Professional Documents
Culture Documents
Submitted By Group 6
Abhishikth Priyatam 1728108
Lawrence Joseph 1728112
Vignesh S -1728123
Sanketh C A 1728124
Vignesh D 1728133
Rajeshwari R 1728155
LIQUIDITY AND EFFICIENCY RATIOS:
The ratios covered under this are to determine the ability of the firm to meet its short run obligations. Hence its more
relevant for short term creditors.
LIQUIDITY RATIOS:
A Current ratio of >1 implies that company has sufficient liquidity to payback its short term liabilities (debt and payables).
A Quick ratio of greater than one implies that company has enough cash and other receivables to payback its short term
creditors.
TURNOVER RATIOS:
PROFITABILITY RATIOS:
Net profit ratio (NP ratio) expresses the relationship between net profit after taxes and sales. The ratio indicates what portion
of the net sales is left for the owners after all expenses have been met.
Operating net profit ratio is calculated by dividing the operating net profit by sales. This ratio helps in determining the ability
of the management in running the business.
Gross profit margin is calculated by subtracting cost of goods sold (COGS) from total revenue and dividing that number by
total revenue. The top number in the equation, known as gross profit or gross margin, is the total revenue minus the direct
costs of producing that good or service.
Gross Profit Ratio Revenue - COGS
Sales
X 100
Return on net worth is the amount of net income returned as a percentage of shareholders equity. Return on
equity measures a corporation's profitability by revealing how much profit a company generates with the money
shareholders have invested.
Return on net worth Net income
Shareholders equity
Return on capital employed or ROCE is a profitability ratio that measures how efficiently a company can generate profits
from its capital employed by comparing net operating profit to capital employed.
Return on capital employed Net operating profit
Employed capital
By
Sanketh C A
(1728124)
1MBA - N
ACCOUNTING POLICIES
Basis of Preparation
The financial statements are prepared in accordance with the historical cost convention.
Operating Cycle
All assets and liabilities have been classified as current or non-current as per the companys
normal operating cycle and other criteria set out in the Schedule III to the Companies Act,
2013 and Ind AS 1 Presentation of Financial statements based on the nature of products and
the time between the acquisition of assets for processing and their realization in cash and cash
equivalents
Property, Plant and Equipment Tangible Assets
Property, plant and equipment are stated at cost of acquisition or construction less
accumulated depreciation and impairment, Ind AS 2 Inventories or value in use in Ind AS
36 Impairment of Assets.
a) Depreciation on tangible fixed assets are provided on the ''Straight Line Method'' over
the useful
life of assets as prescribed in Schedule II of the Companies Act, 2013. Further, Parts that
are significant
in cost in relation to the total cost of an asset having a different useful life than the
remaining asset are
acquired on operating lease is written off evenly over the balance period of the
lease. Premium on leasehold
i. Landing Rights acquired are amortized over a period not exceeding 20 years.
Amortization period
exceeding 10 years is applied considering industry experience and expected asset usage.
INVESTMENTS :
Current Investments are carried at lower of cost or quoted / fair value. Long Term
Investments are stated
at cost. Provision for diminution in the value of long-term investments is made only if such a
decline is
According to the PL account, the Total revenue of the organization has come down Rs. 5216.74
crores from 5381.83 crores in 2016 when compared to 2015. There is drop in 3.06%. But the
expenses in 2016 have come down to Rs. 4873.24 crores when compared to 2015 which was Rs.
6130.24 crores. They majorly saved in air fuel expenses in 2016 where it was 42.21% less when
compared to 2015. Also, they saved in operating expenses and depreciation which majorly
saved the total expenses of the company.
The Profit before tax in 2016 is 343.51 crores whereas in 2015 they were running under
loss of 748.41 crores. So even though the Revenue reduction happened in 2016 when compared
to 2015, they majorly covered it up in expenses in 2016 when compared to 2015. Thus the
company got into profits whereas in the previous year it was running under loss.
LIQUIDITY AND EFFICIENCY RATIOS:
Ratios FY FY Analysis
2016 2015
Liquidity Ratios
Current Ratio 0.32 0.25 The General Thumb rule for this ratio is 2:1.
We can see that in 2015 the ratio was 0.25, and
in 2016 it raised to 0.32. It means that in both
the years the company is not able to pay their
current liabilities with the current asset. But the
condition in 2016 was better than previous year.
From balance sheet we can see that the trade
payables (TP), short borrowings etc. have
reduced. TP reduced by 23.18% in 2016 than
previous year. Also, the current investment,
cash and Inventories increased in 2016 when
compared to 2015. Still the company is not at
all in a position to repay its current liabilities.
Quick Ratio 0.29 0.23 Its a supplement of Current ratio. The thumb
rule for quick ratio is 1:1.There is very minor
improvement in 2016 compared to 2015.The
company has improved their ability to convert
its liquid assets into cash. The cash and cash
equivalents we can see in balance sheet that its
increased by 360% in 2016 compared to last
year.
Turnover Ratios
Fixed Asset 2.46 2.49 In the 2016, the ratio came down to 2.46,
Turnover Ratio whereas in 2015 it was 2.49. There are two
reasons for this. This shows that the company
has utilized its fixed assets well in 2016, also
the investment in fixed assets is better in 2016
as when compared to 2015 in terms of plant,
equipment etc.
1) The sales came down in the year 2016
as when compared to 2015.
2) The fixed assets were increased by
37.81% which means the utilization
have reduced accordingly.
Total Asset 12.35 34.32 In 2015 the ratio was 34.32, which came down
Turnover Ratio to 12.35 in 2015. The reason being sales were
went down in 2016 as compared to 2015, also
the effective utilization of total assets werent
happening. The inventory stocks were more in
2016. Also, the company held a lot of cash in
hand as when compared to last year rather than
utilizing it for other operating purposes. The
cash in was 78.34% more in 2016.
Inventory 76.46 115.29 We can see that the ratio in 2016 has come
Turnover Ratio down drastically from 115.29 to 76.46 in 2016
from 2015. The inventories stock has increased
by 32.2% this shows that sales in 2016 has
decreased when compared to 2015. They are
not able to convert inventories into sales faster.
That can be seen in total revenue too. Where
there is reduction in revenue since there is
reduction in sales.
Debtors 61.65 37.50 The ratio in the year 2016 it was 61.65 whereas
Turnover Ratio in the year 2015 it was only 37.50. It shows that
in 2016 the company was efficient enough to
collect their major trade receivables. The
company collected 64.5% better in 2016 as
compared to 2015.
PROFITABILITY RATIOS:
Ratios FY FY Analysis
2016 2015
Operating 8.49% -12.65% In the year 2015, the company was running
Profit ratio loss of 12.65% whereas in 2016 it gained
profit of 8.49%. The major reason being
reduction in fuel expenses which was drastic
in 2016, it was 42.21%. This in turn increased
the profit before tax and hence the ratio.
Net Profit Ratio 8.00% -13.20% The company is running under profits in 2016
@8% whereas in 2015 it was under loss of
13.20%. It shows that the company utilized
working capital effectively in the current year.
Gross Profit 6.18% -15.08% It can be seen that the GPR increased to
Ratio 6.18% in the in the year 2016. The major
reason being the COGS is reduced in 2016.
(The operating expenses in 2016 have
drastically reduced which in turn have
reduced COGS)
Return on net 8.00% -13.20% The Return on net worth has increased from -
worth 13.20% to 8%. The shareholders equity has
been constant for both the years. So the ratio
is varying drastically since net income in 2016
was
Return on 111.61% -392.72% The ratios in the year 2016 and 2015 are
Capital 111.61% and -392.72% respectively. 2016 the
employed ratio was higher. The company had negative
reserves and surplus in both the year but in
2016 it was 18.25% more than 2015, while
sales have decreased only by lesser margin.
BY
Vignesh D
1728133
1 MBA N
Accounting Policy
InterGlobe Aviation Limited (''the Company'') was incorporated on
13 January 2004 as a private limited company. Subsequently, the Company
changed its legal status from a private company to a public company on
11 August 2006. The Company is in the low cost carrier (LCC) segment of
the airline industry in India. The Company had commenced international
operations during the year ended 31 March 2012. The Company got listed
on National Stock xchange (NS) and Bombay Stock xchange (BS) on
10 November 2015.
Capital work-in-progress
Cost of tangible assets not ready for use as at the balance sheet
date are disclosed as capital work-in-progress.
Leased assets
Interpretation:
a) Liquidity Ratio: The major indicators of liquidity worsened in the year 2015-
16. The current ratio is increased by 0.34 times, whereas the Quick Ratio is
also increased by 0.34 times, which states that companys current assets as well
as quick assets has decreased in the year 2015-16
b) Turnover Ratio: The major indicators of turnover worsened in the year 2016-
17. The inventories are build up by 20.71 times which suggests a general
slowdown in companys business. There was a fall in companys Asset Turnover
in the year 2015-16 which means company has less per rupee of assets.
c) Profitability Ratio: These ratios measure the ability of the firm to earn profit.
All these ratios are increasing. The increase in Gross profit, net profit and
operating profit are signs of improvement. Also, the operating profit is based on
the decrease in the operating cost which has led to reduction of operating
ratio.
d) Solvency Ratio: The major indicators of solvency show that companys debt
equity ratio has decreased by -6.88 which means company has more debt than
previous year and less equity than previous year
Financial Report
On
Jet Airways
BY
Vignesh S
1728123
1 MBA
(iv) SIGNIFICANT ACCOUNTING POLICIES
Principles in India (Indian GAAP) and complies with Accounting Standards specified
under section 133 of the
Companies Act, 2013 (''the Act'') read with rule 7 of the Companies (Accountants) Rules
2014, to the extent
The financial statements are prepared on accrual basis under the historical cost convention,
except for
certain Fixed Assets which are carried at revalued amounts. The financial statements
are presented in Indian
All assets and liabilities have been classified as current or non-current as per the Company''s
normal
operating cycle and other criteria set out in schedule III to the Act. Based on the nature of
the services
and their realization in cash and cash equivalents, the Company has ascertained its operating
cycle as twelve
months for the purpose of current or non-current classification of assets and liabilities.
- USE OF ESTIMATES :
disclosure of contingent liabilities on the date of the Financial Statements and the
reported amount of
revenue and expenses during the reporting period. Differences between the actual results
and estimates are
b) REVENUE RECOGNITION :
d) Passenger and Cargo income are recognized on flown basis, i.e. when the services
are rendered.
e) The sales of tickets / airway bills (sales net of refunds) are initially credited to the
Forward
Sales Account. Income recognized as indicated above is reduced from the Forward
Sales Account and the
balance, net of commission and discount thereon, is shown under Other Current Liabilities.
e) The unutilized balances in Forward Sales Account are recognized as income based
on historical
statistics, data and management estimates and considering Company''s refund policy.
d) Lease income on the Aircraft given on operating lease is recognized in the Statement
of Profit and
Loss on an accrual basis over the period of lease to the extent there is no
significant uncertainty about the
Export incentive available under prevalent scheme is accrued in the year when the right
to receive credit
as per the terms of the scheme is established in respect of exports made and are accounted
to the extent there
is no significant uncertainty about the measurability and ultimate utilization of such duty
credit.
E. COMMISSION :
As in the case of revenue, the commission paid / payable on sales including any over-riding
commission is
F. EMPLOYEE BENEFITS :
contributions to a separate entity and has no obligation to pay any future amounts.
Company''s contribution
paid / payable for the year to defined contribution schemes are charged to Statement of Profit
and Loss.
Company''s liabilities towards defined benefit plans and other long term benefit plans
are determined
using the Projected Unit Credit Method. Actuarial valuations under the Projected Unit
Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are recognized in
the Statement of Profit
and Loss in the period of occurrence of such gains and losses. Past service cost is recognized
immediately to
the extent the benefits are vested, otherwise it is amortized on straight-line basis over
the remaining
The employee benefit obligation recognized in the balance sheet represents the present
value of the
Short-term employee benefits expected to be paid in exchange for the services rendered
by employees are
recognized undiscounted during the period the employee renders services. Such
benefits include salaries,
G. FIXED ASSETS :
a) Tangible Assets :
Owned tangible fixed assets are stated at cost and includes amount added on revaluation less
accumulated
depreciation and impairment loss, if any. All costs relating to acquisition and installation of
fixed assets
upto the time the assets get ready for their intended use are capitalized.
Parts that are significant in cost in relation to the total cost of an asset having a
different useful
life than the remaining asset are identified and accounted as separate components.
The cost of improvements to Leased Properties as well as customs duty / modification cost
incurred on
Aircraft taken on operating lease have been capitalized and disclosed appropriately.
b) Intangible Assets :
Intangible assets are recognized only if acquired and it is probable that the future economic
benefits
that are attributable to the assets will flow to the enterprise and the cost of assets can
be measured
reliably. The intangible assets are recorded at cost and are carried at cost less
accumulated amortization
i. Operating Lease: Rentals are expensed with reference to the Lease Term and other
considerations.
ii. Finance Lease / Hire Purchase: The lower of the fair value of the assets and the
present value of
the minimum lease rentals is capitalized as Fixed Assets with corresponding amount
shown as Lease Liability
Loss.
H. IMPAIRMENT OF ASSETS :
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable
value. An
impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which
an asset is
revaluation surplus held for the asset to the extent that the impairment loss does not exceed
the amount held
in revaluation surplus for the same asset. The impairment loss recognized in prior
accounting periods is
I. DEPRECIATION / AMORTISATION :
b) Depreciation on tangible fixed assets are provided on the ''Straight Line Method'' over
the useful
life of assets as prescribed in Schedule II of the Companies Act, 2013. Further, Parts that
are significant
in cost in relation to the total cost of an asset having a different useful life than the
remaining asset are
acquired on operating lease is written off evenly over the balance period of the
lease. Premium on leasehold
ii. Landing Rights acquired are amortized over a period not exceeding 20
years. Amortization period
exceeding 10 years is applied considering industry experience and expected asset usage.
J. INVESTMENTS :
Current Investments are carried at lower of cost or quoted / fair value. Long Term
Investments are stated
at cost. Provision for diminution in the value of long-term investments is made only if such
a decline is
K.INVENTORIES :
Inventories are valued at cost or Net Realizable Value (NRV), whichever is lower. Cost of
inventories
comprises of all costs of purchase and other incidental cost incurred in bringing them
to present location
and condition. Cost is determined using the Weighted Average formula. In respect
of reusable items such as
notables, galley equipment and tooling etc., NRV takes into consideration provision for
obsolescence and wear
and tear based on the estimated useful life of the spares and also provisioning for non -
moving / slow moving
items.
Key Financial Ratios of Jet Airways
Mar- Mar- Absolute Percentage
16 15 Change Change
Profitability Ratios
PBDIT Margin (%) 13.97 3.02 10.95 362.58
PBIT Margin (%) 8.73 -2.03 10.76 -530.05
PBT Margin (%) 5.41 -10.02 15.43 -153.99
Net Profit Margin (%) 5.41 -10.02 15.43 -153.99
Liquidity Ratios
Current Ratio (X) 0.43 0.37 0.06 16.22
Quick Ratio (X) 0.35 0.31 0.04 12.90
Management Efficiency Ratios
Number of Days In Working Capital -99.13 -104.39 5.26 -5.04
Return on Networth (%) -21.92 31.58 -53.5 -169.41
Return on Capital Employed (%) 52.32 -11.84 64.16 -541.89
Turnover Ratio
Inventory Turnover Ratio 20.16 21.11 -0.95 -4.50
Debtors Turnover Ratio 14.71 15.66 -0.95 -6.07
Asset Turnover Ratio 5.59 4.95 0.64 12.93
Return on Assets (%) 5.4 4.55 0.85 18.68
Solvency Ratio
Earnings per Share 103.31 -159.66 262.97 -164.71
Debt Equity Ratio 20.87 21.76 -0.89 -4.09
Interpretation:
a) Liquidity Ratio: The major indicators of liquidity worsened in the year 2015-
16. The current ratio is increased by 0.06 times, whereas the Quick Ratio is also
increased by 0.04 times, which states that companys current assets as well as
quick assets has decreased in the year 2015-16
b) Turnover Ratio: The major indicators of turnover worsened in the year 2016-
17. The inventories are reduced up by 0.95 times which suggests a general
slowdown in companys business. There was a fall in companys Asset Turnover
in the year 2015-16 which means company has less per rupee of assets.
c) Profitability Ratio: These ratios measure the ability of the firm to earn profit. All these ratios are increasing. The increase in Gross
profit, net profit and operating profit are signs of improvement. Also, the operating profit is based on the decrease in the operating
cost which has led to reduction of operating ratio.
d) Solvency Ratio: The major indicators of solvency show that companys debt
equity ratio has decreased by -0.89 which means company has more debt than previous year and less equity than previous year
Financial Report
On
North Eastern Aviation Corporation
BY
Rajeshwari
1728155
1 MBA N
ACCOUNTING POLICIES
1. Basis of preparation
The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India
(Indian GAAP).
The company has prepared these financial statements to comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 2013.
The company follows the Mercantile System of Accounting recognizing Income and Expenditure on accrual basis.
The directors have certified that there are no outstanding expenses not provided for and nor there is income which have fallen
due but not accounted for. The accounts are prepared on historical cost basis and as a going concern.
The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent
liabilities, at the end of the reporting period. Although these estimates are based on the managements best knowledge of current
events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.
Contingent Liabilities
Contingent Liability are disclosed by way of notes in the Balance Sheet.
Fixed Assets
Fixed Assets are stated at cost. Depreciation of fixed assets is calculated on the basis of useful life of the assets as per Schedule II of
the Companies Act, 2013.
Leases
Lease rentals in respect of operating lease arrangements are recognized as an expense in the profit & loss account on accrual basis
with reference to lease terms and other considerations.
Investment
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such
investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial
recognition, all investments are measured at cost.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment
basis. Long-term investments are carried at cost. On disposal of an investment, the difference between its carrying amount and net
disposal proceeds is charged or credited to the statement of profit and loss.
Inventories
Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Work in progress and finished
goods are valued at lower of cost and net realizable value.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be
reliably measured.
FINANCIAL ANALYSIS
A comparative study on the financial statements of North eastern aviation is done for the year 2014-2015 and
2015-2016. The changes are shown below.
Balance Sheet of North Eastern Carrying Corporation
Mar-16 Mar-15 Absolute Change Percentage Change
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 50.20 50.2 0 0.00
Total Share Capital 50.20 50.2 0 0.00
Reserves and Surplus 22.69 17.05 5.64 33.08
Total Reserves and Surplus 22.69 17.05 5.64 33.08
Total Shareholders Funds 72.89 67.25 5.64 8.39
NON-CURRENT LIABILITIES
Long Term Borrowings 5.04 3.74 1.3 34.76
Deferred Tax Liabilities [Net] 0.00 0.00 0 0.00
Total Non-Current Liabilities 5.04 3.74 1.3 34.76
CURRENT LIABILITIES
Short Term Borrowings 73.26 70.5 2.76 3.91
Trade Payables 4.15 1.00 3.15 315.00
Other Current Liabilities 3.92 1.69 2.23 131.95
Short Term Provisions 7.76 19.01 -11.25 -59.18
Total Current Liabilities 89.09 92.20 -3.11 -3.37
Total Capital And Liabilities 167.02 163.19 3.83 2.35
ASSETS
NON-CURRENT ASSETS
Tangible Assets 18.36 14.77 3.59 24.31
Fixed Assets 18.36 14.77 3.59 24.31
Deferred Tax Assets [Net] 0.49 0.55 -0.06 -10.91
Long Term Loans And Advances 4.19 4.18 0.01 0.24
Total Non-Current Assets 23.04 19.5 3.54 18.15
CURRENT ASSETS
Current Investments 0.01 0.01 0 0.00
Trade Receivables 120.14 113.58 6.56 5.78
Cash And Cash Equivalents 3.24 3.69 -0.45 -12.20
Short Term Loans And Advances 20.58 26.41 -5.83 -22.07
Total Current Assets 143.98 143.69 0.29 0.20
Total Assets 167.02 163.19 3.83 2.35
Profit & Loss account of North Eastern Carrying Corporation
Mar '16 Mar '15 Absolute Change Percentage Change
Income
Sales Turnover 538.35 530.65 7.7 1.45
Net Sales 538.35 530.65 7.7 1.45
Other Income 1.4 1.28 0.12 9.37
Total Income 539.75 531.93 7.82 1.47
Expenditure
Raw Materials 0 0 0 0.00
Power & Fuel Cost 0 0 0 0.00
Employee Cost 11.37 10.2 1.17 11.47
Other Manufacturing Expenses 493.4 488.72 4.68 0.96
Miscellaneous Expenses 14.31 12.9 1.41 10.93
Total Expenses 519.08 511.82 7.26 1.42
Operating Profit 19.27 18.83 0.44 2.34
PBDIT 20.67 20.11 0.56 2.78
Interest 8.64 8.27 0.37 4.47
PBDT 12.03 11.84 0.19 1.60
Depreciation 3.07 3.31 -0.24 -7.25
Profit Before Tax 8.96 8.53 0.43 5.04
PBT (Post Extra-ord Items) 8.96 8.53 0.43 5.04
Tax 3.32 2.99 0.33 11.04
Reported Net Profit 5.64 5.54 0.1 1.81
Total Value Addition 519.08 511.82 7.26 1.42
Per share data (annualised)
Shares in issue (lakhs) 501.97 501.97 0 0.00
Earning Per Share (Rs) 1.12 1.1 0.02 1.82
Book Value (Rs) 14.52 13.4 1.12 8.36
Cash Flow of North Eastern Carrying Corporation
Mar '16 Mar '15 Absolute Change Percentage Change
Net Profit Before Tax 8.96 8.54 0.42 4.92
Net Cash From Operating Activities 2.09 1.05 1.04 99.05
Net Cash (used in)/from Investing Activities -6.6 -2.22 -4.38 197.30
Net Cash (used in)/from Financing Activities 4.06 1.65 2.41 146.06
Net (decrease)/increase In Cash and Cash Equivalents -0.44 0.48 -0.92 -191.67
Opening Cash & Cash Equivalents 3.69 3.21 0.48 14.95
Closing Cash & Cash Equivalents 3.24 3.69 -0.45 -12.20
Key Financial Ratios of North Eastern Carrying Corporation
Mar-16 Mar-15 Absolute Change Percentage Change
Profitability Ratios
PBDIT Margin (%) 3.83 3.79 0.04 1.06
PBIT Margin (%) 3.26 3.16 0.1 3.16
PBT Margin (%) 1.66 1.6 0.06 3.75
Net Profit Margin (%) 1.04 1.04 0 0.00
Liquidity Ratios
Current Ratio (X) 1.62 1.56 0.06 3.85
Quick Ratio (X) 1.62 1.56 0.06 3.85
Debt Equity Ratio 1.07 1.1 -0.03 -2.73
Management Efficiency Ratios
Debtors Turnover Ratio 4.61 4.66 -0.05 -1.07
Number of Days In Working Capital 89.68 86.76 2.92 3.37
Return on Networth (%) 7.73 8.24 -0.51 -6.19
Return on Capital Employed (%) 11.64 11.88 -0.24 -2.02
Asset Turnover Ratio 3.68 3.85 -0.17 -4.42
Return on Assets (%) 3.37 3.39 -0.02 -0.59
RATIO INTERPRETATION
The interpretation from the the financial analysis over the year 2014-2015 and 2015-2016 are shown below
PBDIT has increased by 1%, this is because of increase in higher increase in PBDIT cost due to increase in other income by 19%
of the company.
PBIT: - PBIT has increased by 13% due to decrease in depreciation amount by 7%. This is because the company follows written
down value method of depreciation.
PBT: - PBT has increased by 3.75% this is because there is decrease in depreciation and increase in interest.
Net Profit Margin: - There is no change in net profit margin because the net profit has been increased by 1% and sales also
has increased by 1%. hence here wont be any change in net profit margin
Return on Net Worth: - Return on net worth has reduced by 6%, this is because there is no change in equity share capital.
Return on Capital Employed: -Return on Capital employed is reduced by 2%. this is because the reserve and surplus of the
company has increased by 33% while sales has increased only by 1%
Debt Equity ratio: - Debt equity ratio of the company is more than 1%, which means that the company have more Debt and
the risk in investing in the company is low
Return on asset: - Return on asset are equal which indicates that there is optimum utilization of asset
Asset turnover ratio: - Asset turn over ratio has decreased by 1% this is because there is 2.3% increase in net asset and sales
turnover is increased by 1.45%, this indicates that the company is purchasing more asset but there is no effective conversation
of these asset into sales.
Asset turnover is compared with sales and return on asset is compared with income, the income from other sources have gone
up but there is no high change in sales. this is due to the reason why return on asset is same and asset turnover ratio has
reduced.
Current Ratio and quick ratio: - Current ratio and quick ratio is lesser compared to the ideal ratio, there is no higher change
in current ratio and quick ratio because there is no inventory. so the company must concentrate in reducing their current
liability unspecific threw short term borrowings. Also note that the Trade payable of the company has increased by 315%, the
company should also concentrate in reducing this.
Debtor turnover ratio: - Debtor turnover ratio is decreased by 1%, this is because the trade receivables have gone up by 5%
while sales have increased by 1.45%. this indicates that the sale isnt being converted into sales effectively.
No of working days capital: - Operating cycle has been increased by 3days because of 5% increase in trade payable because
of which the companys services are not converted into cash.
Financial Report
On
AIR ASIA
AIR ASIA
Investments in subsidiaries
In the Companys separate financial statements, investments in subsidiaries, joint ventures and associates are stated at cost
less accumulated impairment losses. Amounts due from associates of which the Company does not expect repayment in the
foreseeable future are treated as part of the parents net investment in associates.
Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately
to its recoverable amount .
On disposal of investments in subsidiaries, joint ventures and associates, the difference between disposal proceeds and the
carrying amounts of the investments are recognised in profit or loss.
Method of depreciation
Depreciation has been provided on straight line method in terms of expected life span of assets as referred to in Schedule II of
the Companies Act, 2013. In the following category of all assets , the depreciation has been provided on the technical evaluation
of the useful life which is different from the one specified in Schedule II to the Companies Act, 2013.
The residual value and useful life is reviewed annually and any deviation is accounted for as a change in estimate.
Inventories
Inventories which comprise consumables used internally for repairs and maintenance are stated at the lower of cost and net
realisable value. Cost is determined on the weighted average basis, and comprises the purchase price and incidentals incurred
in bringing the inventories to their present location and condition.
Net realisable value represents the estimated selling price in the ordinary course of business, less all applicable variable
selling expenses. In arriving at net realisable value, due allowance is made for all damaged, obsolete and slow-moving items.
Revenue Recognition
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the Group commits to
purchase or sell the asset. Financial assets are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at
fair value, and transaction costs are expensed in profit or loss.
Ratio Analysis of Dabur India Ltd
1) Liquidity Ratios
Types 2017 2016 Analysis
Current ratio 0.97 0.3 The thumb rule for current
ratio is 2:1.In 2016 the firms
ability to cover its current
liabilities with its current
assets was 0.3 and in 2017
the ratio goes up to 0.97 as
compared to 2016 which
implies that the company is
improving their liquidity.
Also by comparing the ratios
with the ideal ratio the
company is having less
current ratio.
Quick ratio 0.564 0.29 The thumb rule for quick ratio
is 1:1.There is a slight
improvement in 2017
compared to 2016.The
company has improved their
ability to convert its liquid
assets into cash.
2)Turnover Ratios
Sl.No Types 2017 2016 Analysis
1 Inventory turnover ratio 1.04 0.69 The inventory turnover ratio has
deteriorated from 1.04 times to 0.69
times which means the efficiency in
managing the inventory has
reduced, but still they have an
efficient management of inventory.
2 Receivables turnover 7.29 9.21 Here also there is a small decrease
ratio from 9.21 times to 7.29times which
implies that there is a reduction in
companys ability to collect
amounts due from its customers.
But the ratio indicates that the
receivables are turned into cash at a
relatively good speed.
4 Assets turnover ratio 52.33 44.87 The enterprise is managing its
assets efficiently as the assets
turnover ratio is high. It can also be
observed that there is increase in
assets turnover ratio from
52.33times to 44.87 times which
shows that the efficiency of the
company in managing the assets
has increase.
a) Fixed assets ratio 0.51 0.71 This shows that the company is not
using there fixed assets properly to
generate sales as compared to 2016.
3)Profitability Ratios (%)
Types 2017 2016 Analysis
Net profit ratio 71.39 37.25 It shows that the
profitability of the
company has
increased.
Operating profit 32.53 25.01 It shows the
ratio operating profit ratio
has increase from
previous years.
Gross profit ratio 36.83 15.70 This indicate that
company profit has
increase
Return on capital 28.90 32.42 It shows that the
employed capital em
Return on net worth 30.34 26.11
4)Solvency Ratios
Types 2017 2016 Analysis
Debt equity .85 .72 The firms debt as compared to equity has
ratio increased from last year
EPS 5.67 5.34 It has increased because profits have
increased as compared to last year
Interest 34.38 56.5 It decreased because the company doesnt
coverage ratio have adequate amount of funds to pay
interest as compared to last year.
Financial Report
On
Global Vectra Corp
BY
J Abhishikth Priyatham
1728108
1 MBA
Accounting Policy Mar '16
Notes to Financial Statements for the year ended 31st March 2016
(Currency Indian Rupees)
Background
Global Vectra Helicorp Limited (''the Company'') was incorporated in 1998 as a private limited company
and was subsequently listed on 27 October 2006 the Bombay Stock Exchange Limited and the National Stock
Exchange Limited. The Company is mainly engaged in helicopter charter services for offshore transportation,
servicing the oil and gas exploration and production sector in India. The Company is also engaged in
The accounting policies set out below have been applied consistently to the periods presented in these
financial statements.
These financial statements are prepared in accordance with Indian Generally Accepted Accounting
Principles (GAAP) under the historical cost convention on accrual basis, except for certain fixed assets
which were revalued (at fair value) during the year ended 31 March 2009. GAAP comprises mandatory accounting
standards as prescribed under Section 133 of the Companies Act, 2013 (''the Act'') read with Rule 7 of the
Companies (Accounts) Rules, 2014. Accounting policies have been consistently applied except where a
requires a change in the accounting policy hitherto in use. The financial statements are presented in Indian
rupees.
The preparation of financial statements in conformity with the generally accepted accounting principles
(GAAP) in India requires the management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements
and the reported amount of revenues and expenses during the reporting period. The estimates and assumptions
used in the accompanying financial statements are based upon management''s evaluation of the relevant facts
Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis; any revision to accounting estimates is recognized prospectively in current and future
periods.
All assets and liabilities are classified into current and noncurrent.
Assets
a) it is expected to be realized in, or is intended for sale or consumption in, the Company''s normal
operating cycle;
d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a
Current assets include the current portion of non current financial assets.
d) The Company does not have an unconditional right to defer settlement of the liability for at least
12 months after the reporting date. Terms of a liability that could, at the option of the counter party,
result in its settlement by the issue of equity instruments do not affect its classification.
Operating cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in
Fixed assets are stated at cost of acquisition, less accumulated depreciation/amortization and impairment
losses, if any. The cost of an item of tangible fixed asset comprises its purchase price, including import
duties and other non-refundable taxes or levies and any directly attributable cost of bringing the asset to
its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the
purchase price. During the year ended 31 March 2009, the Company revalued all its leased and owned
helicopters to reflect the current reinstatement cost / market value of the same. These assets are carried at
Expenditure incurred on acquisition / constructions of fixed assets which are not ready for their
intended use at each balance sheet date are disclosed under capital work in progress.
Depreciation on tangible fixed assets (including assets acquired under finance leases) except leasehold
improvements is provided on the straight-line method over the useful lives of assets as prescribed under
Schedule
II of the Act which in management''s opinion reflects the estimated useful economic lives of fixed assets
(refer note 10). Leasehold improvements in the nature of hangar and administrative building are amortized over
the primary lease period or the useful life of the assets, whichever is shorter.
Major components of helicopters which require replacement at regular intervals are identified and
depreciated separately over their respective estimated remaining useful life. Accordingly, overhaul costs of
engines are depreciated over 5,000 hours, being their estimated useful life. Depreciation for the year is
recognized in the statement of profit and loss; the amount corresponding to the additional depreciation on
the revalued asset is being transferred from the revaluation reserve to the general reserve.
Losses arising from retirement or gains or losses arising from disposal of fixed assets which are carried
at cost are recognized in the Statement of Profit and Loss. In case of disposal of a revalued asset, the
difference between net disposal proceeds and the net book value is charged or credited to the Statement of
Profit and Loss except that to the extent that such a loss is related to an existing surplus on that asset
The useful life of assets are reviewed by the management at each financial year end and revised if
appropriate. In case of a revision, the unamortized depreciable amount is charged over the remaining useful
life.
1.5 impairment of assets:
Where there is an indication of impairment of the Company''s assets, the Company estimates the
recoverable amount of the asset or a group of assets. The recoverable amount of the asset (or where
applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its
net selling price and its value in use. In assessing value in use, the estimated future cash flows are
discounted to the present values based on an appropriate discount factor. If such recoverable amount of the
asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is
an indication that a previously assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
Helicopter maintenance expenses including repairs and maintenance that are required to be performed at
regular intervals as enforced by the Director General of Civil Aviation (DGCA) and in accordance with the
maintenance programme laid down by the manufacturers are debited to the statement of profit and loss as and
when incurred.
1.7 Inventories
Inventories comprising of consumables and spares supplies, are valued at lower of cost and net realizable
value. Cost is determined on the basis of weighted average method. Cost of inventory comprises of all cost of
purchase and other incidental cost incurred in bringing the inventories to their present location and
condition.
Service income and reimbursement of expenses is recognized as and when services are rendered in
accordance with the terms of the specific contracts, net of all contractual deductions. Revenue is recognized
''Unbilled revenue'' included in ''Other current assets'' represents services rendered for which billing
Interpretation:
a) Liquidity Ratio: The major indicators of liquidity worsened in the year 2015-
16. The current ratio is increased by 0.02 times, whereas the Quick Ratio is
also increased by 0.03 times, which states that companys current assets as well
as quick assets has decreased in the year 2015-16
b) Turnover Ratio: The major indicators of turnover worsened in the year 2016-
17. The inventories are build up by 20.71 times which suggests a general
slowdown in companys business. There was a fall in companys Asset Turnover
in the year 2015-16 which means company has less per rupee of assets.
c) Profitability Ratio: These ratios measure the ability of the firm to earn profit.
All these ratios are decreasing. The increase in Gross profit, net profit and
operating profit are signs of decline.
d) Solvency Ratio: The major indicators of solvency show that companys debt
equity ratio has decreased by -6.88 which means company has more debt than
previous year and less equity than previous ye
INDUSTRY ANALYSIS
Average Ratios of 2015
Sl.No Ratio SpiceJet North Jet Interglobe AirAsia Global Averag
eastern Airways aviation Vectra e Ratio
carrying Vi S corp
corporation
1) Liquidity -
Ratio
a) Current 0.25 1.56 0.37 1.07 - 0.4 0.65
Ratio
b) Quick Ratio 0.23 1.56 0.31 1.03 - 0.27 0.68
2) Turnover -
Ratio
a) Inventory 115.29 - 21.11 106.66 - - 81.02
Turnover
ratio
b) Fixed asset 2.49 - - - - - 2.49
turnover
ratio
c) Total asset 34.32 3.85 4.95 3.7 - 74.16 24.196
turnover
ratio
d) Debtors 37.50 4.66 15.66 143.80 - 18.16 43.956
turnover
ratio
3) Profitability -
Ratio
a) Gross profit -15.08 3.79 3.02 16.18 - 25.43 6.668
Ratio
b) Net Profit -13.20 1.6 -10.02 9.3 - 6.66 -1.132
ratio
c) Return on -13.20 8.24 31.58 306.61 - -230.64 20.518
net worth
d) Return on -392.72 11.88 -11.84 48.6 - 11.88 -66.44
Capital
employed
e) Operating -12.65 - - - - -12.65
Profit ratio
4) Solvency -
Ratio
a) Debt -to- -1.12 1.1 21.76 8.49 - -12.19 3.61
Equity ratio
b) Earnings per -11.46 - -159.66 42201.40 - - 14010.
Share 09
c) Interest -4.20 - - - - -4.20
Coverage-
Ratio
ANALYSIS
Liquidity Ratio
The Current ratio for the industry has witnessed an increase from 2015 to 2016. Even though there is increase in number but still it tells us that those
organizations in this industry will not be able to meet the short term liabilities promptly but. The quick ratio on the other hand is low as compared to
current ratio which implies low liquidity.
Turnover Ratio -
The inventory turnover ratio for the industry has decreased drastically from 2015 to 2016. This shows that the inventory is moving slow and
generating sales comparatively low as compared to last year. The asset turnover ratio has decreased due to the decrease in sales. The debtors
turnover ratio has decreased which shows that the industry has not efficiently collecting back its trade receivables.
Profitability Ratio
In 2016 almost all the profitability ratio shows a good situation for the firms of the industry. There is increase in gross profit & net profit which
means the companies have operated efficiently. Also, there is increase in return on capital employed, which means the companies are efficiently
utilizing the capital of shareholders.
Solvency Ratio
The debt-equity ratio has increased drastically which means that the company is very much dependent on borrowed funds as compared to last year.
Also, there is increase in interest coverage ratio. Also, there is decrease in EPS, which will make the shareholders of the firms unhappy about it.