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INTRODUCTION TO SINGER LANKA PLC
Singer
(Sri Lanka) PLC is a Sri Lankan holding company engaged
in retailing and wholesale marketing home
appliances and furniture. The company is also taking part in
financial services and manufacturing businesses. The company is listed on
the Colombo Stock Exchange since 1981 and in 2017, the Sri
Lankan conglomerate, Hayleys acquired the majority of the
shares. The Singer Corporation entered the Sri Lankan market in 1877
with the sale of sewing machines. The company was incorporated as a
limited liability company in 1974 and became a quoted company in the
Colombo Stock Exchange in 1981. In 1988, the company started manufacturing
refrigerators through its subsidiary, Regnis Lanka. The first Singer Mega shop
opened in 1998 and in 2000 the company acquired the local refrigerator
manufacturing brand, Sisil. In 2011, the company entered into the sale of
smartphone business and the 400th Singer Mega shop was opened in 2013. In 2017,
Hayleys acquired a controlling stake of the company and thus became the parent
company of Singer (Sri Lanka). The value of the acquisition stood at LKR
10.9 billion, making it one of the largest acquisitions for a listed company in
Sri Lanka. The company owns the subsidiaries of Singer Finance (Lanka), Singer
Industries (Ceylon), Regnis Lanka, Realty (Lanka) Ltd, Singer Digital Media
(Pvt) Ltd, and Singer Business School (Pvt) Ltd. The company have
chosen IFS AB's software as their ERP system. In 2020, Singer
(Sri Lanka) emerged as the market-leading seller for Dell laptops in
Sri Lanka. Due to the COVID-19 pandemic, increased incidences
of working from home and learning from home arrangements,
the demand for consumer electronics have risen and the company posted a robust
LKR 16.7 billion sales in the second quarter of 2020.The company announced a
3-for-1 stock split in 2021. Also in 2021, the company won the
People's Brand of the Year for the consecutive 15th time at the
SLIM-Nielsen Awards. The company also reclaimed the award for Youth Choice
Brand of the Year after three years.
FIANCIAL INCOME STATEMENTS OF SINGER
LANKA PLC – 2015-2020
|
PROFIT & LOSS ACCOUNT |
||||||
|
YEAR |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Revenue |
33,311,395,189 |
39,267,202,832 |
50,910,032,892 |
43,617,889,429 |
44,125,910,546 |
54,863,685,740 |
|
Cost
of Sales |
-23,531,268,883 |
-27,849,435,276 |
-36,728,240,797 |
-31,320,692,490 |
-31,128,174,786 |
-39,896,592,377 |
|
Direct
Interest Cost |
|
- |
|
|
|
|
|
Gross
Profit |
9,780,126,306 |
11,417,767,556 |
14,181,792,095 |
12,297,196,939 |
12,997,735,760 |
14,967,093,363 |
|
Other
Income |
296,622,470 |
431,704,582 |
1,088,431,100 |
590,066,636 |
300,079,494 |
265,401,532 |
|
Selling
and Administrative Expenses |
-7,649,157,451 |
-9,069,711,231 |
-11,961,817,260 |
-10,233,588,367 |
-9,810,423,822 |
-10,528,254,382 |
|
Impairment
Loss on Trade Receivables |
|
|
|
-212,806,334 |
-630,876,357 |
-459,524,068 |
|
Other
Expenses |
-269,521,578 |
|
|
|
|
|
|
Operating
Profit |
2,158,069,747 |
2,779,760,907 |
3,308,405,935 |
2,440,868,874 |
2,856,515,075 |
4,244,716,445 |
|
Finance
Cost |
-1,094,741,462 |
-1,619,789,209 |
-2,494,325,151 |
-2,774,862,229 |
-3,323,287,328 |
-2,174,970,083 |
|
Finance
Income |
164,053,234 |
338,358,270 |
344,598,049 |
453,906,643 |
362,085,921 |
639,103,042 |
|
Net
Finance Cost |
-930,688,228 |
-1,281,430,939 |
-2,149,727,102 |
-2,320,955,586 |
-2,961,201,407 |
-1,535,867,041 |
|
Value
Added Tax on Financial Services |
-31,700,000 |
-47,800,000 |
-52,800,000 |
-31,200,000 |
-51,000,000 |
-79,800,000 |
|
Profit
Before Tax |
1,195,681,519 |
1,450,529,968 |
1,105,878,833 |
88,713,288 |
-155,686,332 |
2,629,049,404 |
|
Income
Tax Expense |
-335,976,573 |
-346,085,301 |
-106,855,559 |
51,837,151 |
168,425,711 |
-879,873,665 |
|
Profit
for the Year |
859,704,946 |
1,104,444,667 |
999,023,274 |
140,550,439 |
12,739,379 |
1,749,175,739 |
OTHER INFORMATIONS
|
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Earnings per Share - Basic (Rs.)* |
8.82 |
2.66 |
0.37 |
0.03 |
1.55 |
|
Dividends per Share (Rs.) |
8.8 |
2.2 |
0.65 |
0.25 |
0.63 |
|
Market share price |
126.2 |
40.2 |
25 |
17.4 |
20.2 |
FINACIAL POSITION OF SINGER LANKA PLC
– 2015-2020
|
STATEMENT OF FINANCIAL POSITION |
||||||
|
|
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
ASSETS |
|
|
|
|
|
|
|
Property, Plant & Equipment |
2,600,437,050 |
3,022,805,042 |
3,082,597,562 |
3,498,021,139 |
3,651,860,201 |
3,578,265,826 |
|
Right-of-use Assets |
|
|
|
|
3,986,189,712 |
3,863,148,390 |
|
Intangible Assets |
200,296,513 |
213,157,147 |
207,145,304 |
201,000,888 |
196,451,084 |
222,618,380 |
|
Investment in Subsidiaries |
992,241,596 |
2,455,179,989 |
2,925,222,314 |
2,900,872,703 |
2,968,023,473 |
2,968,023,473 |
|
Equity - Accounted Investees |
48,000,000 |
- |
|
|
|
|
|
Other Investments |
616,303,000 |
929,110,000 |
929,110,000 |
616,202,652 |
17,020,000 |
24,948,407 |
|
Trade and Other Receivables |
1,620,582,297 |
1,888,466,783 |
1,341,906,019 |
1,432,236,418 |
833,200,903 |
802,806,286 |
|
Deferred Tax Assets |
124,492,574 |
147,270,286 |
69,642,532 |
264,757,033 |
773,456,037 |
832,572,959 |
|
Non-Current
Assets |
6,202,353,030 |
8,655,989,247 |
8,555,623,731 |
8,913,090,833 |
12,426,201,410 |
12,292,383,721 |
|
Inventories |
6,677,026,859 |
7,793,495,049 |
10,741,281,063 |
12,135,241,818 |
14,273,238,762 |
16,150,896,747 |
|
Loans due from Related Parties |
1,122,638,197 |
1,378,074,696 |
1,219,150,767 |
1,215,819,977 |
446,000,000 |
- |
|
Income Tax Receivables |
|
1,767,152 |
157,630,474 |
240,187,686 |
401,786,969 |
- |
|
Trade and Other Receivables |
8,325,781,111 |
9,886,667,043 |
12,150,611,598 |
12,860,387,063 |
12,424,217,535 |
12,965,213,666 |
|
Amounts due from Related Parties |
234,256,922 |
74,782,845 |
185,396,027 |
3,310,666 |
32,055,166 |
38,813,530 |
|
Other Financial Assets |
|
|
|
85,648,063 |
27,087,623 |
|
|
Deposits with Banks |
- |
- |
- |
|
- |
|
|
Other Investments |
- |
- |
- |
312,090,000 |
600,090,000 |
|
|
Cash and Cash Equivalents |
876,593,992 |
1,039,586,108 |
1,017,627,946 |
1,337,712,692 |
394,858,144 |
783,541,083 |
|
Current
Assets |
17,236,297,081 |
20,174,372,893 |
25,471,697,875 |
28,190,397,965 |
28,599,334,199 |
29,938,465,026 |
|
Total
Assets |
23,438,650,111 |
28,830,362,140 |
34,027,321,606 |
37,103,488,798 |
41,025,535,609 |
42,230,848,747 |
|
Equity |
|
|
|
|
|
|
|
Stated Capital |
626,048,050 |
626,048,050 |
626,048,050 |
626,048,050 |
626,048,050 |
626,048,050 |
|
Capital Reserves |
857,580,019 |
1,065,542,144 |
847,555,412 |
1,158,333,041 |
1,142,409,257 |
1,170,907,941 |
|
Other Component of
Equity |
|
|
|
|
|
6,025,590 |
|
Statutory Reserve |
- |
- |
- |
- |
- |
- |
|
Revenue Reserves |
3,612,778,716 |
4,242,212,861 |
3,326,088,413 |
2,851,601,145 |
2,223,047,375 |
3,277,634,799 |
|
Total Equity Attributable to
Owners of the Company |
5,096,406,785 |
5,933,803,055 |
4,799,691,875 |
4,635,982,236 |
3,991,504,682 |
5,080,616,380 |
|
Non-Controlling Interests |
- |
- |
- |
- |
- |
- |
|
Total
Equity |
5,096,406,785 |
5,933,803,055 |
4,799,691,875 |
4,635,982,236 |
3,991,504,682 |
5,080,616,380 |
|
Liabilities |
|
|
|
|
|
|
|
Interest-Bearing Loans and
Borrowings |
6,250,000,000 |
6,000,000,000 |
2,532,149,832 |
7,373,929,275 |
6,154,765,222 |
3,000,000,000 |
|
Lease Liability - Non-current |
|
|
|
|
3,855,725,216 |
3,786,997,415 |
|
Defined Benefit Obligation |
457,181,699 |
476,754,466 |
574,009,152 |
630,757,966 |
636,683,474 |
654,639,183 |
|
Security Deposits |
851,794,462 |
1,018,451,850 |
1,199,127,333 |
1,332,128,051 |
1,329,962,876 |
1,293,744,090 |
|
Other Financial Liabilities |
- |
- |
|
|
|
|
|
Deferred Revenue |
|
|
|
85,928,321 |
91,724,769 |
107,608,332 |
|
Other Non-Current Liabilities |
|
|
|
143,126,349 |
81,590,330 |
142,413,444 |
|
Non-Current
Liabilities |
7,558,976,161 |
7,495,206,316 |
4,305,286,317 |
9,565,869,962 |
12,150,451,887 |
8,985,402,464 |
|
Trade and Other Payables |
3,345,457,979 |
4,590,536,979 |
6,076,063,211 |
5,114,175,724 |
6,636,833,030 |
13,559,595,188 |
|
Deferred Revenue |
318,459,902 |
438,989,246 |
246,289,945 |
182,534,759 |
167,724,663 |
183,469,610 |
|
Income Tax Payable |
133,791,489 |
- |
- |
|
|
25,209,018 |
|
Dividends Payable |
17,515,071 |
20,523,857 |
539,610,179 |
49,212,196 |
39,150,190 |
58,822,197 |
|
Amounts due to Related Parties -
Trade |
771,744,188 |
876,918,882 |
2,639,361,427 |
2,762,311,875 |
3,418,630,322 |
4,259,226,264 |
|
Amounts due to Related Parties -
Non-Trade |
125,239,131 |
119,738,131 |
|
|
|
|
|
Other Financial Liabilities |
- |
- |
8,337,510 |
|
- |
|
|
Lease Liability - Current |
|
|
|
|
512,501,477 |
624,047,914 |
|
Interest-Bearing Loans and
Borrowings |
6,071,059,405 |
8,652,549,543 |
14,175,592,417 |
13,376,313,438 |
12,607,357,238 |
8,132,720,527 |
|
Bank Overdrafts |
|
702,096,131 |
1,237,088,725 |
1,417,088,608 |
1,501,382,120 |
1,321,739,185 |
|
Current
Liabilities |
10,783,267,165 |
15,401,352,769 |
24,922,343,414 |
22,901,636,600 |
24,883,579,040 |
28,164,829,903 |
|
Total Liabilities |
18,342,243,326 |
22,896,559,085 |
29,227,629,731 |
32,467,506,562 |
37,034,030,927 |
37,150,232,367 |
|
Total Equity and Liabilities |
23,438,650,111 |
28,830,362,140 |
34,027,321,606 |
37,103,488,798 |
41,025,535,609 |
42,230,848,747 |
COMPARATIVE STATEMENTS
Comparative
statements was calculated between comparing with previous year of the
corresponding year. The percentage changes of the financial elements are given
in the below tables.
Income statements – in %
|
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Revenue |
17.88 |
29.65 |
-14.32 |
1.16 |
24.33 |
|
Cost of Sales |
18.35 |
31.88 |
-14.72 |
-0.61 |
28.17 |
|
Gross Profit |
16.74 |
24.21 |
-13.29 |
5.70 |
15.15 |
|
Other Income |
45.54 |
152.12 |
-45.79 |
-49.14 |
-11.56 |
|
Selling and Administrative Expenses |
18.57 |
31.89 |
-14.45 |
-4.14 |
7.32 |
|
Impairment Loss on Trade Receivables |
196.46 |
-27.16 |
|||
|
Operating Profit |
28.81 |
19.02 |
-26.22 |
17.03 |
48.60 |
|
Finance Cost |
47.96 |
53.99 |
11.25 |
19.76 |
-34.55 |
|
Finance Income |
106.25 |
1.84 |
31.72 |
-20.23 |
76.51 |
|
Net Finance Cost |
37.69 |
67.76 |
7.97 |
27.59 |
-48.13 |
|
Value Added Tax on Financial Services |
50.79 |
10.46 |
-40.91 |
63.46 |
56.47 |
|
Profit Before Tax |
21.31 |
-23.76 |
-91.98 |
-275.49 |
-1788.68 |
|
Income Tax Expense |
3.01 |
-69.12 |
-148.51 |
224.91 |
-622.41 |
|
Profit for the Year |
28.47 |
-9.55 |
-85.93 |
-90.94 |
13630.46 |
Financial position – in %
|
Year |
2016 |
2017 |
2018 |
2019 |
2020 |
|
ASSETS |
|||||
|
Property, Plant & Equipment |
16.24 |
1.98 |
13.48 |
4.40 |
-2.02 |
|
Right-of-use Assets |
-3.09 |
||||
|
Intangible Assets |
6.42 |
-2.82 |
-2.97 |
-2.26 |
13.32 |
|
Investment in Subsidiaries |
147.44 |
19.14 |
-0.83 |
2.31 |
0.00 |
|
Equity - Accounted Investees |
|||||
|
Other Investments |
50.76 |
0.00 |
-33.68 |
-97.24 |
46.58 |
|
Trade and Other Receivables |
16.53 |
-28.94 |
6.73 |
-41.83 |
-3.65 |
|
Deferred Tax Assets |
18.30 |
-52.71 |
280.17 |
192.14 |
7.64 |
|
Non-Current
Assets |
39.56 |
-1.16 |
4.18 |
39.42 |
-1.08 |
|
Inventories |
16.72 |
37.82 |
12.98 |
17.62 |
13.16 |
|
Loans due from Related Parties |
22.75 |
-11.53 |
-0.27 |
-63.32 |
|
|
Trade and Other Receivables |
18.75 |
22.90 |
5.84 |
-3.39 |
4.35 |
|
Amounts due from Related Parties |
-68.08 |
147.91 |
-98.21 |
868.24 |
21.08 |
|
Other Financial Assets |
-68.37 |
-100.00 |
|||
|
Other Investments |
92.28 |
-100.00 |
|||
|
Cash and Cash Equivalents |
18.59 |
-2.11 |
31.45 |
-70.48 |
98.44 |
|
Current
Assets |
17.05 |
26.26 |
10.67 |
1.45 |
4.68 |
|
Total
Assets |
23.00 |
18.03 |
9.04 |
10.57 |
2.94 |
|
Equity |
|||||
|
Stated Capital |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Capital Reserves |
24.25 |
-20.46 |
36.67 |
-1.37 |
2.49 |
|
Revenue Reserves |
17.42 |
-21.60 |
-14.27 |
-22.04 |
47.44 |
|
Total Equity Attributable to Owners of
the Company |
16.43 |
-19.11 |
-3.41 |
-13.90 |
27.29 |
|
Total
Equity |
16.43 |
-19.11 |
-3.41 |
-13.90 |
27.29 |
|
Liabilities |
|||||
|
Interest-Bearing Loans and Borrowings |
-4.00 |
-57.80 |
191.21 |
-16.53 |
-51.26 |
|
Lease Liability - Non-current |
-1.78 |
||||
|
Defined Benefit Obligation |
4.28 |
20.40 |
9.89 |
0.94 |
2.82 |
|
Security Deposits |
19.57 |
17.74 |
11.09 |
-0.16 |
-2.72 |
|
Deferred Revenue |
6.75 |
17.32 |
|||
|
Other Non-Current Liabilities |
-42.99 |
74.55 |
|||
|
Non-Current Liabilities |
-0.84 |
-42.56 |
122.19 |
27.02 |
-26.05 |
|
Trade and Other Payables |
37.22 |
32.36 |
-15.83 |
29.77 |
104.31 |
|
Deferred Revenue |
37.85 |
-43.90 |
-25.89 |
-8.11 |
9.39 |
|
Amounts due to Related Parties - Trade |
13.63 |
200.98 |
4.66 |
23.76 |
24.59 |
|
Amounts due to Related Parties -
Non-Trade |
-4.39 |
-100.00 |
|||
|
Other Financial Liabilities |
-100.00 |
||||
|
Lease Liability - Current |
21.77 |
||||
|
Interest-Bearing Loans and Borrowings |
42.52 |
63.83 |
-5.64 |
-5.75 |
-35.49 |
|
Bank Overdrafts |
76.20 |
14.55 |
5.95 |
-11.97 |
|
|
Current
Liabilities |
42.83 |
61.82 |
-8.11 |
8.65 |
13.19 |
|
Total Liabilities |
24.83 |
27.65 |
11.08 |
14.06 |
0.31 |
|
Total
Equity and Liabilities |
23.00 |
18.03 |
9.04 |
10.57 |
2.94 |
TREND ANALYSIS
Trend analysis was
conducted by using 2015 as the base year.
Trend of the financial
elements for five years (2016 to 2020) are given below;
Income Statement
|
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Revenue |
100 |
117.88 |
152.83 |
130.94 |
132.46 |
164.70 |
|
Cost of Sales |
100 |
118.35 |
156.08 |
133.10 |
132.28 |
169.55 |
|
Gross Profit |
100 |
116.74 |
145.01 |
125.74 |
132.90 |
153.04 |
|
Other Income |
100 |
145.54 |
366.94 |
198.93 |
101.17 |
89.47 |
|
Selling and Administrative
Expenses |
100 |
118.57 |
156.38 |
133.79 |
128.25 |
137.64 |
|
Other Expenses |
100 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Operating Profit |
100 |
128.81 |
153.30 |
113.10 |
132.36 |
196.69 |
|
Finance Cost |
100 |
147.96 |
227.85 |
253.47 |
303.57 |
198.67 |
|
Finance Income |
100 |
206.25 |
210.05 |
276.68 |
220.71 |
389.57 |
|
Net Finance Cost |
100 |
137.69 |
230.98 |
249.38 |
318.17 |
165.02 |
|
Value Added Tax on Financial
Services |
100 |
150.79 |
166.56 |
98.42 |
160.88 |
251.74 |
|
Profit Before Tax |
100 |
121.31 |
92.49 |
7.42 |
-13.02 |
219.88 |
|
Income Tax Expense |
100 |
103.01 |
31.80 |
-15.43 |
-50.13 |
261.89 |
|
Profit for the Year |
100 |
128.47 |
116.21 |
16.35 |
1.48 |
203.46 |
Trend
Lines of the main operating elements
Financial
Position
|
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
ASSETS |
||||||
|
Property,
Plant & Equipment |
100 |
116.24 |
118.54 |
134.52 |
140.43 |
137.60 |
|
Intangible
Assets |
100 |
106.42 |
103.42 |
100.35 |
98.08 |
111.14 |
|
Trade
and Other Receivables |
100 |
116.53 |
82.80 |
88.38 |
51.41 |
49.54 |
|
Non-Current
Assets |
100 |
139.56 |
137.94 |
143.70 |
200.35 |
198.19 |
|
Loans
due from Related Parties |
100 |
122.75 |
108.60 |
108.30 |
39.73 |
|
|
Trade
and Other Receivables |
100 |
118.75 |
145.94 |
154.46 |
149.23 |
155.72 |
|
Current
Assets |
100 |
117.05 |
147.78 |
163.55 |
165.93 |
173.69 |
|
Capital
Reserves |
100 |
124.25 |
98.83 |
135.07 |
133.21 |
136.54 |
|
Total
Equity |
100 |
116.43 |
94.18 |
90.97 |
78.32 |
99.69 |
|
Interest-Bearing
Loans and Borrowings |
100 |
96.00 |
40.51 |
117.98 |
98.48 |
48.00 |
|
Defined
Benefit Obligation |
100 |
104.28 |
125.55 |
137.97 |
139.26 |
143.19 |
|
Trade
and Other Payables |
100 |
137.22 |
181.62 |
152.87 |
198.38 |
405.31 |
|
Income
Tax Payable |
100 |
0.00 |
0.00 |
18.84 |
||
|
Amounts
due to Related Parties - Trade |
100 |
113.63 |
342.00 |
357.93 |
442.97 |
551.90 |
|
Interest-Bearing
Loans and Borrowings |
100 |
142.52 |
233.49 |
220.33 |
207.66 |
133.96 |
|
Current
Liabilities |
100 |
142.83 |
231.12 |
212.38 |
230.76 |
261.19 |
|
Total
Equity and Liabilities |
100 |
123.00 |
145.18 |
158.30 |
175.03 |
180.18 |
Trend lines of financial elements
COMMON SIZE STATEMENTS
Common size Income
Statements
|
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
Common size percentage |
|||||
|
Revenue |
100 |
100 |
100 |
100 |
100 |
|
Cost of Sales |
70.92 |
72.14 |
71.81 |
70.54 |
72.72 |
|
Gross Profit |
29.08 |
27.86 |
28.19 |
29.46 |
27.28 |
|
Other Income |
1.1 |
2.14 |
1.35 |
0.68 |
0.48 |
|
Selling and Administrative Expenses |
23.1 |
23.5 |
23.46 |
22.23 |
19.19 |
|
Impairment Loss on Trade Receivables |
0 |
0 |
0.49 |
1.43 |
0.84 |
|
Operating Profit |
7.08 |
6.5 |
5.6 |
6.47 |
7.74 |
|
Finance Cost |
4.13 |
4.9 |
6.36 |
7.53 |
-3.96 |
|
Finance Income |
0.86 |
0.68 |
1.04 |
0.82 |
1.16 |
|
Net Finance Cost |
3.26 |
4.22 |
5.32 |
6.71 |
2.8 |
|
Value Added Tax on Financial Services |
0.12 |
0.1 |
0.07 |
0.12 |
0.15 |
|
Profit Before Tax |
3.69 |
2.17 |
0.2 |
0.35 |
4.79 |
|
Income Tax Expense |
0.88 |
0.21 |
0.12 |
0.38 |
1.6 |
|
Profit for the Year |
2.81 |
1.96 |
0.32 |
0.03 |
3.19 |
Common size Balance sheets
|
Common size percentage |
|||||
|
2016 |
2017 |
2018 |
2019 |
2020 |
|
|
ASSETS |
|||||
|
Property,
Plant & Equipment |
10.48 |
9.06 |
10.28 |
8.90 |
8.47 |
|
Right-of-use
Assets |
0.00 |
0.00 |
0.00 |
9.72 |
9.15 |
|
Intangible
Assets |
0.74 |
0.61 |
0.59 |
0.48 |
0.53 |
|
Investment
in Subsidiaries |
8.52 |
8.60 |
8.53 |
7.23 |
7.03 |
|
Other
Investments |
3.22 |
2.73 |
1.81 |
0.04 |
0.06 |
|
Trade
and Other Receivables |
6.55 |
3.94 |
4.21 |
2.03 |
1.90 |
|
Deferred
Tax Assets |
0.51 |
0.20 |
0.78 |
1.89 |
1.97 |
|
Non-Current Assets |
30.02 |
25.14 |
26.19 |
30.29 |
29.11 |
|
Inventories |
27.03 |
31.57 |
35.66 |
34.79 |
38.24 |
|
Loans
due from Related Parties |
4.78 |
3.58 |
3.57 |
1.09 |
|
|
Income
Tax Receivables |
0.01 |
0.46 |
0.71 |
0.98 |
|
|
Trade
and Other Receivables |
34.29 |
35.71 |
37.79 |
30.28 |
30.70 |
|
Amounts
due from Related Parties |
0.26 |
0.54 |
0.01 |
0.08 |
0.09 |
|
Other
Investments |
0.92 |
1.46 |
0.00 |
||
|
Cash
and Cash Equivalents |
3.61 |
2.99 |
3.93 |
0.96 |
1.86 |
|
Current Assets |
69.98 |
74.86 |
82.85 |
69.71 |
70.89 |
|
Total Assets |
100.00 |
100.00 |
100.00 |
100.00 |
100.00 |
|
Equity |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
|
Stated
Capital |
2.17 |
1.84 |
1.84 |
1.53 |
1.48 |
|
Capital
Reserves |
3.70 |
2.49 |
3.40 |
2.78 |
2.77 |
|
Revenue
Reserves |
14.71 |
9.77 |
8.38 |
5.42 |
7.76 |
|
Total
Equity |
20.58 |
14.11 |
13.62 |
9.73 |
12.03 |
|
Interest-Bearing
Loans and Borrowings |
20.81 |
7.44 |
21.67 |
15.00 |
7.10 |
|
Lease
Liability - Non-current |
0.00 |
0.00 |
0.00 |
9.40 |
8.97 |
|
Defined
Benefit Obligation |
1.65 |
1.69 |
1.85 |
1.55 |
1.55 |
|
Security
Deposits |
3.53 |
3.52 |
3.91 |
3.24 |
3.06 |
|
Other
Financial Liabilities |
0.00 |
0.00 |
0.00 |
0.00 |
|
|
Deferred
Revenue |
0.00 |
0.00 |
0.25 |
0.22 |
0.25 |
|
Other
Non-Current Liabilities |
0.00 |
0.00 |
0.42 |
0.20 |
0.34 |
|
Non-Current Liabilities |
26.00 |
12.65 |
28.11 |
29.62 |
21.28 |
|
Trade
and Other Payables |
15.92 |
17.86 |
15.03 |
16.18 |
32.11 |
|
Deferred
Revenue |
1.52 |
0.72 |
0.54 |
0.41 |
0.43 |
|
Income
Tax Payable |
0.00 |
0.00 |
0.06 |
||
|
Dividends
Payable |
0.07 |
1.59 |
0.14 |
0.10 |
0.14 |
|
Amounts
due to Related Parties - Trade |
3.04 |
7.76 |
8.12 |
8.33 |
10.09 |
|
Other
Financial Liabilities |
0.02 |
0.00 |
0.00 |
||
|
Lease
Liability - Current |
0.00 |
0.00 |
0.00 |
1.25 |
1.48 |
|
Interest-Bearing
Loans and Borrowings |
30.01 |
41.66 |
39.31 |
30.73 |
19.26 |
|
Bank
Overdrafts |
2.44 |
3.64 |
4.16 |
3.66 |
3.13 |
|
Current Liabilities |
53.42 |
73.24 |
67.30 |
60.65 |
66.69 |
|
Total Liabilities |
79.42 |
85.89 |
95.42 |
90.27 |
87.97 |
|
Total Equity and Liabilities |
100.00 |
100.00 |
100 |
100.00 |
100.00 |
RATIO ANALYSIS
1.
Liquidity and Efficiency ratios
A
liquidity ratio is a financial ratio that is used to assess a company's ability
to meet its short-term debt obligations. The liquidity ratios for Singer Sri Lanka
PLC from 2016 to 2020 are given below.
|
|
2016 |
2017 |
2018 |
2019 |
2020 |
|
Liquidity and Efficiency |
|
||||
|
Current Ratio |
1.31 |
1.02 |
1.23 |
1.15 |
1.06 |
|
Acid Ratio |
0.80 |
0.59 |
0.70 |
0.58 |
0.49 |
|
Accounts Receivable Turnover |
1.08 |
1.16 |
0.87 |
0.87 |
1.08 |
|
Total Asset Turnover |
1.78 |
2.37 |
2.31 |
2.56 |
3.02 |
|
Days ' sales in inventory |
102.14 |
106.75 |
141.42 |
167.36 |
147.76 |
|
Days ' sales uncollected |
84.64 |
79.00 |
104.65 |
104.57 |
84.46 |
· Current Ratio: Over the
period 2016-2020, the above ratio represents the company's ability to repay its
liabilities with its assets. The current ratio is a measure of a company's
financial health. It takes into account current assets and liabilities. It's a
positive situation when current assets exceed current liabilities. According to
the current ratio, it reveals that the financial health of the Singer Sri Lanka
PLC is in a favorable over time. But the ideal condition (2:1) was not achieved
in any of the five years and also compare to 2016 the remaining four years were
not in the favorable condition.
· Acid Ratio: The
acid-test ratio is a good indicator of whether a company's short-term assets
are sufficient to cover its immediate liabilities. According to the
calculations above, the short-term liabilities for the five years are less than
1 rupee of liability.
· Accounts Receivable Turnover:
This ratio assesses a company's ability to convert receivables into cash on a
yearly basis. In addition, assess how effectively a company utilizes its
assets. In comparison to the previous years, 2017 had the highest accounts
receivable turnover and 2018 and 2019 had the lowest.
· Total Asset Turnover:
Total asset turnover is a metric that compares a company's sales or revenues to
the value of its assets. The year 2020 has the highest total asset turnover
rate, according to the calculations above. It means that for every 1 rupee spent,
3.02 rupees are spent. When compared to previous years, 2016 had the lowest
asset turnover.
· Days ' sales in
inventory (DSI): The number of days sales in inventory indicates how long it
will take a company to convert its inventory into sales. According to the
calculations above, Singer Lanka PLC shows fluctuations, with the best DSI in
2016 and the worst DSI in 2019.
· Days ' sales uncollected:
This ratio represents the estimated time it will take to collect the
receivable. Unusually high figures indicate a company-wide collection process
that isn't up to par. According to the above calculations, 2019 has an
unusually high figure for receivables collection, indicating an unfavorable
situation.
2.
Solvency Ratios
|
Solvency |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Debt ratio |
0.79 |
0.86 |
0.88 |
0.90 |
0.88 |
|
Equity Ratio |
0.21 |
0.14 |
0.12 |
0.10 |
0.12 |
· Debt ratio: Creditors
contribute a portion of a company's assets, as measured by the Debt ratio. The
year 2019 has the highest debt ratio, according to the calculations above.
However, Singer Sri Lanka PLC has had a high debt ratio over the years.
· Equity Ratio: The equity
ratio determines how much of a company's assets are contributed by its
shareholders. The year 2017 has the highest equity ratio, according to the
calculations above. From 2017 to 2020, we can see a general decline with some
fluctuations, indicating that investors are hesitant to invest in the company.
3.
Profitability Ratios
|
Profitability |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Net Profit Margin % |
2.81 |
1.96 |
0.32 |
0.03 |
3.19 |
|
Gross Margin % |
29.08 |
27.86 |
28.19 |
29.46 |
27.28 |
|
Return on Assets % |
4.23 |
3.18 |
0.40 |
0.03 |
4.20 |
|
Earnings per share |
6.87 |
8.82 |
2.66 |
0.37 |
0.03 |
|
Return on Equity % |
20.03 |
18.62 |
2.98 |
0.30 |
38.56 |
· Gross Margin: This ratio
measures how profitable a company's inventory or merchandise is when sold. The
highest gross margin is in the year 2019, and the lowest gross margin is in the
year 2020.
· Net Profit Margin: This
ratio assesses a company's ability to generate a profit from sales. The year
2020 has the highest profit margin, according to the calculations above. The
net profit margin has decreased from 2017 to 2019, which is unfavorable
condition.
· Return on Assets: The
above ratio represents the company's overall profitability. The highest return
on total assets ratio in 2016 belongs to Singer Sri Lanka PLC. In 2019, the
return on total assets ratio was the lowest. The return on total assets ratio
has decreased from 2017 to 2019. The above figures indicate that the company's
overall profitability has been fluctuating over time.
· Return on Equity: The
ratio indicates how effectively the company used the owners' money to generate
revenue. In 2020, the return on common shareholders' equity increased,
indicating that the company's management has been successful in maximizing the
owners' investment. From 2017 to 2019, the return on common shareholders'
equity has decreased, implying that the company's management has been
unfavorable to the owners' investment.
· Earnings per share: The
above figure shows how much income was earned for each outstanding share of
common stock. The highest basic earnings per share were in 2017, while the
lowest basic earnings per share were in 2020.
4.
Market Ratios
|
Market Ratios |
2016 |
2017 |
2018 |
2019 |
2020 |
|
Price Earnings Ratio |
14.31 |
15.11 |
67.57 |
580.00 |
13.03 |
|
Dividend Yield |
6.97 |
5.47 |
2.60 |
1.44 |
3.12 |
· Price Earnings Ratio:
The year 2019 has the highest price-to-earnings ratio, according to the
calculations above. The PE ratio has risen from 2017 to 2019, indicating that
the company has more room to grow than in previous years.
· Dividend Yield:
According to the calculations above, the year 2016 has the highest dividend
yield and appears to be in good shape.
ALTMAN Z-SCORE ANALYIS
The Altman Z-score is the result of a credit-strength
test that determines the likelihood of a publicly traded manufacturing company
going bankrupt. The Altman Z-score is calculated using data from a company's
annual report and is based on five financial ratios. Profitability, leverage,
liquidity, solvency, and activity are used to determine whether a company is
likely to go bankrupt.
Z-Score = 1.2A + 1.4B +
3.3C + 0.6D + 1.0E
Where:
|
A = Working Capital/Total Assets |
|
B = Retained Earnings/Total Assets |
|
C = Earnings Before Interest & Tax/Total
Assets |
|
D = Market Value of Equity/Total Liabilities |
|
E = Sales/Total Assets |
Zone of Discrimination
· Z > 2.9 – “Safe”
Zone
· 1.23 < Z 2.9 –
“Grey” Zone
· Z < 1.23 –
“Distress” Zone
|
Z Score Analyis of Singer Sri Lank PLC |
|||||
|
|
2016 |
2017 |
2018 |
2019 |
2020 |
|
Working Capital |
4,773,020,124 |
549,354,461 |
5,288,761,365 |
3,715,755,159 |
1,773,635,123 |
|
Total Assets |
28,830,362,140 |
34,027,321,606 |
37,103,488,798 |
41,025,535,609 |
42,230,848,747 |
|
T1 |
0.16555533 |
0.016144511 |
0.14254081 |
0.090571765 |
0.041998567 |
|
Retained Earning |
4,242,212,861 |
3,326,088,413 |
2,851,601,145 |
2,223,047,375 |
3,277,634,799 |
|
Total Assets |
28,830,362,140 |
34,027,321,606 |
37,103,488,798 |
41,025,535,609 |
42,230,848,747 |
|
T2 |
0.147143933 |
0.097747582 |
0.076855337 |
0.054186919 |
0.077612335 |
|
Earning Before Tax |
1,450,529,968 |
1,105,878,833 |
88,713,288 |
155,686,332 |
2,629,049,404 |
|
Total Assets |
28,830,362,140 |
34,027,321,606 |
37,103,488,798 |
41,025,535,609 |
42,230,848,747 |
|
T3 |
0.050312582 |
0.032499732 |
0.002390969 |
0.003794864 |
0.06225424 |
|
Market Value of Equity |
5,933,803,055 |
4,799,691,875 |
4,635,982,236 |
3,991,504,682 |
5,080,616,380 |
|
Total Liabilities |
22,896,559,085 |
29,227,629,731 |
32,467,506,562 |
37,034,030,927 |
37,150,232,367 |
|
T4 |
0.259156978 |
0.164217623 |
0.142788367 |
0.107779374 |
0.13675867 |
|
Sales |
39,267,202,832 |
50,910,032,892 |
43,617,889,429 |
44,125,910,546 |
54,863,685,740 |
|
Total Assets |
28,830,362,140 |
34,027,321,606 |
37,103,488,798 |
41,025,535,609 |
42,230,848,747 |
|
T5 |
1.362008657 |
1.496151636 |
1.175573803 |
1.075571833 |
1.299137653 |
|
Z Score |
2.088202268 |
1.858151353 |
1.547783465 |
1.337310314 |
1.745687398 |
According to the Z
Scores derived from Singer Sri Lanka PLC Financials, in the years from 2016 to
2020 the company is in the Grey zone. The whole world economy collapsed due to
ongoing COVID19 pandemic and also the Easter Sunday attack in 2019 have a major
impact in the marginal growth of whole industries mainly declining the demand
of most luxury goods. These unfavorable situations in the years of 2019 and
2020 have led Singer Lanka PLC into grey zone.
CONCLUSION
Revenue has increased in the last 5 years, according
to Singer Sri Lanka PLC’s annual reports. When comparing current ratios from 2016
to 2020, Singer Sri Lanka PLC has a favorable financial position. Singer Sri
Lanka PLC has a poor collection process, a bad credit policy, or no credit
policy at all, according to accounts receivable turnover. Finally, Sri Lanka PLC maintains a stable position
within the industry, but they must reconsider their current credit policy in
order to improve their poor collection process.
References
https://finacialsrilanka.blogspot.com/2018/
https://www.cse.lk/pages/company-profile/company-profile.component.html?symbol=SINS.N0000
https://en.wikipedia.org/wiki/Singer_(Sri_Lanka)
