COGS Cost of Goods sold

EBIT Earning Before interest and tax = PBIT Profit Before interest and tax Minus
EBT Earning Before tax = PBT Profit Before tax
EAT Earning after tax = PAT Profit after tax Minus
EPS Earning Per share
PE Price per Earning Plus
ROI Return on investment Minus
ROE Return on Equity = ROCE Return on Capital Employed Plus
ESF Equity share fund
ICR Interest cover ratio Minus

Minus
Sales
(COGS)
GROSS PROFIT
Operating Expense
Operating Profit
Non Operating Income
Non Operating Expense*
Other Income
EBIT/PBIT
Interest
EBT/PBT
Tax
EAT / PAT / Net Profit
 FINANCIAL
LIQ
Current Ratio Current Asset/CurrentLiability
Quick Ratio Quick Asset/Current Liability
Cash Position Ratio (Cash+Bank) / Current Liability
CFO/CL Cash from operating activity / Current Liability
SO
Debt/Equity Ratio Total Debt/ Shareholder's Fund
Debt/Asset Total Debt/ Total Asset
Debt/Capital Total Debt/ Total Capital
Interest Coverage Ratio EBIT/ Interest
Fixed Charge Coverage ratio EBIT/ Fixed Charges
EFFICIENC
Inventory Turnover Ratio Sales/Inventory
Debtor Turnover Ratio Sales/Debtors
Working Capital Turnover Ratio Sales/Gross Working Capital
Asset Turnover Ratio Sales/Total Asets
Creditors Turnover Ratio Purchase/Creditors
Average Collection Period 365/Debtor Turnover Ratio
Average Payable Period 365/CreditorTurnover Ratio

Gross Profit Ratio Gross Profit / Sales

Operating Profit Ratio Operating Profit/ Sales
EBIT Margin EBIT/ Sales
EBT Margin EBT/ Sales
Return on Equity ROE= EAESH / Shareholders Fund
Return on Capital Employed ROI/ROCE= EBIT/ Total Capital

Price Earnings Ratio Market Price of Share/Earnings per share

Price Book Value Ratio Market Price of Share/Book value per share
Dividend Yield Annual dividend/Market Price of Share
 FINANCIAL STATEMENT ANALYSIS
LIQUIDITY RATIOS

Quick Ratio= Current Assets - Inventory

Cash Flow from Operating

SOLVENCY RATIOS
Total Debt= Short term borrowing + Long Term Borrowing(Debenture) + Bank overdraft
Shareholder's Fund = Equity share capital + Other equity(Reserve & surplus)
Total Capital = Total long term debt + Share holders fund + Preference share
Interest = Debenture and term loan
Fixed Charge = Interest on (Debentures + Loan) + dividend on preference share
EFFICIENCY / TURNOVER RATIOS
Net sales= Sales- sales return
Debtors= Trade Recievable
Gross working Capital= Current asset - current Liability

Creditors= Trade Payable

Profitability
Gross profit= net sale -cogs
Operating profit= gross profit- operating expense
EBIT= Operating profit + non operating income - non operating expense + other income
EBT= EBIT - interest (Long term + short term)
EAESH= (EBT-Tax=EAT= Net profit)- Prefrence dividend
EAT= net profit
VALUATION
Mps will be given, EPS= EAESH/no of equity shares
Book value per share= share holders fund / no of shares
Annual dividend= (Equity share capital/ no. of shares )* dividend rate
Annual dividend= Face Value of one share* Dividend rate
 Liquidity Ratios examines firm's ability to pay off its short term
obligation or current liability

Solvency Ratios examines firm's ability to pay off its long term
obligation

Efficiency Ratio's examines firm's efficiency in utilizing its resources

Examines firm's profitability

Comments upon valuation of firm in capital market

 ASSETS
Non-current assets
(a) Property, Plant and Equipment
(b) Capital work-in-progress
(c) Investment Property
(d) Goodwill
(e) Other Intangible assets
(f) Intangible assets under development
(g) Biological Assets other than bearer plants
(h) Financial Assets
(i) Investments
(ii) Trade receivables (Debtors)
(iii) Loans
(iv) Others (to be specified)
(i) Deferred tax assets (net)
(j) Other non-current assets

EQUITY AND LIABILITIES

Equity
(a) Equity Share capital
(b) Other Equity
(c) Preference share

LIABILITIES
Non-current liabilities
(a) Financial Liabilities
(i) Borrowings
(ii) Trade payables (Creditors)
(iii) Other financial liabilities (other than those
specified in
item (b), to be specified)
(b) Provisions
(c) Deferred tax liabilities (Net)
(d) Other non-current liabilities
 ASSETS
Current assets
(a) Inventories
(b) Financial Assets
(i) Investments
(ii) Trade receivables (Debtors)
(iii) Cash and cash equivalents
(iv) Bank balances other than (iii) above
(v) Loans
(vi) Others (to be specified)
(c) Current Tax Assets (Net)
(d) Other current assets

LIABILITIES
Current liabilities
(a) Financial Liabilities
(i) Borrowings
(ii) Trade payables ( Creditors)
(iii) Other financial liabilities (other than those
specified in item (c))
(b) Other current liabilities
(c) Provisions
(d) Current tax liabilities (Net)
Items (in INR) 2018-19 2017-18 2016-17
Sales 74,000 67,100 48,000
Cost of goods sold 62,000 54,725 37,500
Trade Receivables 12,200 11,110 8,100
Inventories 16,400 14,800 10,400
Cash 6,500 6,765 5,800
Other current assets 9,000 9,185 7,700
Current liabilities 21,000 20,350 16,000
Current Ratio 2.1 2.057 2
Quick Ratio 1.32 1.33 1.35
 (figures in '000) 2018-19 2017-18
ASSETS
Current Asset
Inventory 50 46
Trade Receivable 12 11.04
Cash 8 7.36
Investments 5.5 5.06
Loans and Advances 3.75 3.45
Other Current Assets 2.1 1.93
Total Current Assets 81.35 74.84
Non Current Asset
PPE 237 196.71
Capital WIP 29 24.07
Loans and Advances 34 28.22
Investments 21 17.43
Intangible Asset 147 122.01
Total Non Current Assets 468 388.44
Total Assets 549.35 463.28

EQUITY AND LIABILITY

Equity
Share Capital 20 20
Other Equity 257 213
Total Equity 277 233
Liability
Current Liability
Trades Payable 27 23
Borrowings 91 97
Total Current Liability 118 120
Non Current Liability
Borrowings 154.35 110.28
Total Non Current Liability 154.35 110.28
Total Liability 272.35 230.28
Total Equity and Liability 549.35 463.28
Particulars Amount
Gross sales 10.5 lakh
Sales Return 50 Thousand
EBIT 3.5 lakh
10% Debenture 5 lakh
Tax Rate 50% Percentage
Total assets 20 lakh
Equity share capital 5 lakh
Other equity 10 lakh

Total Debt 5
Share holder fund 15
Total Capital 20
Interest 0.5
fixed Charge 0.5
EBT 3
EBIT 350,000
INT. 50,000
EBT 300000
TAX 150000
EAT 150000
ESF 1500000
TD 500000

Solvency
D/E 0.3333333
D/A 0.25
D/C 0.25
ICR 7
FCCR 7
Profitability
OPR 0.35
EBIT Margin 0.35
EBT Margin 0.3
ROE 0.1
ROCE/ROI 0.175
Particulars Amount MPS 50
Sales 15 L Sales 1,500,000
Cost of goods sold 5L COGS 500,000
Operating expense (Ex. GOGS) 2L GP 1,000,000
Non-operating income 1L Minus OE 200,000
10% Term loan (long term) 10 L OI 800,000
Debtors 2L Add NOI 100,000
Inventories 2L EBIT 900,000
Cash 50 k INT. 100,000
Current liabilities 1.5 L EBT 800,000
Dividend 10% TAX 0
Market price per share 50 EAT 800,000
No. of equity share 10k EPS 80
Equity share capital (FV Rs. 10 per share) 1L
Current Ratio 3
Quick Ratio 1.667
Cash Position Ratio 0.33
CFO/CL -

Debt/Equity Ratio 10
Debt/Asset 2.2222222
Debt/Capital 0.9090909
Interest Coverage Ratio 9
Fixed Charge Coverage ratio 9

Inventory Turnover Ratio 7.5

Debtor Turnover Ratio 7.5
Working Capital Turnover Ratio 5
Asset Turnover Ratio 3.3333333
Creditors Turnover Ratio -
Average Collection Period 48.666667
Average Payable Period -

Gross Profit Ratio 0.66

Operating Profit Ratio 0.53
EBIT Margin 0.6
EBT Margin 0.53
Return on Equity 8
Return on Capital Employed 0.8181818

Price Earnings Ratio 0.625

Dividend Yield 0.02
Assets Amount Liability Amount
Fixed Assets 3,000,000 Equity share Capital(FV- Rs10) 1,000,000
Inventory 1,000,000 Reserve and surplus 1,500,000
Prepaid Expenses 500,000 Preference Capital 500,000
Debtors 1,600,000 Bank Loan @ 10% 150,000
Cash at Bank 600,000 15% Debenture 1,000,000
Cash in Hand 250,000 Trade Payable 1,000,000
OS expenses 600,000
Bank Overdraft 1,200,000
Total 6,950,000 Total 6,950,000

Sales 10,000,000 Preference Dividend 5%

Sales Return 500,000 Market rate 75.00
COGS 4,500,000 Dividend 10%
Operating Expenes 2,500,000 Purchases 2,250,000
Other income 1,000,000 Cash Flow from Operating 650,000
Non- Operating income 150,000
Non- Operating Expense 200,000
Tax rate 30%
 FINANCIAL STATEMENT ANALYSIS
Sale 10,000,000 LIQUIDITY RATIOS
Sales Return 500,000 Current Ratio
N Sales 9,500,000.00 Quick Ratio
COGS 4,500,000 Cash Position Ratio
GP 5,000,000.00 CFO/CL
Operating Expenes 2,500,000 SOLVENCY RATIOS
Other income 1,000,000 Debt/Equity Ratio
OP 3,500,000.00 Debt/Asset
Non- Operating income 150,000 Debt/Capital
Non- Operating Expense 200,000 Interest Coverage Ratio
EBIT 3,450,000.00 Fixed Charge Coverage ratio
Interest 165,000.00 EFFICIENCY / TURNOVER RATIOS
EBT 3,285,000.00 Inventory Turnover Ratio
Tax 985,500.00 Debtor Turnover Ratio
EAT 2,299,500.00 Working Capital Turnover Ratio
Preferance dividend 25,000 Asset Turnover Ratio
EAESH 2,274,500.00 Creditors Turnover Ratio
EPS 22.75 Average Collection Period
BVPS 25.00 Average Payable Period

Fixed Charges 190,000.00 Gross Profit Ratio

Current Asset 3,950,000 Operating Profit Ratio
Current Liabilities 2,800,000 EBIT Margin
Quick Ratio 2,950,000 EBT Margin
Cash+Bank 850,000 Return on Equity
Total Debt 2,350,000 Return on Capital Employed
Share Holder Fund 2,500,000 VALUATION
Total Capital 5,350,000 Price Earnings Ratio
Gross working Capital 1,150,000 Price Book Value Ratio
Dividend Yield
Current Asset/CurrentLiability 1.4107 1.4107
Quick Asset/Current Liability 1.0536 1.0536
(Cash+Bank) / Current Liability 0.3036 0.3036
Cash from operating activity / Current Liability 0.2321 0.2321

Total Debt/ Shareholder's Fund 0.9400 0.9400

Total Debt/ Total Asset 0.3381 0.3381
Total Debt/ Total Capital 0.4393 0.4393
EBIT/ Interest 20.9091 20.9091
EBIT/ Fixed Charges 18.1579 18.1579

Sales/Inentory 9.5000 9.5000

Sales/Debtors 5.9375 5.9375
Sales/Gross Working Capital 8.2609 8.2609
Sales/Total Asets 1.3669 1.3669
Purchase/Creditors 2.2500 2.2500
365/Debtor Turnover Ratio 61.4737 61.4737
365/CreditorTurnover Ratio 162.2222 162.2222

Gross Profit / Sales 0.5263 0.5263

Operating Profit/ Sales 0.3684 0.3684
EBIT/ Sales 0.3632 0.3632
EBT/ Sales 0.3458 0.3458
EAESH / Shareholders Fund 0.9098 0.9098
EBIT/ Total Capital 0.6449 0.6449

Market Price of Share/Earnings per share 3.2974 3.2974

Market Price of Share/Book value per share 3.0000 3.0000
Annual dividend/Market Price of Share 0.0133 0.0133
 985500
2,299,500.00

22.745
 Profit and Loss Account Balance Sheet
Opening Stock 5,000 Equity Share Capital 200,000 Land and Building
Sales 100,000 Preference Share Capital 100,000 Plant and Machinery
Purchases 50,000 Reserve and Surplus 50,000 Furniture
Closing Stock 20,000 Debenture 200,000 Inventory
Operating Exp. 15,000 Loans 75,000 Debtors
EBIT 50,000 Creditors 25,000 Cash + Bank
Interest 5,000 Bank Overdraft 10,000 Total
EBT 45,000 Total 660,000
Tax 3,000
EAT 42,000 Interest 5,000 Current Asset
Pref. Dividend 12,000 EBIT 50,000 Current Liabilities
EAESH 30,000 EAESH 30,000 Quick Ratio
Creditors 25,000 Total Debt
NOTES Debtors 127,500 Share Holder Fund
•No of equity shares = 50,000 Cash + Bank 17,500 Total Capital
•50% of the loan is short term in nature Net Sales 100,000 Gross working Capital
Fixed Charge 17,000
Gross Profit 65,000
150,000 FINANCIAL STATEMENT ANALYSIS
130,000 LIQUIDITY RATIOS
120,000 Current Ratio 3.586207
115,000 Quick Ratio 2
127,500 Cash Position Ratio 0.241379
17,500 CFO/CL
660,000 SOLVENCY RATIOS
Debt/Equity Ratio 1.14
Debt/Asset 0.431818
260,000 Debt/Capital 0.485106
72500 Interest Coverage Ratio 10
145,000 Fixed Charge Coverage ratio 2.941176
285,000 EFFICIENCY / TURNOVER RATIOS
250,000 Inventory Turnover Ratio 0.869565
587,500 Debtor Turnover Ratio 0.784314
187,500 Working Capital Turnover Ratio 0.533333
Asset Turnover Ratio 0.151515
Creditors Turnover Ratio 2
Average Collection Period 465.375
Average Payable Period 182.5

Gross Profit Ratio 0.65

Operating Profit Ratio 0.5
EBIT Margin 0.5
EBT Margin 0.45
Return on Equity 0.12
Return on Capital Employed 0.085106