar'15
Name Closing Price Market Cap. Sales Net Profit Total Assets
(Rs. cr.) Turnover
From the given table, we can see that Voltas is doing pretty great in comparison to its competitors. Though
it has a lower closing price in comparison to its competitors, the market capitalization which is the current
market price multiplied by the shares outstanding is much higher than the others.
The Sales turnover for Voltas is also higher which indicates that the product is doing good in the market
and has a consistent demand which in turn is generating such high revenue.
LEEL did make a lead in the section for Net Profit and that’s the only section Voltas is lagging behind.
Q.6. Depreciation followed by Voltas and its percentage
Year Depreciation % Depreciation Method Change
2014-2015 22.45 Straight Line Method -
2015-2016 19.10 Straight Line Method -
2016-2017 18.12 Straight Line Method -
2017-2018 19.23 Straight Line Method -
2018-2019 19.71 Straight Line Method -
Straight Line Method has been followed for both property, plant and equipment and also on the tangible
fixed assets of the Group’s foreign subsidiaries as per the estimated useful life of such assets as follows: -
- Buildings - 6 to 10 years
- Plant and Equipment - 3 to 10 years
- Office and EDP Equipment - 3 to 6 years
- Furniture and fixtures - 3 to 7 years
- Vehicles - 3 to 5 years
- Porta Cabins - 1 to 10 years
Reference- Annual Report, CSR section.
The Training Initiatives are in partnership with some of the most reputed organizations like Tata Strive,
GMRV, ICICI Foundation, Bosco Boyz and JCTS and ensures identification and mobilization of deserving
candidates from the lower socio-economic strata, provision of well-equipped training infrastructure, roll
out of quality training, assessments, certification and job placement. Between 2008 and 2018 we have
trained over 9000 youth. Skill Training Areas - Technical domain knowledge, Life Skill Education
Certification, On the Job training
Soft Skills - Safety Awareness, Focus on customer care, Ethics & Values
The interventions taken up under Community Development, have emerged out of a rigorous community
needs assessment exercise. The community development initiative deals with the issues of Water &
Sanitation, Health, Education and Employability Enhancement across 4 locations of Voltas.
These initiatives have been designed to address the issues in the neighborhood communities of Voltas
manufacturing plants and HQ, in the radius of 15 kms. Voltas manages community development projects
in the vicinity of four of our plant location. These are at Dadra, Mumbai, Thane & Pantnagar. Project areas
include improved agriculture, the institution of quality libraries, technical education, and non-technical
skills training for women.
Reference – Annual reports
Q.9. N.A.
Q.10. Securities Issued
2016-17 Authorized
Issued, Subscribed and Paid up
Term loans from Banks
Working Capital loans from Banks
https://www.icra.in/Rationale/ShowRationaleReport/?Id=79100
Debt ratio is a solvency ratio that measures a firm’s total liabilities as a percentage of its total assets. In a
sense, the debt ratio shows a company’s ability to pay off its liabilities with its assets. In other words, this
shows how many assets the company must sell in order to pay off all of its liabilities.
A lower debt ratio usually implies a more stable business with the potential of longevity because a company
with lower ratio also has lower overall debt. Each industry has its own benchmarks for debt, but .5 is
reasonable ratio.
A debt ratio of .5 is often considered to be less risky. This means that the company has twice as many assets
as liabilities. Or said a different way, this company’s liabilities are only 50 percent of its total assets.
Essentially, only its creditors own half of the company’s assets and the shareholders own the remainder of
the assets.
The D/E ratio is an important metric used in corporate finance. It is a measure of the degree to which a
company is financing its operations through debt versus wholly-owned funds. More specifically, it reflects
the ability of shareholder equity to cover all outstanding debts in the event of a business downturn.
Reference- https://www.myaccountingcourse.com/financial-ratios/debt-ratio
- https://www.investopedia.com/terms/d/debtequityratio.asp
Q.12. Voltas has issued IFRS 2 (‘Share-based payment,’) in India but it is not yet effective as of now.
Moreover, Voltas’ foreign subsidiaries follow IFRS that were effective from the given dates of adoption-
IFRS 15: Revenue from Contracts with Customers
(1st January, 2018) l IFRS 9: Financial Instruments
(1st January, 2018) l IFRS 16: Leases (1st January, 2019)
Reference – Annual Reports
Q.13. Altman’s Z score model
Year FY19 FY18 FY17 FY16 FY15
Working 964 439 433.73 360.92 508.39
Capital
[Civil Appeal No. 2073 of 2014 arising out of SLP (Civil) No. 30015 of 2013]
[Civil Appeal No. 2076 of 2014 arising out of SLP (Civil) No. 31195 of 2013]
Voltas have been in the light regarding a major case that wasn’t related to a financial fraud
1. Haier advertisement case: Delhi High Court interim order favors Voltas
Reference - https://indiankanoon.org/doc/55791179/
- https://m.economictimes.com/industry/cons-products/durables/haier-
advertisement-case-delhi-high-court-interim-order-favours-
voltas/articleshow/64420734.cms
Q.16. N.A.