410-930-VA Section 7001 Accounting II Take-Home

Assignment
Property, Plant & Equipment and Current Liabilities

Medha Sharma
2001139
HT Media Limited

HT Media is a mass media company incorporated in Delhi, India. It has holdings in print, digital and electronic

media. It operates 19 printing facilities in India with a combined capacity of 1.5 million copies per hour. The

HT Media newspaper started in 1924 and reborn as Hindustan Times in 1927 as an incorporated company.

Apart from the English newspaper, they also publish a Hindi daily, and a literary and children’s’ magazine.

 Does the company possess an amount of Property, Plant and Equipment which is similar to that of

other companies within its industry?

(INR in Millions)
Land - Leasehold land - Improvement to Plant & Office Furniture &
Particulars Buildings Vehicles Total
Freehold Freehold Leasehold premises Machinery Equipments Fixtures
Gross Block 98 520 1,157 580 5,707 224 181 46 8,512
Depreciation - 21 200 283 2,283 145 73 23 3,028
Net Block
As at March 31, 2019 98 499 957 297 3,424 78 107 24 5,484
As at March 31, 2018 98 255 913 355 3,508 95 124 33 5,381
Note from Annual report of HT media for the year ending March 31, 2019

HT Media Limited holds PPE worth of INR 5,484 Millions against Total Revenue of INR 2,436 Millions i.e.

Fixed Asset Turnover (FAT) of 4.5 times while Dainik Bhaskar (Biggest competitor of HT Media in similar

lines of business viz. Newspaper, Radio and Digital News) holds Fixed Assets of INR 8,060 Millions against a

revenue of INR 2,479 Millions i.e. Fixed Asset Turnover ratio (FAT) of 3.1 times. Other Similar Media

companies in India holds an average FAT of 3.5 - 4 times. This clearly reflects the adequacy of HT Media’s

PPE and their ability to convert its assets into higher revenue.

Accordingly, In my opinion HT Media Limited possess healthy amount of Property, Plant and Equipment and is

better off than other companies within the same industry with respect to generating revenue from the PPE.
 In your opinion, is the company at risk because it has too many current liabilities?

(INR in Millions)
Particulars As at March 31, 2019 As at March 31, 2018
a) Inventories 1,632 1,255
b) Financial Assets 20,133 13,029
c) Contract Assets 22 -
d) Other Current Assets 820 768
Total Current Assets 22,606 15,051
a) Financial liabilities 16,399 18,808
b) Other current liabilities 411 1,122
c) Contract liabilities 995 -
d) Provisions 72 78
e) Income tax liability 40 249
Total Current Liabilities 17,918 20,258
Note from Annual report of HT media for the year ending March 31, 2019

HT Media has sufficient current assets (INR 22,606 Millions) to fund for its current liabilities (INR 17,917

Millions) which can be clearly judged from their Current ratio (Current Assets / Current Liabilities) which is 1.3

times for the Financial year ending 31 Mar 2019. This has improved by 0.6 times from the Previous year ending

31 Mar 2018. It is important to highlight that most of the Current Assets of the company are highly liquid i.e

low risk liquid Investments and Cash while majority of the current liabilities include short term borrowings

(Company’s strategy for arbitrage gain by investing own cash in long term securities and borrowing funds at

lower cost from the market).

However, similar ratio for other Media companies with the similar line of business are 2.7 times for Dainik

Jagran and 4 times for Dainik Bhaskar.

In my opinion, HT Media is not at risk since it has higher current assets and enough cash surplus to trade off

short term loans categories under current liabilities.

 Do you consider the finances of this company to be well managed? Why?

HT Media has Net worth of INR 28,321 Million (Total Assets – Total Liabilities) and Debt Equity ratio (Long

term Debt / (Long term Equity +Long term Debt)) of 0.11 which is a sign of healthy financial strength.

Company also holds healthy adequate Cash surplus to the tune of INR 16,000 Million which is invested in low

risk liquid investments

Accordingly, In my opinion Finances of the company are well managed with very low risk of default.

Bibliography

 Annual Report of HT Media for the year ended March 31, 2019 - http://www.htmedia.in/wp-

content/uploads/2019/08/HTML_AR_2018-19.pdf

 Annual Report of DB Corp Limited (Dainik Bhaskar) for the year ended March 31, 2019 -

https://storage.googleapis.com/webimages.dbcorp.in/investor/Annual%20Report%20FY%202018-19.pdf

 Annual Report of Dainik Jagran for the year ended March 31, 2019 -

https://jplcorp.in/new/pdf/Annual_Report_2018-2019.pdf