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COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR 2010-11 TO 2011-12

Particulars
Sources of funds share holders funds
Capital
Reserves and Surpluses
Deferred revenue on account against
depreciation
LOAN FUNDS
Secured Loans
Unsecured Loans
Deferred tax liability (NET)
Less: Recoverable
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross block
Less: Depreciation
Net Block
Capital work in progress
Construction stores & advances
Investments
Current assets loan & advances
Inventories
Sundry debtors
Cash & Bank balances
Other current assets
Loans & Advances

2010-2011

2011-12

Change

(Rupees)

(Rupees)

Amount

Percentage
(%)

82455
361132
443587
4408

82455
403513
485968
6567

42381
42381
2159

11.7
9.6
49.0

57327
144646
206381
53224
53223
1
649968

68229
176615
251411
54427
54426
1
737379

10902
31969
45030
1203
1203
87411

19.0
22.1
21.8
2.3
2.3
13.4

460396
299501
160895
103999
32341
297235
192891

507273
250792
256481
128567
39825
424873
160943

46877
(48709)
95586
24568
7484
127638
(31948)

10.2
(16.3)
59.4
23.6
23.1
23.1
(16.6)

23405
8679
84714
10161
30287
157246

25102
12583
133146
10580
40476
221887

1697
3904
48432
419
10189
64641

7.3
45.0
57.2
4.1
33.6
41.1

49102
12300
61402

54221
16042
70236

5119
3742
8861

10.4
30.4
14.4

Less: Current liabilities and


provisions
Liabilities
Provisions

Net Current Assets


Total

95844
649968

151624
737379

55780
87411

58.2
13.4

Interpretation:
1. The company balance sheet of the company during the year 2009-10 reveals that the
current assets have increased by 64641 i.e. 41.1%.
2. There is increase in current assets we can say the short term solvency of the company is
good.
3. The current liabilities have increase by 8861 i.e. 14.4%.
4. Fixed assets have increased by 127638 i.e. 42.9%
5. There is increase in share holder funds of company that is why we can say the long term
solvency of the company is good satisfaction.

COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR 2011-12 TO 2012-13


Particulars
Sources of funds share holders funds
Capital
Reserves and Surpluses

2011-2012

2012-13

Change

(Rupees)

(Rupees)

Amount

Percentage
(%)

82455
335308
417763
3374

82455
361132
443587
4408

25824
25824
1034

7.7
6.2
30.6

44407
26471
74252
50570
50569
1
492015

57327
144646
206381
53224
53223
1
649968

12920
118175
118175
2654
2654
157953

29.1
446.4
177.9
5.2
5.2
32.1

Investments

431062
207914
223148
67063
67063
322433
207977

460396
299501
160895
103999
32341
297235
192891

29334
91587
(62253)
36936
119
(25198)
(15086)

6.8
44.1
(27.9)
55.1
0.4
(7.8)
(7.3)

Current assets loan & advances


Inventories
Sundry debtors
Cash & Bank balances

17777
13747
60783

23405
8679
84714

5628
(5068)
23931

31.7
(36.9)
39.4

Deferred revenue on account against


depreciation
LOAN FUNDS
Secured Loans
Unsecured Loans
Deferred tax liability (NET)
Less: Recoverable
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross block
Less: Depreciation
Net Block
Capital work in progress
Construction stores & advances

Other current assets


Loans & Advances

9714
27052
129073

10161
30287
157246

447
3235
28173

4.6
12.0
21.8

52306
15161
67467
61606
492015

49102
12300
61402
95844
649968

3204
2861
6065
34238
157953

6.1
18.9
9.0
55.6
32.1

Less: Current liabilities and


provisions
Liabilities
Provisions
Net Current Assets
Total

Interpretation:
1. The company balance sheet of the company during the year 2008-09 reveals that the
current assets have increased by 28172 i.e. 22%.
2. There is increase in current assets we can say the short term solvency of the company is
good.
3. The current liabilities have increase by 6065 i.e. 9.00%.
4. Fixed assets have decreased by -25198 i.e. -7.8%
5. There is increase in share holder funds of company that is why we can say the long term
solvency of the company is good satisfaction.

COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR 2011-12 TO 2012-13


Particulars
Sources of funds share holders funds
Capital
Reserves and Surpluses
Deferred revenue on account against
depreciation
LOAN FUNDS
Secured Loans
Unsecured Loans
Deferred tax liability (NET)
Less: Recoverable
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross block

2011-2012

2012-13

Change

(Rupees)

(Rupees)

Amount

Percentage
(%)

78125
277376
355501
1591

82455
335308
417763
3374

4330
57932
62262
1783

5.5
20.9
17.5
112.1

45844
108684
156119
52280
82279
1
511620

44407
26471
74252
50570
50569
1
492015

(1437)
(82213)
(81867)
(1710)
(31710)
(19605)

(3.1)
(75.6)
(52.4)
(3.3)
(38.5)
(3.8)

400281

431062

30781

7.7

Less: Depreciation
Net Block
Capital work in progress
Construction stores & advances
Investments
Current assets loan & advances
Inventories
Sundry debtors
Cash & Bank balances
Other current assets
Loans & Advances

187736
212545
56413
18540
287498
173380

207914
223148
67063
67063
322433
207977

20178
10603
10650
13682
34935
34597

10.7
5.0
18.9
73.8
12.2
20.0

17380
4699
6091
80023
27275
135468

17777
13747
60783
9714
27052
129073

397
9048
54692
(70309)
(223)
(6395)

2.3
192.6
897.9
(87.9)
(0.8)
(4.7)

65244
15697
80941
54527
511620

52306
15161
67467
61606
492015

12938
536
(13474)
7079
(19605)

19.8
3.4
(16.6)
13.0
(3.8)

Less: Current liabilities and


provisions
Liabilities
Provisions
Net Current Assets
Total

Interpretation:
1. The company balance sheet of the company during the year 2007-08 reveals that the
current assets have increased by -6395 i.e. 4.7%.
2. There is increase in current assets we can say the short term solvency of the company is
good.
3. The current liabilities have increase by 13474 i.e. 16.6%.

4. Fixed assets have decreased by 34935 i.e. 12.15%


5. There is an increase in capital that is 4330 i.e.5.5%..

COMPARATIVE BALANCE SHEET ANALYSIS FOR THE YEAR 2010-11 TO 2011-12


Particulars
Sources of funds share holders funds
Capital
Reserves and Surpluses
Deferred revenue on account against

2010-2011

2011-12

Change

(Rupees)

(Rupees)

Amount

78125
237002
315127
271

78125
277376
355501
1591
7

40374
40374
1320

Percentage
(%)
17.0
12.8
487.1

depreciation
LOAN FUNDS
Secured Loans
Unsecured Loans
Deferred tax liability (NET)
Less: Recoverable
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross block
Less: Depreciation
Net Block
Capital work in progress
Construction stores & advances
Investments
Current assets loan & advances
Inventories
Sundry debtors
Cash & Bank balances
Other current assets
Loans & Advances

41226
90931
132428
44379
44378
1
447555

45844
108684
156119
52280
82279
1
511620

4618
17753
23691
7901
37901
64065

11.2
19.5
17.9
17.8
85.4
14.3

366106
167456
198650
51543
12320
262513
36674

400281
187736
212545
56413
18540
287498
173380

34175
20280
13895
4870
6220
24985
136706

9.3
12.1
7.0
9.4
50.5
9.5
372.8

17712
124349
5447
25149
21475
194132

17380
4699
6091
80023
27275
135468

(332)
(119650)
644
54874
5800
(58664)

(1.9)
(96.2)
11.8
218.2
27.0
(30.2)

32202
11648
43850
150282
447555

65244
15697
80941
54527
511620

(33042)
(4049)
37091
95755
64065

(102.6)
(34.8)
84.6
63.7
14.3

Less: Current liabilities and


provisions
Liabilities
Provisions
Net Current Assets
Total

Interpretation:

1. The company balance sheet of the company during the year 2012-13 reveals that the
current assets have increased by 58664 i.e. 30.2%.
2. There is increase in current assets we can say the short term solvency of the company is
good.
3. The current liabilities have increase by 37091 i.e. 84.6%.
4. Fixed assets have decreased by 24985 i.e. 9.5%
5. There is increase in share holder funds of company that is why we can say the long term
solvency of the company is good.

I.

LIQUIDITY RATIOS

CURRENT RATIO:

YEAR

Current Assets

Current Liabilities

Ratio

2008-09

160756

67324

2.39

2009-10

167799

48146

3.49

2010-11

194132

45850

4.23

2011-12

135468

80941

1.67

2012-13

159073

67467

2.36

Interpretation:

10

QUICK RATIO

YEAR

Quick Assets

Quick Liabilities

Ratio

2008-09

142400

67320

2.12

2009-10

147655

48140

3.07

2010-11

176420

45850

3.85

2011-12

118080

80946

1.46

2012-13

145650

67467

2.16

Interpretation:

11

LEVERAGED OR CAPITAL STRUCTURE RATIOS


DEBT & EQUITY RATIO:

YEAR

Long term
Liabilities

Shareholders fund

Ratio

2008-09

98047

258117

0.38

2009-10

115812

286453

0.4

2010-11

132157

315040

0.42

2011-12

138263

335501

0.41

2012-13

160878

417763

0.39

Interpretations:

12

PROPRIETARY RATIO:

YEAR

Net Worth

Total Assets

Ratio

2008-09

258117

423489

0.61

2009-10

280453

450411

0.62

2010-11

315040

493319

0.64

2011-12

355501

596346

0.6

2012-13

417763

659483

0.63

Interpretation:

13

FIXED ASSETS RATIO:

YEAR

Fixed Assets

Capital Employed

Ratio

2008-09

184450

174657

1.06

2009-10

177697

176781

1.01

2010-11

190019

198650

0.96

2011-12

188178

212545

0.89

2012-13

225069

223148

1.01

Interpretation

14

INTEREST COVERAGE/DEBT SERVICE RATIO:

YEAR

EBIT

Fixed Interest

Ratio

2008-09

51656

10918

4.73

2009-10

46201

8680

5.32

2010-11

47456

9916

4.79

2011-12

92594

33697

2.75

2012-13

77837

16958

4.59

Interpretation:

15

II.

ACTIVITY OR TURNOVER RATIOS

INVENTORY RATIO:

YEAR

Cost of Goods
Sold

Average Inventory

Ratio

2008-09

14103

1975

7.14

2009-10

13830

1962

7.05

2010-11

15024

2096

7.17

2011-12

11250

1605

7.01

2012-13

10525

1512

6.96

Interpretation:

16

DEBT TURNOVER RATIO:

YEAR

Cost of Credit
Sales

Average Debtors

Ratio

2008-09

18256

2186

8.35

2009-10

17952

2170

8.27

2010-11

17236

2109

8.17

2011-12

17025

2052

8.3

2012-13

16986

2053

8.27

Interpretation:

17

CREDITORS TURNOVER RATIO:

YEAR

Credit Purchase

Average Creditors

Ratio

2008-09

18256

5256

3.47

2009-10

17952

4896

3.67

2010-11

17236

4860

3.55

2011-12

17025

5012

3.4

2012-13

16986

4806

3.53

Interpretation:

18

WORKING CAPITAL TURNOVER RATIO:

YEAR

Sales

Working Capital

Ratio

2008-09

189450

93427

2.03

2009-10

177697

119651

1.49

2010-11

190019

148282

1.28

2011-12

188178

54527

3.45

2012-13

225069

61606

3.65

Interpretation:

19

FIXED ASSETS TURNOVER RATIO:

YEAR

Sales

Fixed Assets

Ratio

2008-09

189450

184657

1.03

2009-10

177697

176781

1.01

2010-11

190019

198650

0.96

2011-12

188178

212545

0.89

2012-13

225069

223385

1.01

Interpretations:

20

PROFITABILITY RATIOS
GROSS PROFIT RATIO:

YEAR

Gross Profit

Sales

Ratio

2008-09

51655

189450

0.27

2009-10

45700

179697

0.25

2010-11

38343

190019

0.2

2011-12

59080

188178

0.31

2012-13

60680

225069

0.26

Interpretation:

21

NET PROFIT RATIO:

YEAR

Net Profit

Sales

Ratio

2008-09

37338

189450

0.2

2009-10

35396

179697

0.2

2010-11

36078

190019

0.19

2011-12

52608

188178

0.28

2012-13

58070

225069

0.26

Interpretation:

22

OPERATING RATIO:

YEAR

Operating
Profit

Sales

Ratio

2008-09

51656

189450

0.27

2009-10

46201

179697

0.26

2010-11

47456

190019

0.25

2011-12

92594

188178

0.49

2012-13

77758

225069

0.35

Interpretation:

23

OVERALL PROFITABILITY RATIOS


RETURN ON TOTAL ASSETS RATIO:

YEAR

Profit After Tax

Average Total
Assets

Ratio

2008-09

37338

211745

0.18

2009-10

35396

225205

0.16

2010-11

36075

246660

0.15

2011-12

52608

298173

0.18

2012-13

58070

329742

0.18

Interpretation:

24

RETURN ON CAPITAL EMPLOYED RATIO:

YEAR

EBIT

Capital Employed

Ratio

2008-09

51656

174657

0.3

2009-10

46201

176781

0.26

2010-11

47456

198650

0.24

2011-12

92594

212545

0.44

2012-13

77837

223148

0.35

Interpretation:

25

RETURN ON NET WORTH RATIO:

YEAR

PAT

Net worth

Ratio

2008-09

37338

258117

0.14

2009-10

35396

280453

0.13

2010-11

36075

315040

0.11

2011-12

52608

355501

0.15

2012-13

58070

417763

0.14

Interpretation:
26

CONCLUSIONS
The present study entitled Techniques of financial analysis in National Thermal Power
Corporation Ltd. Is taken up by me in partial fulfillment of the award of Degree of Master of
Business Administration. During my study, based on the data collected and presented the earlier
chapter the following observations were made.
1. The sales to assets ratio is reveals that except in 2007-08, in all the years it is more than I
indicating good sales position of the firm in the market.
2. During the study period the working capital position is found to be satisfactory. In last 2
years of study current assets are more than double to that of current liabilities.
3. The net profit is more in the last year i.e. 63.7% because of the reduced operation
expenses.
4. It is observed that the total assets are almost same during the same period with a slight
variation of 1% to 3%.
5. Over all the company current position is good but years 2005-06 & 2005-04 the company
current position not good.
6. The company paid to the dividend to shareholders in last year 2009-2010 it is the more
than the last 4 years company debt position is good.
7. The company equity capital in year 2005-06 is 78125 millions but last 3 years capital is
82455 millions is increase of 5.5%.
27

SUGGESTIONS
1. Company should maintain adequate liquidity.
2. To improve the liquidity position of the company it is suggested that the company shall
finance more in current assets or pay off part of current liabilities from long term funds.
3. Company should take the measure to promote its sales, which improves the profit of the
firm.
4. It should concentrate on long term funds. If long term funds are utilized for working
capital problem will not arise in future.
5. Company should maintain adequate reserves.
6. It should try to raise its owner equity to see that the interest burden (because of debt
capital) be reduced.
7. It should control the operating costs further and should also see that the cost of
production will be low.
8. A wise policy will be taken by the company to finance fixed assets by raising long term
funds.
9. Company should take some measure to increase the return on investment. It should try to
utilize the funds to the maximum extent.
28

10. Company should try to utilize its assets to extent.

BIBLIOGRAPHY
BOOKS:
Foster G, Financial Statements Analysis, Prentice-Hall, Englewood Cliff, 1986.
Helfert. EH Techniques for Financial Analysis, Irwin, Homewood, 1997.
M.Y.Khan and P.K Jain Financial Management, Tata McGraw-Hill.
R.K sharma and Shashi K.Gupta, Management Accounting, Sultan Chand & Sons, New
Delhi.
WEBSITES:
www.ntpc.co.in
www.ntpcindia.com

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