Description
This is a spreadsheet about financial analysis of Britannia.
Column1 Column2 Column3 Britannia Annual Reports CONSOLIDATED BALANCE SHEET As at
Column4
Column5
Column6
Column7
Rs. '000 31-Mar-09
SOURCES OF FUNDS
Shareholders funds Share Capital Reserves and surplus Minority Interest Loan funds Secured Unsecured Deffered tax liability, net 238,902 6,974,800 7,213,702 36,974 645,440 2,058,033 2,703,473 99,417 10,053,566
APPLICATION OF FUNDS
Fixed assets Gross block Less: Accumulated depreciation and amortisation Net block Capital work-in-progress and advances Investments Deferred tax asset, net Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances Less: Current liabilities and provisions Current liabilities Provisions Net current assets Miscellaneous expenditure (to the extent not written off or adjusted) 9,216,476 4,511,365 4,705,111 62,990 4,768,101 3,773,437 – 2,886,890 740,000 688,412 137,085 1,654,709 6,107,096 3,347,815 1,517,254 4,865,069 1,242,027 270,001 10,053,566
Column8
Column9
Column10
Column11
31-Mar-08
31-Mar-07
31-Mar-06
31-Mar-05
238,902 6,683,375 6,922,277 101,954 65,035 2,657,499 2,722,534 – 9,746,765
238,902 5,481,158 5,720,060 102,670 79,431 1,490,171 1,569,602 – 7,392,332
238,902 5,251,994 5,490,896 – 16,200 77,383 93,583 16,913 5,601,392
238,902 4,196,341 4,435,243 – 61,379 – 61,379 170,600 4,667,222
7,602,584 3,611,728 3,990,856 101,257 4,092,113 3,398,390 25,353 3,293,094 690,426 534,619 131,930 1,358,099 6,008,168 2,959,745 1,057,045 4,016,790 1,991,378 239,531 9,746,765
6,820,104 3,198,093 3,622,011 163,684 3,785,695 2,907,568 12,426 2,367,141 567,499 546,817 1,709 871,878 4,355,044 2,988,956 935,255 3,924,211 430,833 255,810 7,392,332
3,153,666 1,748,063 1,405,603 110,782 1,516,385 3,598,641 – 1,847,956 208,516 353,395 5,558 940,652 3,356,077 2,247,006 783,313 3,030,319 325,758 160,608 5,601,392
2,503,463 1,543,940 959,523 317,007 1,276,530 3,300,767 137,084 1,342,237 427,764 163,062 1,847 708,720 2,643,630 2,059,717 973,431 3,033,148 -389,518 342,359 4,667,222
Column1 Column2 Column3 Column4 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended
Column5
Column6
Column7
Column8 Rs. '000 3/31/2009
INCOME
Gross Sales Less: Excise duty Net sales Other income 34,522,596 310,316 34,212,280 387,176 34,599,456 21,190,636 1,587,075 9,054,224 659,106 326,031 32,817,072 1,782,384 -180,059 1,962,443 346,508 54,648 1,224 127,646 1,432,417 2,117 80,314 1,514,848 146,166 1,661,014 190,000 955,607 – 162,405 353,002 1,661,014 63.41 63.40
EXPENDITURE
Cost of materials Staff cost Expenses Depreciation and amortisation (including impairment) Financial expenses Profit before taxation and exceptional items Exceptional items (Profit)/Loss Profit before taxation Income tax expense Current income tax Fringe benefit tax Wealth tax Deferred income tax, net Profit after taxation before share of Profits/(Losses) of Associates (Net) and Minority interest Share of Net Profit/ (Loss) of Associates Share of Loss/ (Profit) of minority Profit after taxation Profit brought forward Profit available for appropriation Appropriations Transfer to general reserve Interim dividend Proposed dividend Tax on Interim/Proposed dividend Profit carried forward Basic earnings per share (Rs.) Diluted earnings per share (Rs.)
Column9
Column10
Column11
Column12
3/31/2008
3/31/2007
3/31/2006
3/31/2005
28,098,919 329,597 27,769,322 513,688 28,283,010 16,929,035 1,262,579 7,218,760 393,606 185,956 25,989,936 2,293,074 111,651 2,181,423 359,164 68,030 1,225 -12,094 1,765,098 413 8,878 1,774,389 146,166 1,920,555 1,271,284 – 430,023 73,082 146,166 1,920,555 74.27 74.27
23,841,384 1,178,500 22,662,884 288,477 22,951,361 14,540,326 793,025 6,023,182 259,630 116,923 21,733,086 1,218,275 53,697 1,164,578 89,169 52,184 1,225 -29,339 1,051,339 – – 1,051,339 500,000 1,551,339 599,299 – 358,352 60,902 532,786 1,551,339 43.09
18,179,211 1,045,828 17,133,383 216,847 17,350,230 10,049,609 730,661 4,343,508 217,228 50,861 15,391,867 1,958,363 -48,765 2,007,128 542,864 – – – 542,864 – – 542,864 500,000 1,964,264 1,055,653 – 358,352 50,259 500,000 1,964,264 59.96
16,154,485 278,787 15,875,698 791,930 16,667,628 7,358,693 586,096 6,112,565 189,707 – 14,247,061 2,420,567 218,160 2,202,407 714,712 – – – 1,487,695 – – 1,487,695 500,000 1,998,472 1,117,102 – 334,462 46,908 500,000 1,998,472 60.59
Column1 RATIOS: Year ending
Column2
Column3
Column4
Column5
Column6
Column7
31-Mar-09
31-Mar-08
31-Mar-07
31-Mar-06
Current Ratio Quick ratio Inventory Turnover ratio Debtors Turnover ratio Working capital Turnover ratio Debt equity ratio Solvency ratio Fixed assets ratio Return on shareholder's investment Net Profit ratio Book value per share Tax ratio Equity ratio
1.33 0.46761754 7.34029908 0.52321081 19.1844769 0.83886027 0.52345898 0.48079226 21.00% 4.43% Rs. 334.00 27.01% 0.49244878
1.57110461 0.458477 5.14076883 0.74401601 10.0152604 0.82086848 0.49832239 0.42428131 25.63% 6.39% Rs. 306.60 19.09% 0.51185039
1.16534536 0.37338288 6.14256861 0.50833041 29.4213512 0.79694234 0.4966952 0.5193238 18.38% 4.64% Rs. 257.40 9.72% 0.51715017
1.07495263 0.2525445 5.43822959 1.03995377 59.6702807 0.42626722 0.37076813 0.27153563 19.15% 3.17% Rs. 229.80 27.05% 0.64819139
Column8
31-Mar-05
0.93940575 0.28774487 5.48240959 1.85132456 -58.960579 * Current liabilities are included in outsider's funds 0.47823671 0.44375131 0.28388644 33.54% 9.37% Rs. 185.65 32.45% 0.60277744
Year ending Current ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.939405753 1.074952626 1.165345358 1.571104605 1.329938184
Current ratio
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4
0.2
Current ratio
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
The current ratio for all the years is less than 2:1, which implies that the company doesn't has a very strong liquidity position. But over the years this ratio has risen from 0.94 to 1.33. This indicates that its liquidity position has improved over the 5 year period.
Year ending Quick ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.28774487 0.252544497 0.37338288 0.458476997 0.467617536
Quick ratio
0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Quick ratio
As a convention, a quick ratio of 1:1 is considered to be satisfactory. Here, for all the 5 years the quick ratio is
As a convention, a quick ratio of 1:1 is considered to be satisfactory. Here, for all the 5 years the quick ratio is below 0.5, which implies that the company may not be able to meet its short term obligations. But the good sign is that the ratio has risen, over the years.
Year ending Inventory Turnover ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
5.482409589 5.43822959 6.142568609 5.140768833 7.340299076
Inventory Turnover ratio
8 7
6
5 4 3 2 1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Inventory Turnover ratio
Every firm has to maintain a certain level of inventory to be able to meet the requirements of the business. The increasing inventory turnover ratio of Britannia indicates that the efficiency of inventory management increases over the years.
Year ending Debtors turnover ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
1.851324562 1.039953769 0.508330411 0.744016013 0.523210811
Debtors turnover ratio
2 1.8 1.6 1.4 1.2 1 0.8 0.6
Debtors turnover ratio
0.6 0.4 0.2 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Debtors turnover ratio indicates the number of times the debtors ate turned over during a year.Over the 5 years, the debtors turnover ratio has fallen down, which implies that Britannia needs to work on the management of its debtors.
Year ending Working capital turnover ratio 31-Mar-05 -58.96057913 31-Mar-06 59.67028067 31-Mar-07 29.42135125 31-Mar-08 10.01526039 31-Mar-09 19.18447688
Working capital turnover ratio
80 60 40 20
0 -20 Working capital turnover ratio
1-Jan-05
1-Jan-06
1-Jan-07
1-Jan-08
1-Jan-09
-40 -60 -80
The working capital ratio measures efficiency with which the working capital is being used by a firm. A higher ratio indicates efficient utilization of working capital and a low ratio indicates otherwise. We see that in the year 2006, the ratio has risen from a negative to the highest in the 5 years. There is a fall in the efficiency over the next 4 years, but, it is still well above 10.00.
Year ending Debt equity ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.478236705 0.426267225 0.79694234 0.82086848 0.838860269
Debt equity ratio
Debt equity ratio
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Debt equity ratio
Generally a low debt - equity ratio is preffered because a high proportion of owner's funds provide a larger margin of safety. But a very low ratio is not considered satisfactory for the shareholders because it indicates that the firm is not able to use the low cost outsiders funds to magnify their earnings. In the 5 year period analysed, we see that the amount of debt is less as compared to the proportion of shareholders equity, which may be considered favourable, and has increased over the years.. The company should make sure that the proportion of debt is kept in control and is not allowed to rise above a set level.
Year ending Solvency ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.443751307 0.370768128 0.496695201 0.498322393 0.523458979
Solvency ratio
0.6 0.5
0.4 0.3 0.2 0.1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09 Solvency ratio
Generally, lower the ratio of total liabilities to total assets, more satisfactory or stable is the long - term solvency position of the firm. Here, for all the 5 years, the proportion of liabilities is less in comparison to the assets, which is a positive for Britannia. But the solvency ratio is increasing, which means that the proportion of assets is not increasing in the same proportion as the liabilities are. Therefore, the company needs to have
assets, which is a positive for Britannia. But the solvency ratio is increasing, which means that the proportion of assets is not increasing in the same proportion as the liabilities are. Therefore, the company needs to have higher assets with itself.
Year ending Equity ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.602777435 0.648191387 0.517150174 0.511850393 0.492448784
Equity ratio
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Equity ratio
As the equity ratio represents the relationship of owner's funds to total assets, higher the ratio or the share of shareholders in the total capital of the company, the better is the long term solvency position of the company. It is a concern for Britannia as its equity ratio has declined over the last 5 years from above 60% to 49.2%. Which implies that the company needs to raise its shareholders funds.
Year ending Fixed assets ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.283886437 0.271535626 0.519323804 0.424281305 0.480792262
Fixed assets ratio
0.6 0.5 0.4
0.4
0.3
Fixed assets ratio
0.2 0.1 0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
The ratio indicates the extent to which the total fixed assets are financed by the long term funds of the firm. Britannia's total long term funds are more than its total fixed assets, which means that part of the working capital requirements are met out of the long term funds of the firm. We see an increase in the fixed assets ratio over the five years.
Year ending Return on shareholder's investment 31-Mar-05 33.54% 31-Mar-06 19.15% 31-Mar-07 18.38% 31-Mar-08 25.63% 31-Mar-09 21.00%
Return on shareholder's investment
40.00% 35.00%
30.00%
25.00% 20.00% 15.00%
10.00% Return on shareholder's investment
5.00% 0.00%
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
The return on shareholder's investment decreases during the first 3 years.. then increases slightly in the year ending 31st march 2008, but then again falls the next year, which is not a good sign for the company.
Year ending Net profit ratio 31-Mar-05
9.37%
31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
3.17% 4.64% 6.39% 4.43%
Net profit ratio
10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Net profit ratio
We see a sharp fall in the net profit ratio in the financial year ending 31st march 2006.Though in the next two years, the ratio rises but it again falls in the year ending 31st march 2009, which could have been because of the global economic slowdown. And over all in the 5 year period, the ratio has fallen from 9.37% to 4.43%, which is a huge fall.
Current ratio
has a very strong that its liquidity position
Quick ratio
ears the quick ratio is
ears the quick ratio is gations. But the good
ventory Turnover ratio
ents of the business. ntory management
Debtors turnover ratio
ng a year.Over the 5
ng capital turnover ratio
ed by a firm. A higher e. We see that in the l in the efficiency over
Debt equity ratio
nds provide a larger because it indicates
the proportion of ears.. The company e above a set level.
Solvency ratio
term in comparison to the s that the proportion mpany needs to have
s that the proportion mpany needs to have
Equity ratio
he ratio or the share of sition of the company. bove 60% to 49.2%.
Fixed assets ratio
erm funds of the firm. part of the working n the fixed assets ratio
shareholder's investment
ses slightly in the year for the company.
Net profit ratio
Though in the next two ave been because of the 37% to 4.43%, which is a
doc_603474774.xlsx
This is a spreadsheet about financial analysis of Britannia.
Column1 Column2 Column3 Britannia Annual Reports CONSOLIDATED BALANCE SHEET As at
Column4
Column5
Column6
Column7
Rs. '000 31-Mar-09
SOURCES OF FUNDS
Shareholders funds Share Capital Reserves and surplus Minority Interest Loan funds Secured Unsecured Deffered tax liability, net 238,902 6,974,800 7,213,702 36,974 645,440 2,058,033 2,703,473 99,417 10,053,566
APPLICATION OF FUNDS
Fixed assets Gross block Less: Accumulated depreciation and amortisation Net block Capital work-in-progress and advances Investments Deferred tax asset, net Current assets, loans and advances Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances Less: Current liabilities and provisions Current liabilities Provisions Net current assets Miscellaneous expenditure (to the extent not written off or adjusted) 9,216,476 4,511,365 4,705,111 62,990 4,768,101 3,773,437 – 2,886,890 740,000 688,412 137,085 1,654,709 6,107,096 3,347,815 1,517,254 4,865,069 1,242,027 270,001 10,053,566
Column8
Column9
Column10
Column11
31-Mar-08
31-Mar-07
31-Mar-06
31-Mar-05
238,902 6,683,375 6,922,277 101,954 65,035 2,657,499 2,722,534 – 9,746,765
238,902 5,481,158 5,720,060 102,670 79,431 1,490,171 1,569,602 – 7,392,332
238,902 5,251,994 5,490,896 – 16,200 77,383 93,583 16,913 5,601,392
238,902 4,196,341 4,435,243 – 61,379 – 61,379 170,600 4,667,222
7,602,584 3,611,728 3,990,856 101,257 4,092,113 3,398,390 25,353 3,293,094 690,426 534,619 131,930 1,358,099 6,008,168 2,959,745 1,057,045 4,016,790 1,991,378 239,531 9,746,765
6,820,104 3,198,093 3,622,011 163,684 3,785,695 2,907,568 12,426 2,367,141 567,499 546,817 1,709 871,878 4,355,044 2,988,956 935,255 3,924,211 430,833 255,810 7,392,332
3,153,666 1,748,063 1,405,603 110,782 1,516,385 3,598,641 – 1,847,956 208,516 353,395 5,558 940,652 3,356,077 2,247,006 783,313 3,030,319 325,758 160,608 5,601,392
2,503,463 1,543,940 959,523 317,007 1,276,530 3,300,767 137,084 1,342,237 427,764 163,062 1,847 708,720 2,643,630 2,059,717 973,431 3,033,148 -389,518 342,359 4,667,222
Column1 Column2 Column3 Column4 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended
Column5
Column6
Column7
Column8 Rs. '000 3/31/2009
INCOME
Gross Sales Less: Excise duty Net sales Other income 34,522,596 310,316 34,212,280 387,176 34,599,456 21,190,636 1,587,075 9,054,224 659,106 326,031 32,817,072 1,782,384 -180,059 1,962,443 346,508 54,648 1,224 127,646 1,432,417 2,117 80,314 1,514,848 146,166 1,661,014 190,000 955,607 – 162,405 353,002 1,661,014 63.41 63.40
EXPENDITURE
Cost of materials Staff cost Expenses Depreciation and amortisation (including impairment) Financial expenses Profit before taxation and exceptional items Exceptional items (Profit)/Loss Profit before taxation Income tax expense Current income tax Fringe benefit tax Wealth tax Deferred income tax, net Profit after taxation before share of Profits/(Losses) of Associates (Net) and Minority interest Share of Net Profit/ (Loss) of Associates Share of Loss/ (Profit) of minority Profit after taxation Profit brought forward Profit available for appropriation Appropriations Transfer to general reserve Interim dividend Proposed dividend Tax on Interim/Proposed dividend Profit carried forward Basic earnings per share (Rs.) Diluted earnings per share (Rs.)
Column9
Column10
Column11
Column12
3/31/2008
3/31/2007
3/31/2006
3/31/2005
28,098,919 329,597 27,769,322 513,688 28,283,010 16,929,035 1,262,579 7,218,760 393,606 185,956 25,989,936 2,293,074 111,651 2,181,423 359,164 68,030 1,225 -12,094 1,765,098 413 8,878 1,774,389 146,166 1,920,555 1,271,284 – 430,023 73,082 146,166 1,920,555 74.27 74.27
23,841,384 1,178,500 22,662,884 288,477 22,951,361 14,540,326 793,025 6,023,182 259,630 116,923 21,733,086 1,218,275 53,697 1,164,578 89,169 52,184 1,225 -29,339 1,051,339 – – 1,051,339 500,000 1,551,339 599,299 – 358,352 60,902 532,786 1,551,339 43.09
18,179,211 1,045,828 17,133,383 216,847 17,350,230 10,049,609 730,661 4,343,508 217,228 50,861 15,391,867 1,958,363 -48,765 2,007,128 542,864 – – – 542,864 – – 542,864 500,000 1,964,264 1,055,653 – 358,352 50,259 500,000 1,964,264 59.96
16,154,485 278,787 15,875,698 791,930 16,667,628 7,358,693 586,096 6,112,565 189,707 – 14,247,061 2,420,567 218,160 2,202,407 714,712 – – – 1,487,695 – – 1,487,695 500,000 1,998,472 1,117,102 – 334,462 46,908 500,000 1,998,472 60.59
Column1 RATIOS: Year ending
Column2
Column3
Column4
Column5
Column6
Column7
31-Mar-09
31-Mar-08
31-Mar-07
31-Mar-06
Current Ratio Quick ratio Inventory Turnover ratio Debtors Turnover ratio Working capital Turnover ratio Debt equity ratio Solvency ratio Fixed assets ratio Return on shareholder's investment Net Profit ratio Book value per share Tax ratio Equity ratio
1.33 0.46761754 7.34029908 0.52321081 19.1844769 0.83886027 0.52345898 0.48079226 21.00% 4.43% Rs. 334.00 27.01% 0.49244878
1.57110461 0.458477 5.14076883 0.74401601 10.0152604 0.82086848 0.49832239 0.42428131 25.63% 6.39% Rs. 306.60 19.09% 0.51185039
1.16534536 0.37338288 6.14256861 0.50833041 29.4213512 0.79694234 0.4966952 0.5193238 18.38% 4.64% Rs. 257.40 9.72% 0.51715017
1.07495263 0.2525445 5.43822959 1.03995377 59.6702807 0.42626722 0.37076813 0.27153563 19.15% 3.17% Rs. 229.80 27.05% 0.64819139
Column8
31-Mar-05
0.93940575 0.28774487 5.48240959 1.85132456 -58.960579 * Current liabilities are included in outsider's funds 0.47823671 0.44375131 0.28388644 33.54% 9.37% Rs. 185.65 32.45% 0.60277744
Year ending Current ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.939405753 1.074952626 1.165345358 1.571104605 1.329938184
Current ratio
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4
0.2
Current ratio
0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
The current ratio for all the years is less than 2:1, which implies that the company doesn't has a very strong liquidity position. But over the years this ratio has risen from 0.94 to 1.33. This indicates that its liquidity position has improved over the 5 year period.
Year ending Quick ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.28774487 0.252544497 0.37338288 0.458476997 0.467617536
Quick ratio
0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Quick ratio
As a convention, a quick ratio of 1:1 is considered to be satisfactory. Here, for all the 5 years the quick ratio is
As a convention, a quick ratio of 1:1 is considered to be satisfactory. Here, for all the 5 years the quick ratio is below 0.5, which implies that the company may not be able to meet its short term obligations. But the good sign is that the ratio has risen, over the years.
Year ending Inventory Turnover ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
5.482409589 5.43822959 6.142568609 5.140768833 7.340299076
Inventory Turnover ratio
8 7
6
5 4 3 2 1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Inventory Turnover ratio
Every firm has to maintain a certain level of inventory to be able to meet the requirements of the business. The increasing inventory turnover ratio of Britannia indicates that the efficiency of inventory management increases over the years.
Year ending Debtors turnover ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
1.851324562 1.039953769 0.508330411 0.744016013 0.523210811
Debtors turnover ratio
2 1.8 1.6 1.4 1.2 1 0.8 0.6
Debtors turnover ratio
0.6 0.4 0.2 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Debtors turnover ratio indicates the number of times the debtors ate turned over during a year.Over the 5 years, the debtors turnover ratio has fallen down, which implies that Britannia needs to work on the management of its debtors.
Year ending Working capital turnover ratio 31-Mar-05 -58.96057913 31-Mar-06 59.67028067 31-Mar-07 29.42135125 31-Mar-08 10.01526039 31-Mar-09 19.18447688
Working capital turnover ratio
80 60 40 20
0 -20 Working capital turnover ratio
1-Jan-05
1-Jan-06
1-Jan-07
1-Jan-08
1-Jan-09
-40 -60 -80
The working capital ratio measures efficiency with which the working capital is being used by a firm. A higher ratio indicates efficient utilization of working capital and a low ratio indicates otherwise. We see that in the year 2006, the ratio has risen from a negative to the highest in the 5 years. There is a fall in the efficiency over the next 4 years, but, it is still well above 10.00.
Year ending Debt equity ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.478236705 0.426267225 0.79694234 0.82086848 0.838860269
Debt equity ratio
Debt equity ratio
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Debt equity ratio
Generally a low debt - equity ratio is preffered because a high proportion of owner's funds provide a larger margin of safety. But a very low ratio is not considered satisfactory for the shareholders because it indicates that the firm is not able to use the low cost outsiders funds to magnify their earnings. In the 5 year period analysed, we see that the amount of debt is less as compared to the proportion of shareholders equity, which may be considered favourable, and has increased over the years.. The company should make sure that the proportion of debt is kept in control and is not allowed to rise above a set level.
Year ending Solvency ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.443751307 0.370768128 0.496695201 0.498322393 0.523458979
Solvency ratio
0.6 0.5
0.4 0.3 0.2 0.1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09 Solvency ratio
Generally, lower the ratio of total liabilities to total assets, more satisfactory or stable is the long - term solvency position of the firm. Here, for all the 5 years, the proportion of liabilities is less in comparison to the assets, which is a positive for Britannia. But the solvency ratio is increasing, which means that the proportion of assets is not increasing in the same proportion as the liabilities are. Therefore, the company needs to have
assets, which is a positive for Britannia. But the solvency ratio is increasing, which means that the proportion of assets is not increasing in the same proportion as the liabilities are. Therefore, the company needs to have higher assets with itself.
Year ending Equity ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.602777435 0.648191387 0.517150174 0.511850393 0.492448784
Equity ratio
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Equity ratio
As the equity ratio represents the relationship of owner's funds to total assets, higher the ratio or the share of shareholders in the total capital of the company, the better is the long term solvency position of the company. It is a concern for Britannia as its equity ratio has declined over the last 5 years from above 60% to 49.2%. Which implies that the company needs to raise its shareholders funds.
Year ending Fixed assets ratio 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
0.283886437 0.271535626 0.519323804 0.424281305 0.480792262
Fixed assets ratio
0.6 0.5 0.4
0.4
0.3
Fixed assets ratio
0.2 0.1 0
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
The ratio indicates the extent to which the total fixed assets are financed by the long term funds of the firm. Britannia's total long term funds are more than its total fixed assets, which means that part of the working capital requirements are met out of the long term funds of the firm. We see an increase in the fixed assets ratio over the five years.
Year ending Return on shareholder's investment 31-Mar-05 33.54% 31-Mar-06 19.15% 31-Mar-07 18.38% 31-Mar-08 25.63% 31-Mar-09 21.00%
Return on shareholder's investment
40.00% 35.00%
30.00%
25.00% 20.00% 15.00%
10.00% Return on shareholder's investment
5.00% 0.00%
1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
The return on shareholder's investment decreases during the first 3 years.. then increases slightly in the year ending 31st march 2008, but then again falls the next year, which is not a good sign for the company.
Year ending Net profit ratio 31-Mar-05
9.37%
31-Mar-06 31-Mar-07 31-Mar-08 31-Mar-09
3.17% 4.64% 6.39% 4.43%
Net profit ratio
10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 1-Jan-05 1-Jan-06 1-Jan-07 1-Jan-08 1-Jan-09
Net profit ratio
We see a sharp fall in the net profit ratio in the financial year ending 31st march 2006.Though in the next two years, the ratio rises but it again falls in the year ending 31st march 2009, which could have been because of the global economic slowdown. And over all in the 5 year period, the ratio has fallen from 9.37% to 4.43%, which is a huge fall.
Current ratio
has a very strong that its liquidity position
Quick ratio
ears the quick ratio is
ears the quick ratio is gations. But the good
ventory Turnover ratio
ents of the business. ntory management
Debtors turnover ratio
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Debt equity ratio
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Solvency ratio
term in comparison to the s that the proportion mpany needs to have
s that the proportion mpany needs to have
Equity ratio
he ratio or the share of sition of the company. bove 60% to 49.2%.
Fixed assets ratio
erm funds of the firm. part of the working n the fixed assets ratio
shareholder's investment
ses slightly in the year for the company.
Net profit ratio
Though in the next two ave been because of the 37% to 4.43%, which is a
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