FFBD Assignment Ranjeet Taloskar New

APPENDIX – 1
Title : Financial Analysis for Titan and Timex

watches manufacturers in India
Subject : Cash Flow and Balance Sheet Analysis as

Analyst Decisions
Level / Semester : I / Semester I
Programme : GPBL(MBA) Part Time
Subject Tutor : Prof. Augustine
Name of Student : Mr. Ranjeet B. Taloskar
Student’s Registration Number : GBPT/F10/10
Date of Submission : 22-08-2010
Word Count : 2162 words
Word Limit : 2000 words.

APPENDIX – 2
Student Name Mr. Ranjeet B. Taloskar

Registration Number GBPT/F10/10
Date for submission of the Assignment. 22.08.2010
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2
Balance sheet, Cash flow, Market Ratios
analysis for Titan and Timex watches in India.
3
Table of Contents
1 Market History Details and Current Finance Status as Analyst........................................................6

1.1 Titan watches .............................................................................................................................6
1.2 Timex watches ...........................................................................................................................8
.........................................................................................................................................................9
1.3 Titan and Timex Cost of Finished Goods For last 3 years................................................10
1.4 Volume produced By Titan and Timex India ..................................................................11
1.5 Average Market Price for Titan and Timex India ...........................................................12
1.6 Total Volume produced by Titan and Timex Compare to market..........................................12
2 Break Even Analysis:......................................................................................................................13
2.1 Titan Watches India Break-Even Analysis:.............................................................................15
2.1.1 For Year 2008 for Titan Industries ...................................................................................15
2.1.4 For Year 2008 for Timex Industries .................................................................................17
3 Ratio - Analysis...............................................................................................................................20
3.1.1 Ratio Analysis for Titan Industries....................................................................................20
3.1.2 Ratio Analysis for Timex Industries..................................................................................24
References.........................................................................................................................................31
4
Table of Figures
igure 1 1 – Maintaining leadership in domestic market
Figure 1 2 – Financial Snapshot
Figure 1 3 – Financial Snapshot for Timex ---8
Figure 1 4 – EPS and DPS for Timex---9
Figure 1 5 – Formula for price of finished goods---10
Figure 1 6 –Average Market Price for Titan--------12
Figure 2 1 – Equation for BEP -----13
Figure 2 2 – Equation for BE Sales-------13
Tables
Table 1 1 –price of finished goods for Titan India---------10
Table 1 2 –price of finished goods for Timex India--------11
Table 1 3 –Volume produced by Titan India-----------------11
Table 1 4 –Volume produced by Timex India-----------------11
Table 1 5 –Volume produced by Titan(left) and Timex(Right) Watches------12
Table 2 1 –Variable and Fixed Cost for Titan India -------------15
Table 2 2 –Variable and Fixed Cost for Timex India -----------18
5
1 Market History Details and Current Finance Status as
Analyst
1.1 Titan watches

Titan Industries is the world's sixth largest wrist watch manufacturer and India's leading producer
of watches under the Titan, Fastrack, Sonata, Nebula, RAGA, Regalia, Octane & Xylys brand
names. It is a joint venture between one of India's most respected business organizations, the Tata
Group, and the Tamil Nadu Industrial Development Corporation (TIDCO).
Titan Industries has drawn out ambitious growth plans targeting to expand its market share to 75
per cent over the next five years. It currently holds 65 per cent share in the organized watch market
of the country. In 2009, around Titan 15 million watches were sold in the country.
The Company proposed to manufacture 2 million digital and ana-digi watches in collaboration with
Casio Computer Company of Japan. - In April the Company also issued 5,25,000 - 13.5% secured
redeemable partly convertible debentures of Rs 300 each for cash at par.
Profit before tax for the Company grew by 39.4% to Rs. 321.32 crores, while net profit grew by
57.5% over last year to Rs. 250.32 crores.
The year witnessed expansion of the Companies retail network with a net addition of 52 stores
(81,267sq.ft.) across Watches, and Eyewear businesses. As on 31st March 2010, the Company has
a total of 539 stores, with over 6,85,000 sq. ft of retail space, delivering a retail turnover of Rs.
4,400 crores.
During the year under review, the Company raised a total of Rs.10.43 crores from commercial
banks. Borrowings of Rs.110.47 crores were repaid during the year. The Company incurred Rs.
44.16 crores as capital expenditure in respect of refurbishment and expansion programs at
manufacturing facilities and retail outlets and in IT Hardware systems.
The Companies continued effort at conserving cash and containing capital employed has enabled
the company to reduce its borrowings by more than Rs.100 crores and generate net cash inflow of
Rs.232 crores.As on 31st March 2010, there were no fixed deposits held by the Company from the
public, shareholders and employees other than unclaimed deposits amounting to Rs.0.08 crores.
Titan Industries has reported a sales turnover of Rs 1,252.82 crore and a net profit of Rs 81.28 crore
and For the quarter ended Jun 2009 the sales turnover was Rs 882.92 crore and net profit was Rs
46.04 crore.
6
Figure 1-1 – Maintaining leadership in domestic market
Figure 1-2 – Financial Snapshot
D A T E S T O C BK 7
1.2 Timex watches
Timex Group USA, Inc. (formerly known as Timex Corporation), a subsidiary of Timex Group
B.V., is headquartered in Middlebury, Connecticut. The company is the current day successor to the
Waterbury Clock Company, founded in 1854 in nearby Waterbury, Connecticut.
The Comp. was incorporated on 4th October, & received the Certificate of Commencement of
Business on 5th January 1989. The Comp. was originally established as a joint venture between
Timex Group Limited, Bermuda & Jayna Times Industries Limited, an Indian company. The Timex
Jayna Ltd., was set up with the intention to manufacture of components & to assemble, 2 million
quartz analog watcher per annum.
On the financial front, total income of the Company grew by 19.2 per cent from Rs.10,517 crores in
previous year to Rs. 12,540 crores during 2008-09. The Company posted a Profit after tax (PAT) of
Rs. 1,282 crores, compared to Rs. 968 crores in the previous fiscal, a growth of 32 per cent. The
Company's earnings before interest depreciation and taxes (EBITDA) margins increased from 13.33
per cent in 2007-08 to 14.16 per cent in2008-09. The improvements on the margins was
accomplished through better sales realizations, effective cost rationalization measures which
included better control over material cost, marketing cost and overheads, apart from sharp focus on
operational efficiencies
Timex Group India reported net loss of Rs 2.55 crore in the quarter ended March 2010 as against
net loss of Rs 2.01 crore during the previous quarter ended March 2009. Sales rose 14.14% to Rs
27.52 crore in the quarter ended March 2010 as against Rs 24.11 crore during the previous quarter
ended March 2009
For the audited full year, net profit declined 37.85% to Rs 4.63 crore in the year ended March 2010
as against Rs 7.45 crore during the previous year ended March 2009. Sales rose 4.43% to Rs 135.59
crore in the year ended March 2010 as against Rs 129.84 crore during the previous year ended
March2009.
Figure 1-3 – Financial Snapshot for Timex
8
Figure 1-4 – EPS and DPS for Timex
9
1.3 Titan and Timex Cost of Finished Goods For last 3 years
As described in Fig 1-3 , following method is used to derive Cost of finished goods
Figure 1-5 – Formula for price of finished goods
Table 1-1 –price of finished goods for Titan India
10
From table-1-1 and table 1-2 are indicating Cost of finished goods. Required Info Is collected from
Money control website.
Table 1-2 –price of finished goods for Timex India
1.4 Volume produced By Titan and Timex India

Finished Products Mar 2008 Mar-09 Mar-10
Product Name
Quantity Quantity Quantity
Watches 11,036,354.00 11,044,932.00 13,012,463.00
(million)
Table 1-3 –Volume produced by Titan India
Finished Products Mar-08 Mar-09 Mar-10

Product Name
Quantity Quantity Quantity
Watches (Thhousands) 1,663.00 1,757.00 1,691.00
Table 1-4 –Volume produced by Timex India
11
1.5 Average Market Price for Titan and Timex India
Figure 1-6 –Average Market Price for Titan Open

High
1.6 Total Volume produced by Titan and Timex Compare to market
Low
Last Pr
.
Table 1-5 –Volume produced by Titan(left) and Timex(Right) Watches
12
2 Break Even Analysis:
The break-even point is the point at which revenue is exactly equal to costs. At this point, no profit
is made and no losses are incurred. The break-even point can be expressed in terms of unit sales or
dollar sales. That is, the break-even units indicate the level of sales that are required to cover costs.
Sales above that number result in profit and sales below that number result in a loss. The break-even
sales indicate the dollars of gross sales required to break-even. Equation for BEP is defined in Fig2-
1and 2-2
Figure 2-1 – Equation for BEP
Figure 2-2 – Equation for BE Sales

Assumptions :
1) Selling price and cost remain constant per unit of output.

2) In the short run fixed costs are constant total amount whereas unit cost changes with output
level.
Mathematical Formula – CVP :
Net profit = ( units sold * unit selling price ) – [ ( unit sold * unit variable cost ) + Total fixed
cost ]
NP = Px – ( a + bx )
Where NP = Net Profit

x = Units Sold
P = selling price
b = unit variable cost
a = total cost
BE Point : a + bx = Px – NP
13
BEF = Fixed Cost / Contribution per unit
Unit sold for target profit = ( FC + target profit )
-------------------------
Contribution per unit
Profit volume ratio ( P / V ratio ) = Contribution * 100

------------------------
Sales
NP = Sales revenue * P/V ratio – Fixed Costs
BEP = FC / P / V Ratio
Margin of Safety = Expected sales – Breakeven Sales
14
2.1 Titan Watches India Break-Even Analysis:
Break even analysis can be done by using Profit and Loss Statement (Annexure-2) Break even
analysis has major component for units and Price . I have assumed specific % for Variable cost and
Fixed Cost and same details are updated in table 2-1.
Table 2-1 –Variable and Fixed Cost for Titan India
2.1.1 For Year 2008 for Titan Industries
Total Contribution = Sales – Variable Cost

= 3098.20 – 2571.06
= 527.14
P/V Ratio = Contribution * 100 / Sales
Component
= 527.14 * 100 /3098.20
= 17.01 %
B.E.P for Price = Fixed Cost / ( P/V Ratio)

= 467.742 / 17.01
Raw Materials
= 27.49
B.E.P for units = Fixed Cost / ( Contribution / Unit )

= 467.742 / 0.00004238
= 11036272 Million
Power & Fuel Cost

Safety Margin = Expected Sale – B.E Sales
= 11036354 – 11036272
= 82 ( million ) units
Employee Cost 15

= 3926.09 – 3111.27
= 814.82

= 814.82 * 100 / 3926.09
= 20.75 %

= 584.817 / 20.75
= 28.18
B.E.P for units = Fixed Cost / (Contribution / Unit )

= 584.817 / 0.00005
= 11044826 Million units

= 11044932 – 11044826

= 4703.12 – 3746.664
= 956.456

= 956.456 * 100 / 4703.12
= 20.33 %

= 635.816 / 20.33
= 31.26
16
B.E.P for units = Fixed Cost / (Contribution /Unit )
= 635.816 / 0.000048
= 13012109

= 13012463 – 13012109
Break Even Analysis for Timex India
Table 2-2 –Variable and Fixed Cost for Timex India
2.1.4 For Year 2008 for Timex Industries

= 133.29 – 149.75
= 16.46

= ( 133.29 – 149.75 ) * 100 / 133.29
= 16.46 * 100 /133.29
= 12.04 %
Component
= 336.375 / 12.04
= 27.93
Raw Materials
= 336.375 / 0.20
= 1642.00 thousand units
Power & Fuel Cost 17

= 1663 – 1642
= 21 ( thousands ) units

= 132.19 – 166.471
= 34.281

= 34.281 * 100 /132.19
= 25.93 %

= 419.71 / 25.93
= 16.18

= 419.71 / 0.24
= 1748 thousand Units

= 1757 – 1748

= 137.66 – 184.52
= 46.86

= 46.86 * 100 /137.66
= 34.04 %

= 439.3805 / 34.04
18
= 12.90

= 439.38 / 0.26
= 1689.92 thousand units

= 1691 – 1689
19
3 Ratio - Analysis
3.1.1 Ratio Analysis for Titan Industries
Ratio Analysis is done by using Balance Sheet of respective Companies.
3.1.1.1 Gross profit ratio = Gross profit * 100 / Sales

2008 = 265.28 * 100 / 3098.20
= 8.56 %
2009 = 346.68 * 100 / 3926.09

= 8.83 %
2010 = 436.30 * 100 / 4703.12

= 9.27 %
Analysis- Continuous increase in GFR indicates that Titan industries is Positive growth by
approximate 0.33 %
3.1.1.2 Net profit ratio = PAT * 100 / Sales

2008 = 150.27 * 100 / 3098.20
= 4.85 %
2009 = 158.96 * 100 / 3926.09

= 4.04 %
2010 = 250.32 * 100 / 4703.12

= 5.32 %
3.1.1.3 Liquidity Ratio = Current Asset / Current Liability

2008 = 1280.70 / 694.06
= 1.84
2009 = 1492.42 / 726.65

= 2.05
2010 = 1821.65 / 797.17

= 2.28
20
Analysis – Liquidity Ratio industry recommends as 1:2 . but Titan Industries having ratios as 1:
2.05 and 1 : 2.28 which indicates that Current Assets are not properly managed.
3.1.1.4 Liquid Ratio = ( Current Asset – stock ) / Current Liabilities

2008 = (1280.79 – 1021.09 ) / 916.58
= 0.28
2009 = ( 1492.42 – 1202.69 ) / 1067.44

= 0.27
2010 = ( 1821.65 – 1340.33 ) /1307.02

= 0.36
Analysis - Liquid ratio is highly affected by stock or inventory .Due to less sale stock is stored in
Godown and it is affecting liquid ratio for the next year .so stock has to handle by company more
effectively.
3.1.1.5 Stock Turnover Ratio = COGS / Inventory

2008 = 3098.20 / 1021.09
= 3.03
2009 = 3926 .09 / 1202.69

= 3.264
2010 = 4703.12 /1340.33

= 3.508
3.1.1.6 Debtors Turnover ratio = Credit Sales / Debtors

2008 = 3098.20 / 96.45
= 32.12 Times
Number of Days = 365 / 32.12
Number of Days = 11.36 days
2009 = 3926.09 / 106.22

= 39.96 Times
2010 = 4703.12 / 93.61

= 50.24 Times
21
Analysis – As D.T.R increases Profitability is decreases and sale price increases which can
increase loan . so for Titan its decreasing which mean profitability is increasing and sale price
is decreasing.
3.1.1.7 Creditors Turnover Ratio = Credit Purchase / Creditors

2008 = 2431.79 / 842.68
= 2.88 Times
Number of Days = 126.73
2009 = 2940.86 / 974

= 3.01 Times
2010 = 3561.05 / 1172.28

= 3.03 Times
Analysis – As we can observe from above calculation that CTR is decreasing which indicates that
titan industries are able to repay and due to this interest amount paid by them is also decreasing
which results in Profitability
3.1.1.8 Debt Equity Ratio = Debt / Equity

Debt = Security Loans + Unsecured Loans
Equity = Shared capital + Reserves and Surplus
2008 = 257.89 / 436.17

= 0.59
2009 = 175.41 / 551.24

= 0.31
2010 = 72.79 / 724.38

= 0.10
Analysis - Due to decrease in Secured and non secured Loan every year This ratio also indicates
positive sign for Titan Industries.
3.1.1.9 Working Capital Turnover Ratio = COGS / CWP
2008 = 257.89 / 9.99

= 25.81 Times
22
2009 = 175.41 / 19.52

= 8.98 Times
2010 = 72.79 / 12.29

= 5.92 Times
3.1.1.10 Financial Leverage = PBIT / PBT
2008 = 260.89 / 221.45

= 1.17 Times
2009 = 340.77 / 272.31

= 1.25 Times
2010 = 444.92 / 381.40

= 1.16 Times
23
3.1.2 Ratio Analysis for Timex Industries
3.1.2.1 Gross profit ratio = Gross profit * 100 / Sales
2008 = 9.24 * 100 / 133.29

= 6.93 %
2009 = 8.76 * 100 / 132.19

= 6.62 %
2010 = 3.83 * 100 / 137.66

= 2.78 %
Analysis – Timex India has reduced gross profit by 3.84% compare to last year.
3.1.2.2 Net profit ratio = PAT * 100 / Sales

2008 = 5.45 * 100 / 133.29
= 4.08 %
2009 = 7.45 * 100 / 132.19

= 5.63 %
2010 = 4.62 * 100 / 137.66

= 3.35 %
Analysis- Again Negative Sign for Timex , Net profit is decreased by 2.28%
3.1.2.3 Liquidity Ratio = Current Asset / Current Liability

2008 = 74.78 / 48.66
= 1.53
2009 = 90.85 / 45.57

= 1.99
2010 = 106.38 / 57.98

= 1.83
Liquidity ratio as per industry standard is 1:2 and Timex able to manage below 2 as compare to
titan industries .that indicates that they are able to manage current asset significantly.
24
3.1.2.4 Liquid Ratio = ( Current Asset – stock ) / Current Liabilities
2008 = ( 74.78 – 19.99 ) / 48.66
= 1.12
2009 = ( 90.85 – 24.87 ) / 45.57

= 1.44
2010 = ( 106.38 – 32.37 ) / 57.98

= 1.27
3.1.2.5 Stock Turnover Ratio = COGS / Inventory

2008 = 133.29 / 19.99
= 6.67
2009 = 133.19 / 24.87
= 5.35
2010 = 137.66 / 32.37
= 4.25
3.1.2.6 Creditors Turnover Ratio = Credit Purchase / Creditors
2008 = 65.84 / 48.66

= 1.35 Times
2009 = 65 / 45.57
= 1.42 Times
2010 = 80.12 / 57.98

= 1.38 Times
Analysis – Timex is Paying high interest rate due CTR. Which can affect their profitability and in
turn need more loan .
3.1.2.7 Debtors Turnover ratio = Credit Sales / Debtors

2008 = 133.29 / 49.58
= 2.68 Times
Number of days = 136.19 days
2009 = 132.19 / 60.3

25
= 2.19 Times
2010 = 137.66 / 62.81
= 2.19 Times
Number of days = 166.67
3.1.2.8 Debt Equity Ratio = Debt / Equity
Debt = Security Loans + Unsecured Loans
Equity = Shared capital + Reserves and Surplus
2008 = 0.45 / 51.42

= 0.00875
2009 = 6.03 / 58.87

= 0.102
2010 = 0 / 60.28
= 0
Conclusion – Titan Industry India is financially well established as compare to Timex
26
Annexure -1 Balance Sheet For Titan.
Titan Industries
Balance Sheet of Titan
Industries
Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths
Sources Of Funds
Total Share Capital 44.39 44.39 44.39
Equity Share Capital 44.39 44.39 44.39
Share Application Money 0 0 0
Preference Share Capital 0 0 0
Reserves 391.78 506.85 679.99
Revaluation Reserves 0 0 0
Networth 436.17 551.24 724.38
Secured Loans 188.11 116.76 72.79
Unsecured Loans 69.78 58.65 0
Total Debt 257.89 175.41 72.79
Total Liabilities 694.06 726.65 797.17
Mar '08 Mar '09 Mar '10
Application Of Funds
Gross Block 558.07 593.04 624.33
Less: Accum. Depreciation 285.61 318.56 361.7
Net Block 272.46 274.48 262.63
Capital Work in Progress 9.99 19.52 12.29
Investments 47.39 7.66 7.63
1,021.0 1,202.6
Inventories 9 9 1,340.33
Sundry Debtors 96.45 106.22 93.61
Cash and Bank Balance 51.91 54.69 61.72
1,169.4 1,363.6
Total Current Assets 5 0 1,495.66
Loans and Advances 111.34 128.82 200.99
Fixed Deposits 0 0 125
1,280.7 1,492.4
Total CA, Loans & Advances 9 2 1,821.65
Deffered Credit 0 0 0
Current Liabilities 842.68 974 1,172.28
27
Provisions 73.9 93.44 134.74
1,067.4
Total CL & Provisions 916.58 4 1,307.02
Net Current Assets 364.21 424.98 514.63
Miscellaneous Expenses 0 0 0
Total Assets 694.05 726.64 797.18
Contingent Liabilities 58.41 65.46 72.19

Book Value (Rs) 98.26 124.18 163.19
Annexure -2 Profit and Loss statement for Titan

Profit & Loss account of Titan
Industries
Mar '08 Mar '09 Mar '10
Income
3,098.2 3,926.0
Sales Turnover 0 9 4,703.12
Excise Duty 47.35 44.34 28.7
3,050.8 3,881.7
Net Sales 5 5 4,674.42
Other Income -4.39 -5.91 8.62
Stock Adjustments 297.89 178.67 111.66
3,344.3 4,054.5
Total Income 5 1 4,794.70
Expenditure
2,431.7 2,940.8
Raw Materials 9 6 3,561.05
Power & Fuel Cost 13.9 16.11 17.47
Employee Cost 189.66 234.2 275.64
Other Manufacturing Expenses 5.96 8.99 6.11
Selling and Admin Expenses 358.05 427.47 458.69
Miscellaneous Expenses 84.12 86.2 30.86
Preoperative Exp Capitalised -0.02 -0.09 -0.04
3,083.4 3,713.7
Total Expenses 6 4 4,349.78
Mar '08 Mar '09 Mar '10
Operating Profit 265.28 346.68 436.3

PBDIT 260.89 340.77 444.92
28
Interest 39.44 68.46 63.52
PBDT 221.45 272.31 381.4
Depreciation 29.73 41.76 60.08
Other Written Off 0 0 0
Profit Before Tax 191.72 230.55 321.32
Extra-ordinary items 2.57 -10.92 -2.92
PBT (Post Extra-ord Items) 194.29 219.63 318.4
Tax 44.02 60.68 68.08
Reported Net Profit 150.27 158.96 250.32
Total Value Addition 651.68 772.88 788.73
Preference Dividend 0 0 0
Equity Dividend 35.51 44.39 66.58
Corporate Dividend Tax 6.04 7.54 11.06
Per share data (annualised)
Shares in issue (lakhs) 443.89 443.89 443.89
Earning Per Share (Rs) 33.85 35.81 56.39
Equity Dividend (%) 80 100 150
Book Value (Rs) 98.26 124.18 163.19
Annexure – 3 balance Sheet For Timex
Timex Group India

Balance Sheet of Timex Group
India
Mar Mar Mar
'08 '09 '10
12 12 12
mths mths mths
Sources Of Funds
Preference Share Capital 41.1 41.1 41.1
Reserves 0.22 7.67 9.08
Networth 51.42 58.87 60.28
Secured Loans 0 0 0
Total Debt 0.45 6.03 0
29
Mar Mar Mar
'08 '09 '10
12 12 12
mths mths mths
Gross Block 61.26 35.54 34.68
Net Block 19.84 14.57 12.76
Capital Work in Progress 0 0.21 0.26
Investments 0 0 0
Inventories 19.99 24.87 32.37
Sundry Debtors 49.58 60.3 62.81
Total Current Assets 74.78 90.85 106.38
Fixed Deposits 4.02 0.02 0
Total CA, Loans & Advances 85.57 101.41 116.36
Current Liabilities 48.66 45.57 57.98
Provisions 4.91 5.72 11.13
Total CL & Provisions 53.57 51.29 69.11
Net Current Assets 32 50.12 47.25
Total Assets 51.84 64.9 60.27

Book Value (Rs) 1.02 1.76 1.9
Annexure -4 Profit and Loss Statement For Timex.
Timex Group India

Balance Sheet of Timex Group
India
Mar Mar Mar
'08 '09 '10
12 12 12
mths mths mths
Sources Of Funds
Preference Share Capital 41.1 41.1 41.1
30
Reserves 0.22 7.67 9.08
Networth 51.42 58.87 60.28
Secured Loans 0 0 0
Total Debt 0.45 6.03 0
Mar Mar Mar
'08 '09 '10
12 12 12
mths mths mths
Gross Block 61.26 35.54 34.68
Net Block 19.84 14.57 12.76
Capital Work in Progress 0 0.21 0.26
Investments 0 0 0
Inventories 19.99 24.87 32.37
Sundry Debtors 49.58 60.3 62.81
Total Current Assets 74.78 90.85 106.38
Fixed Deposits 4.02 0.02 0
Total CA, Loans & Advances 85.57 101.41 116.36
Current Liabilities 48.66 45.57 57.98
Provisions 4.91 5.72 11.13
Total CL & Provisions 53.57 51.29 69.11
Net Current Assets 32 50.12 47.25
Total Assets 51.84 64.9 60.27

Book Value (Rs) 1.02 1.76 1.9
References
1) Class notes and Guidance From Ajay Nair
2) Accounting and Marketing principle – Books
http://www.principlesofaccounting.com/chapter%2017.htm
http://www.investopedia.com/terms/a/averagesellingprice.asp
31
http://money.rediff.com/companies/titan-ltd/10510008/balance-sheet
http://money.rediff.com/companies/timex/10540005/balance-sheet
32

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APPENDIX – 1

Title : Financial Analysis for Titan and Timex

Subject : Cash Flow and Balance Sheet Analysis as

Level / Semester : I / Semester I

Programme : GPBL(MBA) Part Time

Subject Tutor : Prof. Augustine

Name of Student : Mr. Ranjeet B. Taloskar

Student’s Registration Number : GBPT/F10/10

Date of Submission : 22-08-2010

Word Count : 2162 words

Word Limit : 2000 words.

Student Name Mr. Ranjeet B. Taloskar

Signature of the student Date:

1 Market History Details and Current Finance Status as Analyst........................................................6

1.1 Titan watches

Figure 1-2 – Financial Snapshot

Figure 1-3 – Financial Snapshot for Timex

Figure 1-5 – Formula for price of finished goods

Table 1-1 –price of finished goods for Titan India

Table 1-2 –price of finished goods for Timex India

1.4 Volume produced By Titan and Timex India

Table 1-3 –Volume produced by Titan India

Finished Products Mar-08 Mar-09 Mar-10

Figure 1-6 –Average Market Price for Titan Open

Table 1-5 –Volume produced by Titan(left) and Timex(Right) Watches

Figure 2-1 – Equation for BEP

Figure 2-2 – Equation for BE Sales

1) Selling price and cost remain constant per unit of output.

Mathematical Formula – CVP :

Where NP = Net Profit

Profit volume ratio ( P / V ratio ) = Contribution * 100

NP = Sales revenue * P/V ratio – Fixed Costs

Margin of Safety = Expected sales – Breakeven Sales

Table 2-1 –Variable and Fixed Cost for Titan India

2.1.1 For Year 2008 for Titan Industries

Total Contribution = Sales – Variable Cost

P/V Ratio = Contribution * 100 / Sales

B.E.P for Price = Fixed Cost / ( P/V Ratio)

B.E.P for units = Fixed Cost / ( Contribution / Unit )

Power & Fuel Cost

Total Contribution = Sales – Variable Cost

P/V Ratio = Contribution * 100 / Sales

B.E.P for Price = Fixed Cost / ( P/V Ratio)

B.E.P for units = Fixed Cost / (Contribution / Unit )

Safety Margin = Expected Sale – B.E Sales

2.1.3 For Year 2010 for Titan Industries

P/V Ratio = Contribution * 100 / Sales

B.E.P for Price = Fixed Cost / ( P/V Ratio)

Safety Margin = Expected Sale – B.E Sales

Break Even Analysis for Timex India

Table 2-2 –Variable and Fixed Cost for Timex India

2.1.4 For Year 2008 for Timex Industries

P/V Ratio = Contribution * 100 / Sales

Power & Fuel Cost 17

2.1.5 For Year 2009 for Timex Industries

Total Contribution = Sales – Variable Cost

P/V Ratio = Contribution * 100 / Sales

B.E.P for Price = Fixed Cost / ( P/V Ratio)

B.E.P for units = Fixed Cost / ( Contribution / Unit )

Safety Margin = Expected Sale – B.E Sales