Bajaj Auto Financial Analysis

Presented by:
KAUSTAV BORDOLOI MANSI KESRI MAYANK GUPTA MEGAH SHARMA MOHIT NISCHAL

BALANCE SHEET OF BAJAJ AUTO

Mar '11 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress 289.37 289.37 0 0 4,620.85 0 4,910.22 23.53 301.62 325.15 5,235.37 3,395.16 1,912.45 Mar '10 144.68 144.68 0 0 2,783.66 0 2,928.34 12.98 1,325.60 1,338.58 4,266.92 3,379.25 1,899.66 Mar '09 144.68 144.68 0 0 1,725.01 0 1,869.69 0 1,570.00 1,570.00 3,439.69 3,350.20 1,807.91 Mar '08 144.68 144.68 0 0 1,442.91 0 1,587.59 6.95 1,327.39 1,334.34 2,921.93 2,994.68 1,726.07 Mar '07 101.18 101.18 0 0 5,433.14 0 5,534.32 22.46 1,602.97 1,625.43 7,159.75 3,178.54 1,904.94

1,482.71 149.34

1,479.59 120.84

1,542.29 106.48

1,268.61 34.74

1,273.60 107.62

Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

4,795.20 547.28 362.76 155.45 1,065.49 3,891.66 401.04 5,358.19 0 2,624.35 3,925.72 6,550.07 -1,191.88 0 5,235.37 959.66 169.69

4,021.52 446.21 272.84 100.2 819.25 2,291.29 1.21 3,111.75 0 2,218.06 2,248.72 4,466.78 -1,355.03 0 4,266.92 818.25 202.4

1,808.52 338.84 358.65 135.68 833.17 1,567.09 1.19 2,401.45 0 1,378.20 1,224.15 2,602.35 -200.9 183.3 3,439.69 924.96 129.23

1,857.14 349.61 275.31 54.74 679.66 1,099.68 1.33 1,780.67 0 1,185.19 834.04 2,019.23 -238.56 0 2,921.93 1,129.29 109.73

6,447.53 309.7 529.83 62.16 901.69 2,925.24 21.32 3,848.25 0 1,683.46 2,833.79 4,517.25 -669 0 7,159.75 811.66 546.96

PROFIT AND LOSS ACCOUNT

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07
17,386.51 934.71 16,451.80 1,176.00 82.79 17,710.59 12,420.95 607.7 11,813.25 22.5 47.6 11,883.35 9,310.24 610.07 8,700.17 -6.2 -24.49 8,669.48 9,856.66 1,029.51 8,827.15 170.27 67.85 9,065.27 10,741.91 1,321.67 9,420.24 567.16 -0.9 9,986.50

Income

Sales Turnover

Excise Duty

Net Sales

Other Income

Stock Adjustments

Total Income

Expenditure 11,965.30 86.61 494.33 61.77 450.18 8,187.11 70.35 411.76 57.54 407.61 221.94 -15.67 6,502.10 60.89 366.67 57.08 381.73 225.56 -14.42 6,760.04 69.2 350.09 53.72 390.15 209.63 -23.04 6,969.50 79.34 310.07 74.53 457.17 230.89 -32.05

Raw Materials

Power & Fuel Cost

Employee Cost Other Manufacturing Expenses Selling and Admin Expenses

Miscellaneous Expenses 237.76 Preoperative Exp Capitalised -16.66

Total Expenses

13,279.29
3,255.30

9,340.64
2,520.21

7,579.61
1,096.07

7,809.79
1,085.21

8,089.45
1,329.89

Operating Profit

PBDIT Interest PBDT Depreciation

4,431.30 1.69 4,429.61 122.84

2,542.71 5.98 2,536.73 136.45

1,089.87 21.01 1,068.86 129.79

1,255.48 5.16 1,250.32 173.96

1,897.05 5.34 1,891.71 190.26

Other Written Off

Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend

0
4,306.77 46.77

0
2,400.28 26.87

0
939.07 18.72

1.12
1,075.24 59.32

0.39
1,701.06 26.6

4,353.54 1,011.02 3,339.73 1,313.99 0 1,157.47

2,427.15 710.12 1,702.73 1,153.53 0 578.73 96.12

957.79 301.61 656.48 1,077.51 0 318.3 54.1

1,134.56 378.78 755.95 1,049.75 0 289.37 49.18

1,727.66 490.09 1,237.96 1,119.95 0 404.73 68.78

Corporate Dividend Tax 187.77 Per share data (annualized) Shares in issue (lakhs) 2,893.67

1,446.84 117.69 400 202.4

1,446.84 45.37 220 129.23

1,446.84 52.25 200 109.73

1,011.84 122.35 400 546.9

Earnings Per Share (Rs) 115.42 Equity Dividend (%) Book Value (Rs) 400 169.69

RATIO ANALYSIS
Mar, 11 Mar , 10 Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin (%) Profit Before Interest And Tax Margin (%) Gross Profit Margin (%) Cash Profit Margin (%) Adjusted Cash Margin (%) Net Profit Margin (%) Adjusted Net Profit Margin (%) Return On Capital Employed (%) Return On Net Worth (%) Adjusted Return on Net Worth (%) Return on Assets Excluding Revaluations Return on Assets Including Revaluations Return on Long Term Funds (%) 19.76 18.56 19.02 15.7 15.7 19.8 19.8 67.57 68.01 51.42 169.69 169.69 69.67 21.19 19.78 20.03 16.2 16.2 14.23 14.23 59.01 58.14 61.53 202.4 202.4 59.19 10 40 112.4 568.54 158.97 89.45 10 40 173.02 816.49 190.09 78.91

Mar , 09 10 22 75.64 601.32 106.56 78.91 12.57 10.88 11.08 10.55 10.55 7.4 7.4 32.8 38.92 47.78 116.56 116.56 35.36

Mar , 08 10 20 75.01 610.1 99.73 78.91 12.29 10.03 10.32 10.48 10.48 8.32 8.32 39.71 47.61 48.91 109.73 109.73 39.71

Mar , 07 10 40 131.39 931.01 535.16 112.84 14.11 11.65 12.09 12.18 12.18 12.66 12.66 20.9 22.36 18.09 546.96 546.96 20.97

Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio Average Raw Material Holding Average Finished Goods Held Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition Imported Composition of Raw Materials Consumed Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio Adjusted Cash Flow Times Earnings Per Share Book Value

0.8 0.71 0.07 0.03 2,093.39 0.07 2,166.08 2,049.86 32.8 51.77 32.8 4.85 3.14 4.85 5.58 9.15 -26.08 72.72 4.06 2.45 27.74 40.27 38.85 46.73 49.2 0.12 115.42 169.69

0.69 0.55 0.46 0.45 421.06 0.46 443.88 308.56 28.87 37.41 28.87 3.5 2.77 3.5 7.91 9.13 -41.29 69.3 3.59 3.23 27.67 39.63 36.69 62.55 65.19 0.69 117.69 202.4

0.84 0.73 0.84 0.71 53.71 0.84 59.89 38.42 28.64 27.45 28.64 2.6 2.53 2.6 6.39 9.97 -8.31 74.73 2.35 3.97 30.82 56.72 47.36 53.79 60.2 1.68 45.37 129.23

0.88 0.64 0.84 0.84 224.91 0.84 258.84 181.43 29.33 21.93 29.33 2.95 3.02 2.95 5.24 10.73 -9.73 76.58 2.37 3.98 23.53 44.78 36.36 56.41 64.43 1.4 52.25 109.73

0.84 0.76 0.29 0.29 280.28 0.29 315.98 268.53 36.88 22.66 36.88 2.96 1.32 2.96 5.08 8.14 -25.57 73.98 5.56 4.45 18.36 38.24 33.14 52.71 60.28 1.36 122.35 546.96

Current Ratio
Definition: Current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also known as "working capital ratio". It is a measure of general liquidity and is most widely used to make the analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current assets by total of the current liabilities. Formula:
Current Ratio = Current Assets / Current Liabilities Current Assets : Current Liabilities

Current Ratio
1 0.9 0.8 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 0.69 0.88 0.84 0.84

Current Ratio

Liquid Ratio
Definition: Liquid ratio is also termed as "Liquidity Ratio", "Acid Test Ratio" or "Quick Ratio". It is the ratio of liquid assets to current liabilities. The true liquidity refers to the ability of a firm to pay its short term obligations as and when they become due. Formula of Liquidity Ratio: [Liquid Ratio = Liquid Assets / Current Liabilities]
Liquid Ratio
0.8 0.71 0.7 0.64 0.6 0.55 0.73 0.76

0.5

0.4

Liquid Ratio

0.3

0.2

0.1

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Absolute Liquid Ratio

Absolute liquidity is represented by cash and near cash items. It is a ratio of absolute liquid assets to current liabilities. In the computation of this ratio only the absolute liquid assets are compared with the liquid liabilities. The absolute liquid assets are cash, bank and marketable securities. It is to be observed that receivables (debtors/accounts receivables and bills receivables) are eliminated from the list of liquid assets in order to obtain absolute4 liquid assets since there may be some doubt in their liquidity. Formula of Absolute Liquid Ratio: Absolute Liquid Ratio = Absolute Liquid Assets / Current Assets Absolute Liquid Ratio
0.12 0.1 0.1

0.08

0.06 0.06 0.05 0.04 0.05 0.04 Absolute Liquid Ratio

0.02

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Inventory Turnover Ratio

Definition: Stock turn over ratio and inventory turn over ratio are the same. This ratio is a relationship between the cost of goods sold during a particular period of time and the cost of average inventory during a particular period. It is expressed in number of times. Stock turn over ratio/Inventory turn over ratio indicates the number of time the stock has been turned over during the period and evaluates the efficiency with which a firm is able to manage its inventory. This ratio indicates whether investment in stock is within proper limit or not. Formula of Stock Turnover/Inventory Turnover Ratio: The ratio is calculated by dividing the cost of goods sold by the amount of average stock at cost. (a) Inventory Turnover Ratio = Cost of goods sold / Average inventory at cost (b) Inventory Turnover Ratio = Net Sales / Average Inventory at Cost (c) Inventory Turnover Ratio = Net Sales / Average inventory at Selling Price (d) Inventory Turnover Ratio = Net Sales / Inventory

Inventory Turnover Ratio

40 36.88 35 32.8 28.87 28.64 29.33

30

25

20

Inventory Turnover Ratio

15

10

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Debtors Turnover Ratio

Definition: Debtors turnover ratio or accounts receivable tu rnover ratio indicates the velocity of debt collection of a firm. In simple words it indicates the number of times average debtors (receivable) are turned over during a year. Formula of Debtors Turnover Ratio:
Debtors Turnover Ratio = Net Credit Sales / Average Trade Debtors Debtors Turnover Ratio = Total Sales / Debtors
Debtors Turnover Ratio
60 51.77 50

40

37.41

30

27.45 21.93 22.66

Debtors Turnover Ratio

20

10

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Fixed Assets Turnover Ratio

Definition: Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the efficiency and profit earning capacity of the concern. Higher the ratio, greater is the intensive utilization of fixed assets. Lower ratio means under-utilization of fixed assets. Formula of Fixed Assets Turnover Ratio: Fixed Assets Turnover Ratio = Cost of Sales / Net Fixed Assets
Fixed Assets Turnover Ratio
6

4.85

4 3.5 3 2.95 2.6 2.96

Fixed Assets Turnover Ratio

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Debt to Equity Ratio

Definition: Debt-to-Equity ratio indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. It is also known as external internal equity ratio. It is determined to ascertain soundness of the long term financial policies of the company. Formula of Debt to Equity Ratio:
Debt Equity Ratio = External Equities / Internal Equities] Outsiders funds / Shareholders funds
0.2

Debt Equity Ratio

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.29 0.84 0.84

0.46 Debt Equity Ratio

Or

As a long term financial ratio it may be calculated as follows:

Total Long Term Debts / Total Long Term Funds Total Long Term Debts / Shareholders Funds

0.1
0

0.07

Or

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Net Profit Ratio

Definition of net profit ratio: Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. Components of net profit ratio: The two basic components of the net profit ratio are the net profit and sales. The net profits are obtained after deducting income-tax and, generally, non operating expenses and incomes are excluded from the net profits for calculating this ratio. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded. Formula: Net Profit Ratio = (Net profit / Net sales) 100

Net Profit Margin(%)

25

20

19.8

15

14.23 12.66 Net Profit Margin(%)

10 7.4

8.32

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Gross Profit Ratio

Definition of gross profit ratio: Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales. Components: The basic components for the calculation of gross profit ratio are gross profit and net sales. Net sales means that sales minus sales returns. Gross profit would be the difference between net sales and cost of goods sold. Cost of goods sold in the case of a trading concern would be equal to opening stock plus purchases, minus closing stock plus all direct expenses relating to purchases. In the case of manufacturing concern, it would be equal to the sum of the cost of raw materials, wages, direct expenses and all manufacturing expenses. In other words, generally the expenses charged to profit and loss account or operating expenses are excluded from the calculation of cost of goods sold. Formula: Gross Profit Ratio = (Gross profit / Net sales) 100

Gross Profit Margin(%)

25

20.03 20 19.02

15

12.09 11.08
10 10.32 Gross Profit Margin(%)

0 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07

Conclusion
LIQUIDITY RATIOS
Current ratio The ideal figure should always be greater than 1.The company has a current ratio of 0.8 and it should look to improve it. The higher the better. Quick Ratio A quick ratio of 1 is regarded as ideal and demonstrates good liquidity within the business. The company has a quick ratio of 0.7 which is not very bad but can be improved. Debt-Equity Ratio Manufacturing companies tend to have a debt equity ratio of above 2.The company has a debt-equity ratio of 0.7 which means the company is not been wanting to take risks.

Conclusion
MANAGEMENT EFFICIENCY RATIOS
Inventory Turnover Ratio The higher the better. A higher inventory turnover ratio shows either strong sales or ineffective buying. Debtors Turnover Ratio. The company has a debtors turnover ratio of 51.77 which shows that the company has an efficient system for collection of accounts. Fixed Assets Turnover Ratio A higher fixed assets turnover ratio shows that the company uses its investment in fixed assets more efficiently. The company has a fixed assets turnover ratio of 4.85 which can be improved.

Conclusion
BAJAJ AUTOS FINANCIAL POSITION IS NOT AS PER STD.

WORKING CAPITAL RATIO IS NEGATIVE FOR ALL THE YEAR WHICH IS NOT GOT FOR THE COMPANY CURRENT RATIO AND LIQUID RATIO IS ALSO SHOWING A DECREASING TREND BAJAJ AUTO SHOULD TRY TO IMPROVE ITS CURRENT RATIO

THANK YOU
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