Mittal School of Business (Msob)

MITTAL SCHOOL OF BUSINESS (MSOB)
COURSE TITLE: ACC306: Financial Statement Analysis
ACADEMIC TASK – 2
NAME: Aman Chamoli
REG. NO.: 11914011
SUBMITTED TO: Mrs. Anjali Sharma

RUBRIC
ACC306: Financial Statement Analysis
EVALUATION CRITERIA FAILS TO MEET MEETS EXCEEDS SCORE

EXPECTATIONS EXPECTATIONS EXPECTATION
Comment and analyse the (0-5 Marks) (5-10 Marks) (10-15 Marks)
Capital Structure of the Incorrect or Correct data used Correct data used
company through Leverage inappropriate data with minimal errors without any errors
Analysis. used. and some analysis. and proper
a) Debt-Equity analysis is done.
b) Debt-Ratio
c) Proprietary Ratio
[Calculation 7.5 marks and 7.5
marks analysis]
Comment upon how the company is (0-3 marks) (3-7 marks) (7-10 marks)
managing its Receivables and Incorrect or Correct data used Correct data used
Payables. inappropriate data with minimal errors without any errors
a) Debtors Turnover Ratio used. and some analysis. and proper
b) Collection Period
analysis is done.
c) Creditors Turnover Ratio
d) Payment Period
(2.5 X 4 = 10 marks)
3. Competitor Analysis on basis of (0-1 marks) (1-3 marks) (3-5 marks)

Receivable Management in same Incorrect or Correct data used Correct data used
Industry (at least one competitor) inappropriate data with minimal errors without any errors
(5 marks) used. and some analysis. and proper
analysis is done.
 Company Profile
Oricon Enterprises Limited, the Flagship Company of Parijat Enterprises is engaged in

the business of manufacturing and marketing of Packaging Products, viz. metal caps &
closures including crown caps, plastic closures, roll over pilfer proof caps (ROPP caps),
twist off caps and aluminium collapsible tubes, pre-forms, liquid colorants, petrochemical
products. Also, it is in the process of development of its Land at Worli via Joint
Development Agreement with IndiaBulls Infraestate Limited. The Company also has a
major subsidiary United Shippers Limited which is engaged in the business of Marine
Logistics.
During the year 2018-19, the Consolidated Turnover of the Company was 1,156.52
crores and Profit After Tax was 40.33 Crores.
 Mission and Vision

"To enhance shareholder value by diversifying into business segments which are
futuristic, growth oriented and scaleable in nature"
 Business of the company
The company is engaged in the business of manufacturing petrochemical products and
developing real estate.
Subsidiaries
 Oriental Containers
 USL Shinrai Automobiles
 USL Auto Services
Group Companies
 Kopran
 United Shippers
 Shri Vindhya Paper Mills
 G Claridge & Company
 Excel Glasses
 Shinrai Toyota
 Claridge Moulded Fibre
 BOARD OF DIRECTORS
MR. SUSHEEL G. SOMANI Chairman
MR. RAJENDRA SOMANI Managing Director
MR. ADARSH SOMANI Joint Managing Director
MR. VINOD MIMANI Independent Director
MR. K.G. GUPTA Independent Director
MR. N. GANGA RAM Independent Director
MRS. SUJATA PAREKH KUMAR Director
MR. VARUN SOMANI Director
MR. VIJAY BHATIA Independent Director
MRS. MAMTA BIYANI Independent Director
MR. VIKRAM PAREKH Independent Director
 Competitors of Oricon Enterprises Limited
 Grasim: Grasim Industries Limited, a flagship company of the global

conglomerate Aditya Birla Group, ranks amongst the top publicly
listed companies in India. Incorporated in 1947, it started as a textiles
manufacturer in India. Today, it has evolved into a leading diversified
player with leadership presence across many sectors. It is a leading
global producer of Viscose Staple Fibre, the largest Chlor-Alkali,
Linen and Insulators player in India. Through its subsidiaries,
UltraTech Cement and Aditya Birla Capital, it is also India’s largest
cement producer and a leading diversified financial services player. At
Grasim, there is an endeavour to create sustainable value for 24,000+
employees, 230,000+ shareholders, society and customers. It has a
consolidated net revenue of over US$ 10.95 Billion and an EBITDA
of over US$ 1.95 Billion in FY 2020.
 Piramal Enterprises: The Piramal Group is a diversified global
business conglomerate, that has presence across various sectors such
as healthcare, life sciences, drug discovery, healthcare information
management, specialty glass packaging, financial services and real
estate.
 Alembic Ltd:
1) Pharmaceuticals
Manufacturing and marketing of fermentation and chemistry based Active
Pharmaceuticals Ingredients (API). The Company is also engaged in Research and
Development activity at Vadodara.
2) Real Estate:
Construction of residential & commercial real estate projects and project
management and marketing consultancy. The Company has also given certain
commercial properties on lease basis to various tenants.
 Leverage Analysis.
d) Debt-Equity
e) Debt-Ratio
f) Proprietary Ratio
 Debt-Equity :Debt to equity ratio is calculated by dividing total liabilities by stockholder's

equity. The numerator consists of the total of current and long term liabilities and the
denominator consists of the total stockholders' equity including preferred stock.
Formula :
DEBT EQUITY RATIO = Debt
Equity
Year 2019 2020

Debt 52568 33044
Equity 69481.189 69825.8
DEBT EQUITY RATIO .75 .47
Analysis: As the debt equity ratio has decreased from .75 to .47. A lower debt to
equity ratio usually implies a more financially stable business. Companies with a
higher debt to equity ratio are considered riskier to creditors and investors than
companies with a lower ratio
 Debt-Ratio: Debt Ratio Debt ratio (also known as debt-to-assets ratio) is a ratio which
measures debt level of a business as a percentage of its total assets. It is calculated by
dividing total debt of a business by its total assets.
Formula:
Debt-Ratio = Total debts
Total Assets
Year 2019 2020

Total debts 52568 33044
Total assets 122050.08 102870.64
Debt ratio 2.32 3.11
Analysis: As the ratio is icreasing The company can issue new or additional shares to
increase its cash flow. This cash can be used to repay the existing liabilities and in turn,
reduce the debt burden. The reduction in debt will lower the debt to total asset ratio.
 Proprietary Ratio: The proprietary ratio (also known as net worth ratio or equity ratio)
is used to evaluate the soundness of the capital structure of a company. It is computed
by dividing the stockholders’ equity by total assets.
 Proprietary-Ratio = Shareholders fund
Total Assets
Year 2019 2020

Shareholders fund 52568 33044
Total assets 122050.08 102870.64
Proprietary-Ratio 2.32 3.11
Analysis: As there is increase in the ratio A higher equity ratio or

a higher contribution of shareholders to the capital indicates a company's better long-
term solvency position. A low equity ratio, on the contrary, includes higher risk to the
creditors.
 Receivables and Payables.
e) Debtors Turnover Ratio
f) Collection Period
g) Creditors Turnover Ratio
h) Payment Period
 Debtors Turnover Ratio: The Debtors Turnover Ratio also called as

Receivables Turnover Ratio shows how quickly the credit sales are converted into the
cash. This ratio measures the efficiency of a firm in managing and collecting the
credit issued to the customers.
Year 2019 2020

Net credit sales 62395 57224
Average trade receivables 9489 7534
Proprietary-Ratio 6.57 7.5
Analysis: As the debtors turnover ratio is increasing. the higher the value of debtors
turnover the more efficient is the management of debtors/sales or more liquid are the
debtors. Similarly, low debtors turnover implies inefficient management of debtors/sales and
less liquid debtors.
 Collection Period: A collection period is the average number of days required to

collect receivables from customers. It is measured as the interval from the issuance of
an invoice to the receipt of cash from the customer.
Formula
Collection Period= 365 /Debtor Turnover Ratio
 2019- 55.5
 2020 - 48.6
PAYMENT MANAGEMENT-
Account payable management refers to the practices, procedures, and policies

used by a company with respect to managing trade credit purchases. These tasks
involve: Seeking trade credit lines. Acquiring favourable terms of purchase.
Managing the timing and flow of purchase.
 CREDIT TURNOVER RATIO: creditors turnover ratio is a measure of

how often a particular company pays off its debts to suppliers within a
given accounting period. This relates back to the more general term
'credit turnover' which simply means the number of total transactions
made during a particular time frame.
 Credit Turnover Ratio= Net Credit Purchase /Average Trade Payable.
Year 2019 2020
Net credit purchase 24392 26203
Average trade payables 4692 5901
5.1 4.4
Analysis: The company’s creditors turnover ratio is low which indicates that the company
doesn’t pay off its debts at a desirable rate. The ratio has been constant over the past two
years i.e., 2019 and 2020.
 PAYMENT PERIOD: The payment period is the period of time from the point a
debt is incurred to the due date of the repayment. The average payment period is the
average time a company takes to make payments to its creditors. ... With mortgage
payments, the payment period is also usually a month, although with some it can be
biweekly.
Payment Period= Average Account Payable/ Total Credit Purchase/ 365.
 2020 ATP= 223.15 ,TCP= 1649.10

223.15 X 365 /1649.10 = 49.39
 2019 ATP= 213.45 TCP= 1486.50 =
213.45 X 365 1486.50 = 52.41

Mittal School of Business (Msob)

Uploaded by

Copyright:

Available Formats

Mittal School of Business (Msob)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mittal School of Business (Msob)

Uploaded by

Copyright:

Available Formats

MITTAL SCHOOL OF BUSINESS (MSOB)

COURSE TITLE: ACC306: Financial Statement Analysis

NAME: Aman Chamoli

REG. NO.: 11914011

SUBMITTED TO: Mrs. Anjali Sharma

ACC306: Financial Statement Analysis

EVALUATION CRITERIA FAILS TO MEET MEETS EXCEEDS SCORE

3. Competitor Analysis on basis of (0-1 marks) (1-3 marks) (3-5 marks)

Oricon Enterprises Limited, the Flagship Company of Parijat Enterprises is engaged in

 Mission and Vision

 Competitors of Oricon Enterprises Limited

 Grasim: Grasim Industries Limited, a flagship company of the global

 Debt-Equity :Debt to equity ratio is calculated by dividing total liabilities by stockholder's

Year 2019 2020

Year 2019 2020

Year 2019 2020

Analysis: As there is increase in the ratio A higher equity ratio or

 Debtors Turnover Ratio: The Debtors Turnover Ratio also called as

Year 2019 2020

less liquid debtors.

 Collection Period: A collection period is the average number of days required to

Collection Period= 365 /Debtor Turnover Ratio

Account payable management refers to the practices, procedures, and policies

 CREDIT TURNOVER RATIO: creditors turnover ratio is a measure of

Payment Period= Average Account Payable/ Total Credit Purchase/ 365.

 2020 ATP= 223.15 ,TCP= 1649.10

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.