1
Contents
• Company profile • Approvals • Financial Analysis
(1) Balance Sheet (2) Profit/Loss A/c
• Ratio Analysis
2
Company Profile
The company was founded in 2006 by K Vishwanath & Chandulal Shah and his friends and is based in Mumbai , India
3
•AANJANEYA •COMPANY
LIFE
SCIENCE
IS
RESEARCH
DRIVEN
PHARMACEUTICAL COMPANY BASED IN INDIA.
MANUFACTURES FINISHED DOSAGE FORMS (BRANDED AND GENERIC) AS WELL AS THEIR RAW MATERIALS (API).
•AANJANEYA LIFE SCIENCE
IS THIRD-LARGEST QUININE SALTS MANUFACTURER IN THE WORLD.
•AANJANEYA LIFE SCIENCE ORGANISES MAIN THERAPEUTIC AREAS—DIABETOLOGY, CARDIOLOGY, NEPHROLOGY AND ONCOLOGY. 4
APPROVALS
?
World Health Organization (WHO)
?
United states Food and Drug Administration (USFDA)
?
Medicines and Healthcare Regulatory Agency(MHRA)
5
GROWTH INDICATIVE
16 15.5 15 14.5 14 13.5 13 12.5 CAGR
6
Pharma Industry (13.5)
Aanjaneya Ltd (15.4)
Financial Analysis
7
What is Financial analysis ?
8
?
?
?
Financial Analysis is the process of determining the operating & financial characteristics of a firm from accounting data & financial statement. The goal of such analysis is to determine efficiency & performance of the firm management Its main aim is to measure the firm?s liquidity, profitability and other indications that business is conducted in a rational way.
How to do Financial Analysis
Balance sheet
Profit and Loss A/C
Ratio Analysis
9
Balance Sheet of Aanjaneya Life science
10
11
12
Ratio Analysis
13
Ratio Analysis
14
Types of ratio:
1.Current ratio
2.Liquid ratio 3.Debt Equity ratio 4.Total assets to debt ratio 5.Proprietory ratio 6.Capital gearing ratio 7.Interest coverage ratio
8.Fixed assets turnover ratio
9.Current assets turnover ratio 10.Net profit ratio
Current Ratio
15
?
?
Also known as working capital ratio It is used to evaluate short term financial position of the business concern. It indicates the ability of the firm to meet its short term obligations
Current ratio = current assets current liabilities
? ?
Ideal current ratio is 2:1. A very high ratio indicates availability of idle cash and is not a good sign
Current Ratio
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2012 2013
Current ratio = current asset current liabilities
Current ratio(2012) =50.6054 /56.86
=0.89
Ideal current ratio should be 2:1. So, we can say that the company’s financial position is not satisfactory but as compared to 2012, the current ratio of 2013 is more. Which means , Curent assets are less than current liabilities
Current ratio(2013)
=156.14/110.0
=1.41
16
Quick Ratio
17
? ?
It is very useful in measuring liquidity position of a firm. Quick ratio = liquid asset
current liabilities
?
Liquid ratio of 1:1 is considered satisfactory. If quick assets
are equal to current liabilities, then the firm maybe able to meet its short term obligations
Quick/Liquid ratio
5 4 3
Quick ratio = liquid assets current liabilities
2
1 0 2012 2013
Quick ratio(2012) = 485.0/110 = 4.41
Interpretation:
Quick ratio(2013) =359.09/110 = 3.19
Ideally, it should be 1:1. So, it can be concluded that company’s financial position in 2012 was more sound compared to 2013.
18
Debt-Equity Ratio
19
?
shows a relationship between long term debt and shareholder’s fund.
?
Also called external internal equity ratio Debt equity ratio = debt equity or long term debt shareholder’s fund
?
A ratio of 1:1 is usually considered to be satisfactory. This ratio is
calculated to know about the organization’s repayment capacity of
long term debts
Debt-Equity Ratio
1.2
1 0.8 0.6 0.4 0.2 0 2012 2013
• Debt equity ratio=
long term debts/equity or
share holder funds • Debt equity ratio(2012) =138.85/134.39 =1.03
Ideally, it should be 1:1. So, it can be said that the organization’s repayment capacity of long-term debts has increased for the year 2013 as compared to 2012
• Debt equity ratio (2013) =298.58/351.27 =0.85
20
Proprietory Ratio
21
?
this establishes the relationship between shareholder’s funds to assets of the firm.
?
Also known as equity ratio or net worth to total assets ratio
Proprietary ratio =
equity
total assets
?
Higher the ratio, financial condition of the organization will be sound
Proprietary Ratio
0.45 0.4 0.35 0.3 0.25 0.2
• Formula = Equity / total assets • For 2012 =117.48/273.21 =0.43 • For 2013 =188.05/648.46 =0.29
0.15
0.1 0.05
0 2012 2013
22
23
Interpretation:
Since Ratio for the year 2013 is decreased, it can be concluded that the financial condition of the company is not sound.
Capital gearing Ratio
24
?
It shows relationship between equity capital ( including reserves and undistributed profits) and fixed cost bearing capital ( preference sharing capital, fixed interest bearing loans)
Capital gearing ratio= eq. share capital+reserves+P&L balance fixed cost bearing capital
?
A high gearing will be beneficial to equity shareholders
Capital Gearing Ratio
1.8 1.6
1.4
1.2 1 0.8 0.6 0.4 0.2 0 2012 2013
• Formula =Equity share capital + reserves + P&L Balance /Fixed cost bearing capital. • For 2012 =134.39/127.65 =1.05 • For 2013 = 348.8/210.53 =1.66
25
26
Interpretation: A low gearing is not beneficial to equity shareholders when rate of interest/dividend payable on fixed cost bearing capital is higher than the rate of return on investment in business.
Total assets to debt ratio
27
?
shows a relationship between total assets and the long-term debts Total asset to debt ratio= total assets
long term debts
Total asset to Debt ratio
2.2 2.15 2.1 2.05 2 1.95 1.9 1.85 2012 2013
28
• Formula =Total asset / Long term debt
• Total asset to debt ratio (2012) =273.21/138.85 =1.96
• Total asset to debt ratio(2013) • 648.4/298.5 = 2.17
29
Interpretation: Total assets in both the years is more than sufficient to repay in cash the total debts.
Fixed assets turnover Ratio
30
?
This ratio indicates relationship between cost of goods sold and fixed assets during a year Fixed assets turnover ratio= cost of goods sold
Net fixed assets
?
If there is increase in ratio, it indicates that there is better utilization of fixed assets and vice versa
Fixed Asset turnover Ratio
3 2.5 2 1.5 1 0.5 0
• Formula – Cost of goods sold/Net fixed assets. • For 2013 = 479.96/358.87 =1.33 • For 2012 =320.26/117.07 =2.73
2012 2013
31
32
Interpretation:
It can be concluded that the fixed assets are not being utilized properly as the ratio remain intact.
Net Profit Ratio
33
?
This ratio indicates relationship between net profit and net sales Net profit ratio= Net profit X 100
Net sales
?
Decrease in the ratio indicates managerial inefficiency and excessive selling and distribution expenses.
?
Increase in it shows better performance
Net Profit Ratio
12
• Net profit ratio= net profit*100/net sales
10
8
• Net profit ratio(2013) = 41.03/479.96*100
6
= 8.54 • Net profit ratio(2012) =36.01 /320.26*100
4
2
=11.24
0 2012 2013
34
35
Interpretation:
The decrease in ratio in 2013 implies managerial efficiency shows less efficient performnce.
Interest coverage Ratio
36
?
Also known as debt service ratio
Interest coverage ratio= net profit before interest and income tax
‘fixed interest charges’
?
This shows how many times the interest charges are covered by profits available to pay interest charges.
Interest coverage ratio
4 3.5 3 2.5 2 1.5
• Formula= Net profit before charging interest and tax /Fixed interest charges. • For 2012 =54.63 / 13.65 =4 • For 2013 =63.06 / 29.05 =2.17
2012 2013
37
1
0.5
0
38
Interpretation: From the findings, it can be said that the business won’t earn sufficiently.
Current assets turnover ratio
39
2.5
?
Formula – Cost of goods sold/Net current assets.
2
1.5 1 0.5 0 2012 2013
?
.
?
For 2012 =320.26/156.14 = 2.04 For 2013 = 479.96/289.53 = 1.65
40
Interpretation: Since there is decrease in the ratio in 2013, it can be said that the working capital has not been utilized efficiently in making sales.
Conclusions
41
In balance sheet:? ? ? ? ?
Net worth has increase substantially Total debt decreases following year. Total liabilities increase with relation to 2012. Current liabilities decreases. Current assets and Total assets both increases .
In Profit/Loss a/c:? ? ? ?
Total Income increases. Total expenses increases. Net profit increases. Net sales increases.
Thank You
42
doc_156096975.pptx
Contents
• Company profile • Approvals • Financial Analysis
(1) Balance Sheet (2) Profit/Loss A/c
• Ratio Analysis
2
Company Profile
The company was founded in 2006 by K Vishwanath & Chandulal Shah and his friends and is based in Mumbai , India
3
•AANJANEYA •COMPANY
LIFE
SCIENCE
IS
RESEARCH
DRIVEN
PHARMACEUTICAL COMPANY BASED IN INDIA.
MANUFACTURES FINISHED DOSAGE FORMS (BRANDED AND GENERIC) AS WELL AS THEIR RAW MATERIALS (API).
•AANJANEYA LIFE SCIENCE
IS THIRD-LARGEST QUININE SALTS MANUFACTURER IN THE WORLD.
•AANJANEYA LIFE SCIENCE ORGANISES MAIN THERAPEUTIC AREAS—DIABETOLOGY, CARDIOLOGY, NEPHROLOGY AND ONCOLOGY. 4
APPROVALS
?
World Health Organization (WHO)
?
United states Food and Drug Administration (USFDA)
?
Medicines and Healthcare Regulatory Agency(MHRA)
5
GROWTH INDICATIVE
16 15.5 15 14.5 14 13.5 13 12.5 CAGR
6
Pharma Industry (13.5)
Aanjaneya Ltd (15.4)
Financial Analysis
7
What is Financial analysis ?
8
?
?
?
Financial Analysis is the process of determining the operating & financial characteristics of a firm from accounting data & financial statement. The goal of such analysis is to determine efficiency & performance of the firm management Its main aim is to measure the firm?s liquidity, profitability and other indications that business is conducted in a rational way.
How to do Financial Analysis
Balance sheet
Profit and Loss A/C
Ratio Analysis
9
Balance Sheet of Aanjaneya Life science
10
11
12
Ratio Analysis
13
Ratio Analysis
14
Types of ratio:
1.Current ratio
2.Liquid ratio 3.Debt Equity ratio 4.Total assets to debt ratio 5.Proprietory ratio 6.Capital gearing ratio 7.Interest coverage ratio
8.Fixed assets turnover ratio
9.Current assets turnover ratio 10.Net profit ratio
Current Ratio
15
?
?
Also known as working capital ratio It is used to evaluate short term financial position of the business concern. It indicates the ability of the firm to meet its short term obligations
Current ratio = current assets current liabilities
? ?
Ideal current ratio is 2:1. A very high ratio indicates availability of idle cash and is not a good sign
Current Ratio
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2012 2013
Current ratio = current asset current liabilities
Current ratio(2012) =50.6054 /56.86
=0.89
Ideal current ratio should be 2:1. So, we can say that the company’s financial position is not satisfactory but as compared to 2012, the current ratio of 2013 is more. Which means , Curent assets are less than current liabilities
Current ratio(2013)
=156.14/110.0
=1.41
16
Quick Ratio
17
? ?
It is very useful in measuring liquidity position of a firm. Quick ratio = liquid asset
current liabilities
?
Liquid ratio of 1:1 is considered satisfactory. If quick assets
are equal to current liabilities, then the firm maybe able to meet its short term obligations
Quick/Liquid ratio
5 4 3
Quick ratio = liquid assets current liabilities
2
1 0 2012 2013
Quick ratio(2012) = 485.0/110 = 4.41
Interpretation:
Quick ratio(2013) =359.09/110 = 3.19
Ideally, it should be 1:1. So, it can be concluded that company’s financial position in 2012 was more sound compared to 2013.
18
Debt-Equity Ratio
19
?
shows a relationship between long term debt and shareholder’s fund.
?
Also called external internal equity ratio Debt equity ratio = debt equity or long term debt shareholder’s fund
?
A ratio of 1:1 is usually considered to be satisfactory. This ratio is
calculated to know about the organization’s repayment capacity of
long term debts
Debt-Equity Ratio
1.2
1 0.8 0.6 0.4 0.2 0 2012 2013
• Debt equity ratio=
long term debts/equity or
share holder funds • Debt equity ratio(2012) =138.85/134.39 =1.03
Ideally, it should be 1:1. So, it can be said that the organization’s repayment capacity of long-term debts has increased for the year 2013 as compared to 2012
• Debt equity ratio (2013) =298.58/351.27 =0.85
20
Proprietory Ratio
21
?
this establishes the relationship between shareholder’s funds to assets of the firm.
?
Also known as equity ratio or net worth to total assets ratio
Proprietary ratio =
equity
total assets
?
Higher the ratio, financial condition of the organization will be sound
Proprietary Ratio
0.45 0.4 0.35 0.3 0.25 0.2
• Formula = Equity / total assets • For 2012 =117.48/273.21 =0.43 • For 2013 =188.05/648.46 =0.29
0.15
0.1 0.05
0 2012 2013
22
23
Interpretation:
Since Ratio for the year 2013 is decreased, it can be concluded that the financial condition of the company is not sound.
Capital gearing Ratio
24
?
It shows relationship between equity capital ( including reserves and undistributed profits) and fixed cost bearing capital ( preference sharing capital, fixed interest bearing loans)
Capital gearing ratio= eq. share capital+reserves+P&L balance fixed cost bearing capital
?
A high gearing will be beneficial to equity shareholders
Capital Gearing Ratio
1.8 1.6
1.4
1.2 1 0.8 0.6 0.4 0.2 0 2012 2013
• Formula =Equity share capital + reserves + P&L Balance /Fixed cost bearing capital. • For 2012 =134.39/127.65 =1.05 • For 2013 = 348.8/210.53 =1.66
25
26
Interpretation: A low gearing is not beneficial to equity shareholders when rate of interest/dividend payable on fixed cost bearing capital is higher than the rate of return on investment in business.
Total assets to debt ratio
27
?
shows a relationship between total assets and the long-term debts Total asset to debt ratio= total assets
long term debts
Total asset to Debt ratio
2.2 2.15 2.1 2.05 2 1.95 1.9 1.85 2012 2013
28
• Formula =Total asset / Long term debt
• Total asset to debt ratio (2012) =273.21/138.85 =1.96
• Total asset to debt ratio(2013) • 648.4/298.5 = 2.17
29
Interpretation: Total assets in both the years is more than sufficient to repay in cash the total debts.
Fixed assets turnover Ratio
30
?
This ratio indicates relationship between cost of goods sold and fixed assets during a year Fixed assets turnover ratio= cost of goods sold
Net fixed assets
?
If there is increase in ratio, it indicates that there is better utilization of fixed assets and vice versa
Fixed Asset turnover Ratio
3 2.5 2 1.5 1 0.5 0
• Formula – Cost of goods sold/Net fixed assets. • For 2013 = 479.96/358.87 =1.33 • For 2012 =320.26/117.07 =2.73
2012 2013
31
32
Interpretation:
It can be concluded that the fixed assets are not being utilized properly as the ratio remain intact.
Net Profit Ratio
33
?
This ratio indicates relationship between net profit and net sales Net profit ratio= Net profit X 100
Net sales
?
Decrease in the ratio indicates managerial inefficiency and excessive selling and distribution expenses.
?
Increase in it shows better performance
Net Profit Ratio
12
• Net profit ratio= net profit*100/net sales
10
8
• Net profit ratio(2013) = 41.03/479.96*100
6
= 8.54 • Net profit ratio(2012) =36.01 /320.26*100
4
2
=11.24
0 2012 2013
34
35
Interpretation:
The decrease in ratio in 2013 implies managerial efficiency shows less efficient performnce.
Interest coverage Ratio
36
?
Also known as debt service ratio
Interest coverage ratio= net profit before interest and income tax
‘fixed interest charges’
?
This shows how many times the interest charges are covered by profits available to pay interest charges.
Interest coverage ratio
4 3.5 3 2.5 2 1.5
• Formula= Net profit before charging interest and tax /Fixed interest charges. • For 2012 =54.63 / 13.65 =4 • For 2013 =63.06 / 29.05 =2.17
2012 2013
37
1
0.5
0
38
Interpretation: From the findings, it can be said that the business won’t earn sufficiently.
Current assets turnover ratio
39
2.5
?
Formula – Cost of goods sold/Net current assets.
2
1.5 1 0.5 0 2012 2013
?
.
?
For 2012 =320.26/156.14 = 2.04 For 2013 = 479.96/289.53 = 1.65
40
Interpretation: Since there is decrease in the ratio in 2013, it can be said that the working capital has not been utilized efficiently in making sales.
Conclusions
41
In balance sheet:? ? ? ? ?
Net worth has increase substantially Total debt decreases following year. Total liabilities increase with relation to 2012. Current liabilities decreases. Current assets and Total assets both increases .
In Profit/Loss a/c:? ? ? ?
Total Income increases. Total expenses increases. Net profit increases. Net sales increases.
Thank You
42
doc_156096975.pptx