Академический Документы
Профессиональный Документы
Культура Документы
Increase in current ratio from 2007 to 2008 is due to-short term investment (trading investment 20 lakhs and 4.8 crores) bharti airtel.xlsx
Bharti Enterprises
2. Quick Ratio or Acid Test Ratio= (Total current assets- InventoryPrepaid expenses)/ Total current liabilities
Airtel Idea
2006 2007 2008 0.2664 0.2723 0.5601 0.3425 0.95 0.285
Increase in quick ratio from 2007 to 2008 is due to short term investment bharti airtel.xlsx
Bharti Enterprises
3. Super Quick Ratio= (Total current assets- Inventory- Prepaid expensesBills receivable)/ Total current liabilties
2006 2007 2008 0.0847 0.1036 0.3781 0.2252 0.8808 0.2092
Airtel Idea
4. Cash flow from operations Ratio= Cash flow from operations/ Current liabilties
2006 2007 2008 0.6196 0.6694 0.3700 1.0627 0.7459 0.9531
Airtel Idea
Decrease in ratio from 2007 to 2008 is due to Increase in short term investment on account of negative cash flow from operations Unbilled receivables have increased. bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
Reason for decrease in ratio from 2006 to 2007 is due to Increase in retained earnings bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
Bharti Enterprises
Increase in proprietory ratio from 2006 to 2007 is due to the increase in retained earning by more than 200% in 2007 while Total assets increased by just 38% bharti airtel.xlsx
Airtel Idea
Increase in coverage ratio from 2006 to 2007 is due to increase in EBIT by 81% while interest expense was almost constant From 2007 to 2008 is due to increase in EBIT by 55% and interest expense increased by 33% bharti airtel.xlsx Bharti Enterprises
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
Increase in operating profit ratio is due to-Year on Year increase in EBIT was more than Net Sales bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
Increase in pre-tax profit ratio is due toYear on Year increase in EBT was more than Net Sales bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
14. Returns on Assets (ROA)= 100 x (Net Profit after Tax+ Interest)/ Average total Assets
2006 2007 2008 11.74% 15.31% 15.03% 5.55% 7.47% 10.47%
Airtel Idea
Increase in ROA in 2007 is on account of increase in Net profit by 91% whereas assets increased by 36% bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
Increase in 2007 ROCE is due to increase in EBIT by approximately 90% whereas Total capital employed increased by approximately 50% only bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
Decrease in Equity multiplier in 2007 is due to increase in total assets by 36% and increase in shareholders equity by 46%.
Bharti Enterprises
Airtel Idea
Increase in ROE in 2007 is due to 91% increase in PAT while shareholders equity has increased by 46% bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
COGS has increased in 2007 at a greater rate as compared to Total assets. bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
2006
2007
2008
Airtel Idea
bharti airtel.xlsx
Bharti Enterprises
Du Pont Analysis
The return on investment (ROI) ratio is used to evaluate how effectively assets are used. It measures the combined effects of profit margins and asset turnover. ROI = NET INCOME = NET INCOME * SALES . TOTAL ASSETS SALES TOTAL ASSETS
(PROFIT MARGIN) (ASSET TURNOVER)
The return on equity (ROE) ratio is a measure of the rate of return to stockholders. Decomposing the ROE into various factors influencing company performance is often called the Du Pont system
ROE = NET INCOME = NET INCOME * SALES * TOTAL ASSETS EQUITY SALES TOTAL ASSETS EQUITY
(Profit margin) (Asset Turnover) (Equity Multiplier)
Bharti Enterprises
Bharti Airtel
ROI ROE Profit Margin Asset Turnover Equity Multiplier
2005-06 2006-07
2007-08
0.0258 0.0432
0.0599
0.0608 0.0894
0.1304
0.1941 0.2298
0.2479
0.1331 0.1884
0.2415
2.3567 2.0648
2.1776
Idea Cellular
ROI 2005-06 2006-07 0.0273 0.0532 ROE 0.0437 0.0980 Profit Margin 0.062 0.104 Asset Turnover 0.440 0.512 Equity Multiplier 1.601 1.850
2007-08
0.0085
0.0208
0.155
0.550
2.450
Bharti Enterprises
Bharti Airtel
3
Idea Cellular
2.5
2.5
2 Equity Multiplier
Profit Margin
0.5
0.5
Bharti Enterprises
Cost of Debt, Kd
Kd = I (1-t) = 6.79 * ( 1 - 0.11) = 6.04 %
Bharti Enterprises
Cost of Capital
Kc = Ke*We + Kd*Wd + Kp*Wp + Kr*Wr = Ke* (We + Wr) + Kd*Wd
( since, Wp = 0; Ke = Kr)
Bharti Enterprises
Leverage
Fixed operational costs:
Selling, general and administrative costs
Bharti Enterprises
19,145,884
27,605,729
28,564,086
49,299,652 1.58
40,581,856
76,455,506 1.53
Bharti Enterprises
EBIT-Interest
24,647,690
46,255,400
1.06
72,401,807
1.06
Bharti Enterprises
2007 1.67
2008 1.62
Bharti Enterprises
Projections: 2009-2013
Assumptions: Considering the nature of the industry, sales growth had been tapered off for the projections There are two cash outlays during the years 2008 and 2011
Bharti Enterprises