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Financial Management Project On Working Capital Management Prateek Chaubey-24021 Rahul Tanwar-24025 Saif Abbas-24029
| Date post: | 21-Apr-2017 |
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Financial Management Project On
Working Capital Management
Prateek Chaubey-24021Rahul Tanwar-24025
Saif Abbas-24029
Contents Introduction
Financial Ratios
I. MRF
II. Apollo
III. Ceat
IV. JK
Industry Analysis
Conclusion
Introduction
The industries considered are all part of the Automotive Tyre Manufacturing Sector.
The Working Capital Analysis for the 4 companies has been carried out.
MRF AnalysisAll Ratios Mar’16 Mar’15 Mar’14 Mar’13
Inventory Conversion Period (In Days) 60.03 78.13 79.50 69.30
Debtor Conversion Period (In Days) 31.91 45.14 45.29 42.48
Operating Cycle (In Days) 91.94 123.28 124.78 111.77
Credit Deferral Period (In Days) 43.40 46.95 44.46 42.12
Cash Conversion Cycle (In Days) 48.54 76.33 80.32 69.66
Debtor as % of Current Assets 0.31 0.32 0.33 0.39
Inventory as % of Current Assets 0.12 0.14 0.32 0.38
Current Ratio 0.90 0.95 1.03 1.02
Inventory Turnover Ratio 1.83 2.20 4.59 5.27
Working Capital Turnover Ratio -19.73 -46.72 91.84 122.45
Apollo AnalysisAll Ratios Mar’16 Mar’15 Mar’14 Mar'13
Inventory Conversion Period (In Days) 80.72 79.05 74.90 66.63
Debtor Conversion Period (In days) 12.85 11.45 10.76 13.67
Operating Cycle (In Days) 93.57 90.50 85.66 80.30
Credit Deferral Period (In Days) 59.33 50.85 45.41 42.21
Cash Conversion Cycle(In Days) 34.24 39.65 40.25 38.09
Debtor as % of Current Assets 0.12 0.16 0.12 0.16
Inventory as % of Current Assets 0.44 0.59 0.63 0.65
Current Ratio 1.07 0.97 0.90 0.97
Inventory Turnover Ratio 4.52 4.62 4.87 5.48
Working Capital Turnover Ratio 58.15 -125.83 -38.38 -146.73
CEAT AnalysisYear/CCD Mar'16 Mar'15 Mar'14 Mar’13
Inventory Conversion Period (In Days) 74.51 72.28 65.78 60.03
Debtor Conversion Period (In Days) 41.35 45.13 46.06 46.67
Operating Cycle (In Days) 115.86 117.41 111.84 106.70
Credit Deferral Period (In Days) 59.60 70.74 72.19 78.54
Cash Conversion Cycle (In Days) 56.26 46.66 39.66 28.16
Debtor as % of Current Assets 0.40 0.34 0.43 0.46
Inventory as % of Current Assets 0.43 0.32 0.43 0.39
Current Ratio 1.21 1.29 0.90 0.76
Inventory Turnover Ratio 6.17 5.05 5.55 6.08
Working Capital Turnover Ratio 21.62 12.74 -27.62 -11.35
JK AnalysisAll Ratios Mar’16 Mar’15 Mar’14 Mar’13
Inventory Conversion Period (In Days) 80.49 69.65 71.23 69.52
Debtor Conversion Period (In Days) 76.55 72.78 64.49 59.95
Operating Cycle (In Days) 157.04 142.42 135.73 129.47
Credit Deferral Period (In Days) 94.22 83.96 75.53 80.96
Cash Conversion Cycle (In Days) 62.82 58.46 60.19 48.52
Debtor as % of Current Assets 0.47 0.51 0.51 0.43
Inventory as % of Current Assets 0.29 0.30 0.32 0.38
Current Ratio 0.96 0.91 0.95 0.91
Inventory Turnover Ratio 4.53 5.24 5.12 5.25
Working Capital Turnover Ratio -54.66 -25.97 -49.52 -27.02
Cost of Rubber(most produced product)
Product Name Value% of RM costto Total Cost
MRF 5,708.62 51.14
Apollo Tyres 2,433.61 52.43
JK Tyre 1,753.07 52.96
Ceat 1,451.97 49.16
in Rs. Cr.
Competitors
Company Name Last Price Market Cap. Sales
Turnover Net Profit Total Assets
MRF 47,270.50 20,048.10 20,243.94 2,327.72 8,767.84
Apollo 180.85 9,205.71 8,701.64 844.86 4,582.72
JK 118.4 2,685.47 5,880.43 400.96 3,794.64
Ceat 1,161.05 4,696.46 5,494.15 452.52 2,603.13
Inventory conversion period
March '16 March '15 March '14 March '130
10
20
30
40
50
60
70
80
90
74.5172.28
65.78
60.03
80.72 79.0574.9
66.63
60.03
78.13 79.5
69.3
80.49
69.65 71.23 69.52
CEATAPOLLOMRFJK
Debtor conversion period
March '16 March '15 March '14 March '130
10
20
30
40
50
60
70
80
90
41.3545.13 46.06 46.67
12.85 11.45 10.7613.67
31.91
45.14 45.2942.48
76.5572.78
64.4959.95
CEATAPOLLOMRFJK
Operating cycle
March '16 March '15 March '14 March '130
20
40
60
80
100
120
140
160
180
115.86 117.41111.84
106.7
93.57 90.585.66
80.3
91.94
123.28 124.78
111.77
157.04
142.42135.73
129.47
CEATAPOLLOMRFJK
Credit deferral period
March '16 March '15 March '14 March '130
10
20
30
40
50
60
70
80
90
100
59.6
70.74 72.19
78.54
59.33
50.8545.41
42.2143.446.95
44.4642.12
94.22
83.96
75.5380.96
CEATAPOLLOMRFJK
Cash conversion cycle
March '16 March '15 March '14 March '130
10
20
30
40
50
60
70
80
90
56.26
46.66
39.66
28.16
34.2439.65 40.25 38.09
48.54
76.3380.32
69.66
62.8258.46 60.19
48.52 CEATAPOLLOMRFJK
Debtors as % of Current Assets
March '16 March '15 March '14 March '130
0.1
0.2
0.3
0.4
0.5
0.6
0.4
0.34
0.430.46
0.12
0.16
0.12
0.16
0.31 0.32 0.33
0.39
0.47
0.51 0.5
0.43
CEATAPOLLOMRFJK
Inventory as % of Current Assets
March '16 March '15 March '14 March '130
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.43
0.32
0.430.39
0.44
0.590.63
0.65
0.120.14
0.32
0.38
0.29 0.30.32
0.38CEATAPOLLOMRFJK
Current Ratio
March '16 March '15 March '14 March '130
0.2
0.4
0.6
0.8
1
1.2
1.4
1.211.29
0.9
0.76
1.07
0.970.9
0.970.9
0.951.03 1.02
0.960.91
0.950.91
CEATAPOLLOMRFJK
Inventory Turnover Ratio
March '16 March '15 March '14 March '130
1
2
3
4
5
6
7
6.17
5.05
5.55
6.08
4.52 4.624.87
5.48
1.832.2
4.59
5.27
4.53
5.24 5.12 5.25
CEATAPOLLOMRFJK
Working capital turnover ratio
March '16 March '15 March '14 March '13
-200
-150
-100
-50
0
50
100
150
21.6212.74
-27.62-11.35
58.15
-125.83
-38.38
-146.73
-19.73
-46.72
91.84
122.45
-54.66
-25.97
-49.52
-27.02
CEATAPOLLOMRFJK
COMPARISION OF P&L ACCOUNTProfit & Loss account (in Rs. Cr.)Company Name MRF Apollo Tyres Ceat JK Tyre & IndYear Mar '16 Mar '16 Mar '16 Mar '16
Sales Turnover 22,521.35 9,704.61 6,156.52 6,564.92
Excise Duty 2,277.41 1,002.97 662.37 684.49
Net Sales 20,243.94 8,701.64 5,494.15 5,880.43
Other Income 184.93 53.64 35.76 0.79
Stock Adjustments 14.95 -126.62 2.32 -14.06
Total Income 20,443.82 8,628.66 5,532.23 5,867.16
Raw Materials 11,660.63 4,930.21 3,247.83 3,400.53
Power & Fuel Cost 842.05 282.2 42.81 238.53
Employee Cost 1,283.27 566.49 367.17 534.05
Other Manufacturing Expenses 0 0 0 0
Selling and Admin Expenses 0 0 0 0
Miscellaneous Expenses 2,173.12 1,235.38 1,048.78 702.49
Preoperative Exp Capitalised 0 0 0 0
Total Expenses 15,959.07 7,014.28 4,706.59 4,875.60
COMPANY MRF Apollo Tyres Ceat JK Tyre & IndYEAR Mar '16 Mar '16 Mar '16 Mar '16
Operating Profit 4,299.82 1,560.74 789.88 990.77PBDIT 4,484.75 1,614.38 825.64 991.56
Interest 339.72 88.33 89.16 229.03
PBDT 4,145.03 1,526.05 736.48 762.53
Depreciation 734.76 268.61 100.42 172.3
Other Written Off 0 0 0 0
Profit Before Tax 3,410.27 1,257.44 636.06 590.23
Extra-ordinary items 0 0 0 0
PBT (Post Extra-ord Items) 3,410.27 1,257.44 636.06 590.23
Tax 1,082.55 404.99 183.55 189.27
Reported Net Profit 2,327.72 852.46 452.52 400.96Total Value Addition 4,298.44 2,084.06 1,458.76 1,475.07
Preference Dividend 0 0 0 0
Equity Dividend 42.41 101.81 46.52 56.7
Corporate Dividend Tax 8.62 20.73 7.14 11.55
Shares in issue (lakhs) 42.41 5,090.25 404.5 2,268.13
Earning Per Share (Rs) 5,488.43 16.75 111.87 17.68Equity Dividend (%) 1,000.00 200 115 125
Book Value (Rs) 16,020.04 78.45 492.28 62.46
Per share data (annualised)
Income
Expenditure
COMPARISION OF FINANCIAL POSITIONCOMPANY MRF Apollo Tyres Ceat JK Tyre & IndYear Mar '16 Mar '16 Mar '16 Mar '16
Sources Of FundsTotal Share Capital 4.24 50.9 40.45 45.36
Equity Share Capital 4.24 50.9 40.45 45.36
Share Application Money 0 0 0 0
Preference Share Capital 0 0 0 0
Reserves 6,790.09 3,942.38 1,950.81 1,371.31
Revaluation Reserves 0 3.12 0 0
Networth 6,794.33 3,996.40 1,991.26 1,416.67Secured Loans 1,056.64 244.79 556.45 2,229.51
Unsecured Loans 916.87 341.51 55.43 148.46
Total Debt 1,973.51 586.3 611.88 2,377.97Total Liabilities 8,767.84 4,582.70 2,603.14 3,794.64
Gross Block 8,125.62 5,153.74 2,832.25 5,216.38
Less: Accum. Depreciation 3,531.82 2,052.43 869.7 1,888.98
Net Block 4,593.80 3,101.31 1,962.55 3,327.40Capital Work in Progress 1,058.40 386.87 213.45 88.92
Investments 2,789.31 793.75 267.9 91.59Inventories 1,879.74 1,022.90 619.25 739.68
Sundry Debtors 1,831.72 292.76 577.94 1,210.48
Cash and Bank Balance 80.45 289.38 24.16 62.44
Total Current Assets 3,791.91 1,605.04 1,221.35 2,012.60
Loans and Advances 575.69 987.02 292.49 832.93
Fixed Deposits 0 0 0 0
Total CA, Loans & Advances 4,367.60 2,592.06 1,513.84 2,845.53
Deffered Credit 0 0 0 0
Current Liabilities 3,682.10 1,748.26 1,246.74 2,181.68
Provisions 359.17 543.01 107.87 377.12
Total CL & Provisions 4,041.27 2,291.27 1,354.61 2,558.80
Net Current Assets 326.33 300.79 159.23 286.73Miscellaneous Expenses 0 0 0 0
Total Assets 8,767.84 4,582.72 2,603.13 3,794.64Contingent Liabilities 1,062.61 563.18 548.9 100.68
Book Value (Rs) 16,020.04 78.45 492.28 62.46
Application Of Funds
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