Analyzing Financial Statements of Convenience Foods (Lanka) PLC

 

Introduction

Financial Statement Analysis is the process of reviewing and analyzing a company’s financial statements gaining an understanding of an organization’s financial situation. It helps to make investments and decisions. To analyze the financial statements is used Convenience Foods Lanka PLC.

Convenience Foods (Lanka) PLC is subsidiary of CBL Investments Limited. This commenced operations in 1991, named as Soy Foods Forbes and Walker Limited. This company pioneered the concept of textured vegetable protein (TVP) or popularly known as soya meat market locally.

In 2000, CBL (Ceylon biscuit Limited who has been a pioneer in the local business area. This was acquired a majority share of 79%. Then the company was renamed under the name Soya Foods Lanka Limited. With growth strategies the company changed its name to Convenience Foods (Lanka) PLC. Then this diversified beyond soya-based foods into the convenience foods segments like Sera kottu, Sera salt, Sera coconut oils, Sera Coconut milk…etc.

This is located at No 555, High Level Road, Makumbura, Pannipitiya. The factory has received ISO 9001, 14001, and 22000. The core values of group are caring, quality, innovation, integrity.

Vision of this organization is that “Total and complete nutrition to enhance the quality of life of future generations.”

Mission of this organization” To achieve total consumer satisfaction by maintaining consistently superior quality products that are innovative and nutritious while penetrating new markets to maintain market leadership in a competitive environment.

 

  

 

 

 

Statement of Profit or Loss and Other Comprehensive Income

Convenience Foods (Lanka) Plc

Year	2022	2021	2020	2019	2018
Revenue	4,858,647,421	3,207,282,244	2,430,828,555	1,996,718,507	1,915,822,410
Cost of Sales	3,696,355,746	2,074,451,264	1,625,788,081	1,414,987,798	1,220,138,719
Gross Profit	1,162,291,675	1,132,830,980	805,040,475	581,730,709	695,683,691
Other Operating Income	23,201,620	28,797,222	85,979,542	70,363,283	57,386,996
Distribution Expenses	541,365,129	417,513,192	415,166,967	343,419,875	393,091,335
Administrative Expenses	184,171,999	168,127,811	157,995,078	138,237,300	102,324,916
Results from Operating Activities	459,956,167	575,987,199	0	0	0
Finance Income	40,957,256	62,158,719	0	0	0
Finance Expenses	11,679,300	5,183,148	1,850,860	376,329	102,324,916
Net Finance Income	29,277,956	56,975,571	0	0	0
Profit Before Tax	489,234,123	632,962,770	316,007,112	170,060,488	257,327,098
Income Tax Expenses	103,644,723	117,042,986	86,567,859	51,456,080	86,944,533
Profit for the Year	385,589,400	515,919,784	229,439,253	118,604,408	170,382,565
Other Comprehensive Income
Items that will not be reclassified to Profit or Loss
Actuarial Gain/(Loss) on Retirement Benefit Obligation	5,096,184	11,555,476	4,400,129	8,666,694	6,099,190
Deferred Tax on Actuarial (Gain)/Loss	917,313	2,079,986	1,232,036	2,426,674	1,707,773
Other Comprehensive Income for the Year	4,178,871	9,475,490	3,168,093	6,240,020	4,391,417
Total Comprehensive Income for the Year	389,768,271	506,444,294	226,271,160	124,844,428	165,991,149
Profit for the Year attributable to:
Owners of the Company	385,589,400	515,919,784	229,439,253	118,604,408	170,382,565
Non-Controlling Interest	0	0	0	0	0
Total Profit for the Year	385,589,400	515,919,784	229,439,253	118,604,408	170,382,565
Total comprehensive income for the year attributable to:
Owners of the Company	389,768,271	506,444,294	226,271,160	124,844,428	165,991,149
Non-Controlling Interest	0	0	0	0	0
Total Comprehensive Income for the Year	389,768,271	506,444,294	226,271,160	124,844,428	165,991,149
Basic and Diluted Earnings Per Share	140	187.61	83.43	43.13	61.96
Dividend per share	10	5.5	4.5	5	4

 

Statement of Financial Position. (From 2018 – 2022)

    Convenience Foods (Lanka) Plc

Year	2022	2021	2020	2019	2018	2017
Assets
Non-Current Assets
Property, Plant and Equipment	616,391,944	494,613,301	254,853,934	218,824,003	253,135,171	270,843,939
Leasehold land	0	0	0	5,016,573	5,086,170	5,155,766
Right of Use Assets	116,325,327	40,279,015	13,737,955	0	0	0
Intangible Assets	7,827,705	6,435,508	7,310,717	8,458,159	9,070,692	8,915,549
Investment in Subsidiary	20	20	20	20	20	20
Total Non-Current Assets	740,544,996	541,327,844	275,902,627	232,298,755	267,292,053	284,915,274
Current assets
Inventories	1,136,374,206	242,033,806	212,320,415	174,386,935	160,131,838	110,320,359
Trade and other receivables	636,390,109	751,933,096	558,096,376	354,931,431	308,646,965	240,266,290
Amounts due from related parties	26,337,704	9,331,044	10,609,314	4,545,058	4,527,627	1,845,035
Short Term Investments	418,645,514	940,475,759	605,768,523	590,958,151	476,498,112	312,682,790
Cash and Cash Equivalents	173,094,623	40,319,425	142,907,968	7,692,952	31,420,727	17,896,018
Total current assets	2,390,842,156	1,984,093,130	1,529,702,595	1,132,514,527	981,225,269	683,010,492
Total assets	3,131,387,152	2,525,420,974	1,805,605,221	1,364,813,282	1,248,517,322	967,925,766
Equity and liabilities
Equity attributable to equity - holders of the parent
Stated Capital	52,521,178	52,521,178	52,521,178	52,521,178	52,521,178	52,521,178
Other Reserves	41,613,945	41,613,945	41,613,945	41,613,945	41,613,945	41,613,945
Retained Earnings	1,982,289,617	1,620,021,346	1,128,702,052	914,805,892	803,747,953	648,756,804
Total Equity	2,076,424,740	1,714,156,469	1,222,837,175	1,008,941,014	897,883,076	742,891,927
Liabilities
Non-Current Liabilities
Deferred Tax Liability	17,168,762	5,743,322	8,418,570	17,685,512	18,646,416	20,385,817
Lease Liabilities	112,526,574	31,911,903	5,653,707	0	0	0
Retirement Benefit Obligation	70,888,677	89,531,649	65,002,062	53,441,031	54,188,772	41,269,953
Total Non-Current Liabilities	200,584,013	127,186,874	79,074,339	71,126,543	72,835,188	61,655,770
Current Liabilities
Trade and Other Payables	783,769,818	611,929,235	337,848,054	230,827,588	225,382,382	143,574,051
Lease Liabilities	7,987,138	6,189,056	3,644,564	0	0	0
Current Tax Liabilities	32,074,465	38,328,088	44,564,374	4,623,415	48,053,685	15,898,090
Amount due to Related Companies	30,546,978	27,631,252	47,971,650	29,042,336	4,362,992	3,905,928
Bank overdrafts	0	0	69,665,065	20,252,386	0	0
Total Current Liabilities	854,378,399	684,077,631	503,693,707	284,745,725	277,799,059	163,378,069
Total Liabilities	1,054,962,412	811,264,505	582,768,045	355,872,268	350,634,246	225,033,839
Total Equity and Liabilities	3,131,387,152	2,525,420,974	1,805,605,221	1,364,813,282	1,248,517,322	967,925,766
Net assets value per share	755.06	623.33	444.67	366.89	326.5	270.14

 

 

 

 

 

 

Analysis Overview

For the analysis is used financial statements of 5 years. Below tools are used for the analysis.

Horizontal Analysis

·         Doller change

·         Percent change

Vertical Analysis

Trend Analysis

Ratio Analysis

Liquidity and efficiency

·         Working Capital

·         Current Ratio

·         Acid Test Ratio

·         Accounts Receivable Turnover

·         Merchandise Turnover

·         Days’ Sales Uncollected

·         Days’ Sales in inventory

·         Total Assets Turnover

Solvency

·         Debt Ratio

·         Equity Ratio

·         Times Interest Earned

Profitability

·         Profit Margin

·         Gross Margin

·         Return on Total Assets

·         Return on Common Shareholders ‘Equity

·         Book value per Common share

·         Basic Earnings per share

Market

·         Price-Earnings Ratio

·         Dividend Yield

 

Horizontal Analysis

Dollar Change = Analysis period amount - Base Period Amount    

Year	2022	2021	2020	2019	2018
Assets
Non-Current Assets
Property, Plant and Equipment	121,778,643	239,759,367	36,029,931	-34,311,168	-17,708,768
Leasehold land	0	0	-5,016,573	-69,597	-69,596
Right of Use Assets	76,046,312	26,541,060	13,737,955	0	0
Intangible Assets	1,392,197	-875,209	-1,147,442	-612,533	155,143
Investment in Subsidiary	0	0	0	0	0
Total Non-Current Assets	199,217,152	265,425,217	43,603,872	-34,993,298	-17,623,221
Current assets
Inventories	894,340,400	29,713,391	37,933,480	14,255,097	49,811,479
Trade and other receivables	-115,542,987	193,836,720	203,164,945	46,284,466	68,380,675
Amounts due from related parties	17,006,660	-1,278,270	6,064,256	17,431	2,682,592
Short Term Investments	-521,830,245	334,707,236	14,810,372	114,460,039	163,815,322
Cash and Cash Equivalents	132,775,198	-102,588,543	135,215,016	-23,727,775	13,524,709
Total current assets	406,749,026	454,390,535	397,188,068	151,289,258	298,214,777
Total assets	605,966,178	719,815,753	440,791,939	116,295,960	280,591,556
Equity and liabilities
Equity attributable to equity - holders of the parent
Stated Capital	0	0	0	0	0
Other Reserves	0	0	0	0	0
Retained Earnings	362,268,271	491,319,294	213,896,160	111,057,939	154,991,149
Total Equity	362,268,271	491,319,294	213,896,161	111,057,938	154,991,149
Liabilities
Non-Current Liabilities
Deferred Tax Liability	11,425,440	-2,675,248	-9,266,942	-960,904	-1,739,401
Lease Liabilities	80,614,671	26,258,196	5,653,707	0	0
Retirement Benefit Obligation	-18,642,972	24,529,587	11,561,031	-747,741	12,918,819
Total Non-Current Liabilities	73,397,139	48,112,535	7,947,796	-1,708,645	11,179,418
Current Liabilities
Trade and Other Payables	171,840,583	274,081,181	107,020,466	5,445,206	81,808,331
Lease Liabilities	1,798,082	2,544,492	3,644,564	0	0
Current Tax Liabilities	-6,253,623	-6,236,286	39,940,959	-43,430,270	32,155,595
Amount due to Related Companies	2,915,726	-20,340,398	18,929,314	24,679,344	457,064
Bank overdrafts	0	-69,665,065	49,412,679	20,252,386	0
Total Current Liabilities	170,300,768	180,383,924	218,947,982	6,946,666	114,420,990
Total Liabilities	243,697,907	228,496,460	226,895,777	5,238,022	125,600,407
Total Equity and Liabilities	605,966,178	719,815,753	440,791,939	116,295,960	280,591,556
Net assets value per share	132	179	78	40	56

 

Percent Change = (Doller Change / Base Period Amount) * 100%

Year	2022	2021	2020	2019	2018
Assets
Non-Current Assets
Property, Plant and Equipment	24.62098022	94.07716932	16.46525541	-13.55448469	-6.538365992
Leasehold land	0	0	-100	-1.368357723	-1.349867314
Right of Use Assets	188.7988373	193.1951298	0	0	0
Intangible Assets	21.63305523	-11.97158911	-13.56609636	-6.752880596	1.740139615
Investment in Subsidiary	0	0	0	0	0
Total Non-Current Assets	36.80157121	96.20249719	18.77060082	-13.09178391	-6.185425145
Current assets
Inventories	369.5105303	13.99459915	21.75247819	8.902100406	45.15166507
Trade and other receivables	-15.366126	34.73176468	57.24061812	14.99592455	28.46036995
Amounts due from related parties	182.2589198	-12.04856412	133.425272	0.384991962	145.3951822
Short Term Investments	-55.48577303	55.25332256	2.506162573	24.02108972	52.39025851
Cash and Cash Equivalents	329.3082627	-71.78644021	1757.647987	-75.51631444	75.57384553
Total current assets	20.5005007	29.70450181	35.07134421	15.41840215	43.66181493
Total assets	23.99466007	39.86562204	32.29686762	9.314725391	28.9889541
Equity and liabilities
Equity attributable to equity - holders of the parent
Stated Capital	0	0	0	0	0
Other Reserves	0	0	0	0	0
Retained Earnings	22.3619443	43.52958277	23.38158968	13.81750816	23.89048532
Total Equity	21.13390916	40.17863572	21.20006601	12.36886416	20.86321622
Liabilities
Non-Current Liabilities
Deferred Tax Liability	198.934345	-31.77793853	-52.39849432	-5.153290584	-8.532407605
Lease Liabilities	252.6163075	464.4421085	#DIV/0!	#DIV/0!	#DIV/0!
Retirement Benefit Obligation	-20.82277296	37.73662903	21.63324843	-1.379881795	31.30320744
Total Non-Current Liabilities	57.70810831	60.84468819	11.17416321	-2.345905938	18.13198992
Current Liabilities
Trade and Other Payables	28.0817737	81.12557635	46.36381072	2.415985647	56.97988629
Lease Liabilities	29.05260511	69.81608774	-	-	-
Current Tax Liabilities	-16.31603173	-13.9938822	863.8843582	-90.3786463	202.2607433
Amount due to Related Companies	10.5522761	-42.40087218	65.17834516	565.6518279	11.701803
Bank overdrafts	0	-100	243.9844816	-	0
Total Current Liabilities	24.89494763	35.81222507	76.89245624	2.500608182	70.03448547
Total Liabilities	30.03926654	39.20881764	63.75764492	1.493870624	55.81400893
Total Equity and Liabilities	23.99466007	39.86562204	32.29686762	9.314725391	28.9889541
Net assets value per share	21.13326809	40.17810961	21.19981466	12.37059724	20.86325609

 

Vertical Analysis

Common Size Percent = (Analysis Amount / Base Amount) * 100%

Year	2022	2021	2020	2019	2018
Assets
Non-Current Assets
Property, Plant and Equipment	19.68430967	19.58538026	14.11459886	16.03325568	20.27486255
Leasehold land	0	0	0	0.367564785	0.407376807
Right of Use Assets	3.71481779	1.594942602	0.760850425	0	0
Intangible Assets	0.249975638	0.254829118	0.404890112	0.619730121	0.726517113
Investment in Subsidiary	6.38695E-07	7.91947E-07	1.10766E-06	1.4654E-06	1.6019E-06
Total Non-Current Assets	23.64910374	21.43515278	15.28034056	17.02055205	21.40875808
Current assets
Inventories	36.28980228	9.583899417	11.75896107	12.77734744	12.82576022
Trade and other receivables	20.32294565	29.77456447	30.90910292	26.00585997	24.72107992
Amounts due from related parties	0.841087439	0.369484696	0.587576613	0.333016835	0.362640303
Short Term Investments	13.36933102	37.24035591	33.54933382	43.29956037	38.16511822
Cash and Cash Equivalents	5.527729872	1.596542731	7.914685134	0.56366333	2.516643257
Total current assets	76.35089626	78.56484722	84.71965949	82.97944795	78.59124192
Total assets	100	100	100	100	100
Equity and liabilities
Equity attributable to equity - holders of the parent
Stated Capital	1.677249585	2.079699921	2.908785231	3.848231747	4.206683966
Other Reserves	1.328930055	1.647802304	2.304708943	3.049057739	3.333069095
Retained Earnings	63.30388166	64.14856623	62.51100954	67.0279154	64.37619558
Total Equity	66.3100613	67.87606845	67.72450372	73.92520481	71.91594864
Liabilities
Non-Current Liabilities
Deferred Tax Liability	0.548279761	0.227420381	0.466246436	1.29581916	1.493484766
Lease Liabilities	3.593505643	1.263627068	0.313119775	0	0
Retirement Benefit Obligation	2.263810687	3.545216814	3.600015177	3.915629464	4.340249914
Total Non-Current Liabilities	6.405596091	5.036264263	4.379381389	5.211448624	5.83373468
Current Liabilities
Trade and Other Payables	25.02947671	24.23078137	18.71106984	16.9127595	18.05200281
Lease Liabilities	0.255067087	0.24507027	0.201847223	0	0
Current Tax Liabilities	1.024289347	1.517691046	2.468112823	0.33875806	3.848860096
Amount due to Related Companies	0.975509463	1.094124595	2.656818303	2.127934743	0.349453862
Bank overdrafts	0	0	3.858266701	1.483894264	0
Total Current Liabilities	27.28434261	27.08766729	27.89611489	20.86334657	22.25031676
Total Liabilities	33.6899387	32.12393155	32.27549623	26.07479519	28.08405136
Total Equity and Liabilities	100	100	100	100	100
Net assets value per share	2.41126E-05	2.46822E-05	2.46272E-05	2.68821E-05	2.6151E-05

 

	2022	2021	2020	2019	2018
Revenue	100	100	100	100	100
Cost of Sales	76.07787571	64.67941098	66.88205458	70.86566249	63.68746459
Gross Profit	23.92212429	35.32058902	33.11794546	29.13433751	36.31253541
Other Operating Income	0.47753249	0.897869904	3.537046733	3.523946052	2.995423569
Distribution Expenses	11.14230118	13.01766294	17.07923688	17.1992133	20.518151
Administrative Expenses	3.790602261	5.242064721	6.499638885	6.923224256	5.341043902
Results from Operating Activities	9.46675334	17.95873126	0	0	0
Finance Income	0.8429765	1.938049547	0	0	0
Finance Expenses	0.240381715	0.161605609	0.076141116	0.018847374	5.341043902
Net Finance Income	0.602594785	1.776443938	0	0	0
Profit Before Tax	10.06934813	19.7351752	12.99997531	8.516998636	13.43167804
Income Tax Expenses	2.133201157	3.649288622	3.561249057	2.577032257	4.538235514
Profit for the Year	7.936146968	16.08588658	9.438726254	5.939966379	8.893442529
Other Comprehensive Income
Items that will not be reclassified to Profit or Loss
Actuarial Gain/(Loss) on Retirement Benefit Obligation	0.104888945	0.360288716	0.181013547	0.434046861	0.31835884
Deferred Tax on Actuarial (Gain)/Loss	0.018880008	0.064851979	0.050683788	0.121533105	0.089140465
Other Comprehensive Income for the Year	0.086008937	0.295436737	0.130329759	0.312513756	0.229218375
Total Comprehensive Income for the Year	8.022155905	15.79044984	9.308396494	6.252480135	8.664224206
Profit for the Year attributable to:
Owners of the Company	7.936146968	16.08588658	9.438726254	5.939966379	8.893442529
Non-Controlling Interest	0	0	0	0	0
Total Profit for the Year	7.936146968	16.08588658	9.438726254	5.939966379	8.893442529
Total comprehensive income for the year attributable to:
Owners of the Company	8.022155905	15.79044984	9.308396494	6.252480135	8.664224206
Non-Controlling Interest	0	0	0	0	0
Total Comprehensive Income for the Year	8.022155905	15.79044984	9.308396494	6.252480135	8.664224206
Basic and Diluted Earnings Per Share	2.88578E-06	5.8495E-06	3.43216E-06	2.16004E-06	3.23412E-06
Dividend per share	2.05819E-07	1.71485E-07	1.85122E-07	2.50411E-07	2.08788E-07

 

Trend Analysis

Item	2022	2021	2020	2019	2018
Revenue	253.606357%	167.410206%	126.8817267%	104.2225259%	100%
Cost of Sales	302.945533%	170.0176571%	133.2461675%	115.9694202%	100%
Gross Profit	167.071859%	162.8370759%	115.7193255%	83.62000095%	100%

 

 

 

Liquidity and Efficiency

Working Capital

	31st March 2022	31st March 2021	31st March 2020	31st March 2019	31st March 2018
Current Assets	2,390,842,156	1,984,093,130	1,529,702,595	1,132,514,527	981,225,269
Current Liabilities	854,378,399	684,077,631	503,693,707	284,745,725	277,799,059
Working Capital	1,536,463,757	1,300,015,499	1,026,008,888	847,768,802	703,426,210

 

Current Ratio

Current Ratio = (Current Assets/ Current Liability)

	Current Assets	Current Liabilities	Current Ratio
2022	2,390,842,156	854,378,399	2.798341062
2021	1,984,093,130	684,077,631	2.900391769
2020	1,529,702,595	503,693,707	3.036969837
2019	1,132,514,527	284,745,725	3.977283687
2018	981,225,269	277,799,059	3.532140363

 

Acid Test Ratio

Acid Test Ratio = (Quick Assets/ Current Liabilities)

	Current Assets	Inventory	Quick Assets	Current Liabilities	Acid Test Ratio
2022	2,390,842,156	1,136,374,206	1,254,467,950	854,378,399	1.468281445
2021	1,984,093,130	242,033,806	1,742,059,324	684,077,631	2.546581331
2020	1,529,702,595	212,320,415	1,317,382,180	503,693,707	2.615443
2019	1,132,514,527	174,386,935	958,127,592	284,745,725	3.364853298
2018	981,225,269	160,131,838	821,093,431	277,799,059	2.955709908

 

Accounts Receivable Turnover

Account Receivable Turnover = (Sales on Account/Average Account Receivable)

	Account Receivable	Account Receivable Turnover
2022	636,390,109	694161602.5
2021	751,933,096	655014736
2020	558,096,376	456513903.5
2019	354,931,431	331789198
2018	308,646,965	274456627.5
2017	240,266,290

	Sales on Account	Average Account Receivable	Account Receivable Turnover
2022	4,858,647,421	694161602.5	6.999303049
2021	3,207,282,244	655014736	4.896503953
2020	2,430,828,555	456513903.5	5.324763466
2019	1,996,718,507	331789198	6.018033495
2018	1,915,822,410	274456627.5	6.980419556

Merchandise Turnover

Merchandise Turnover = (Cost of goods sold/ Average Inventory)

	Inventory (Rs)	Average Inventory (Rs)
2022	1,136,374,206	689204006
2021	242,033,806	227177110.5
2020	212,320,415	193353675
2019	174,386,935	167259386.5
2018	160,131,838	80065919

 

	Cost of goods sold (Rs)	Average Inventory (Rs)	Merchandise Turnover
2022	3,696,355,746	689204006	5.363224406 times
2021	2,074,451,264	227177110.5	10.7287915 times
2020	1,625,788,081	193353675	8.408364004 times
2019	1,414,987,798	167259386.5	8.459840895 times
2018	1,220,138,719	80065919	15.2391771 times

 

Days' Sales Uncollected

Days' Sales Uncollected= (Accounts Receivable / Net Sales) * 365

	Account Receivable (Rs)	Net Sales (Rs)	Days' Sales Uncollected (Rs)
2022	636390109	4858647421	47.80803579 days
2021	751933096	3207282244	85.57263102 days
2020	558096376	2430828555	83.80071759 days
2019	354931431	1996718507	64.88144015 days
2018	308646965	1915822410	58.80301934 days

 

Days' Sales in Inventory

Days' Sales in Inventory = (Ending Inventory/Cost of Sales) * 365

	Ending Inventory (Rs)	Cost of Sales (Rs)	Days' Sales in Inventory
2022	1136374206	3696355746	112.2123014 days
2021	242033806	2074451264	42.58588318 days
2020	212320415	1625788081	47.66731432 days
2019	174386935	1414987798	44.98359022 days
2018	160131838	1220138719	47.90284904 days

 

Total Assets Turnover

	Total Assets (Rs)	Average Total Assets (Rs)
2022	3,131,387,152	2828404063
2021	2,525,420,974	2165513098
2020	1,805,605,221	1585209252
2019	1,364,813,282	1306665302
2018	1,248,517,322	624258661

 

	Revenue (Rs)	Average Total Assets (Rs)	Total Assets Turnover (Rs)
2022	4858647421	2828404063	1.717805276 times
2021	3207282244	2165513098	1.48107266 times
2020	2430828555	1585209252	1.533443331 times
2019	1996718507	1306665302	1.528102494 times
2018	1915822410	624258661	3.068956075 times

 

Solvency

Debt Ratio

Debt Ratio = (Total Liability/Total Assets)

	Total Liabilities (Rs)	Total Assets (Rs)	Debt Ratio
2022	1,054,962,412	3131387152	33.6899387 %
2021	811,264,505	2525420974	32.12393155 %
2020	582,768,045	1805605221	32.27549623 %
2019	355,872,268	1364813282	26.07479519 %
2018	350,634,246	1248517322	28.08405136 %

 

Equity Ratio

Equity Ratio = (Total Shareholders' equity/Total Assets)

	Total shareholders' equity (Rs)	Total Assets (Rs)	Equity Ratio (%)
2022	2,076,424,740	3131387152	66.3100613
2021	1,714,156,469	2525420974	67.87606845
2020	1,222,837,175	1805605221	67.72450372
2019	1,008,941,014	1364813282	73.92520481
2018	897,883,076	1248517322	71.91594864

 

Time Interest Earned

Time Interest Earned = (Net income before interest expense and income taxes/Interest Expense)

	Profit before tax (Rs)	Interest Expense (Rs)	Times Interest Earned (tims)
2022	489,234,123	11,679,300	42.8889936
2021	632,962,770	5,183,148	123.1193703
2020	316,007,112	1,850,860	171.7352863
2019	170,060,488	376,329	452.8931254
2018	257,327,098	327,338	787.1204565

 

 

 

 

Profitability

Profit Margin

Profit Margin = (Net Income/Net Sales)

	Net Income (Rs)	Net Sales (Rs)	Profit Margin (%)
2022	385,589,400	4,858,647,421	7.936146968
2021	515,919,784	3,207,282,244	16.08588658
2020	229,439,253	2,430,828,555	9.438726254
2019	118,604,408	1,996,718,507	5.939966379
2018	170,382,565	1,915,822,410	8.893442529

 

Gross Margin

Gross Margin = (Net Sales- Cost of Sales)/ Net Sales

	Gross Profit (Rs)	Net Sales (Rs)	Gross Margin (%)
2022	1,162,291,675	4858647421	23.92212429
2021	1,132,830,980	3207282244	35.32058902
2020	805,040,475	2430828555	33.11794546
2019	581,730,709	1996718507	29.13433751
2018	695,683,691	1915822410	36.31253541

 

Return on Total Assets

Return on Total Assets = (Net Income/ Average Total Assets)

	Net Income (Rs)	Average Total Assets (Rs)	Return on Total Assets (%)
2022	385589400	2828404063	13.63275513
2021	515919784	2165513098	23.82436683
2020	229439253	1585209252	14.47375183
2019	118604408	1306665302	9.076877439
2018	170382565	624258661	27.29358448

 

 

 

 

 

 

Return on Common Shareholders' Equity

Return on Common Shareholders' Equity = (Net Income - Preferred Dividends)/ Average Shareholders’ Equity

	Total Shareholders' Equity (Rs)	Average Shareholders' Equity (Rs)
2022	2076424740	1895290605
2021	1714156469	1468496822
2020	1222837175	1115889095
2019	1008941014	953412045
2018	897883076	448941538

 

	Net Income (Rs)	Average Shareholders' Equity (Rs)	Return on Common Shareholders' Equity (%)
2022	385589400	1895290605	20.34460568
2021	515919784	1468496822	35.1325094
2020	229439253	1115889095	20.56111617
2019	118604408	953412045	12.43999471
2018	170382565	448941538	37.9520607

 

Book Value per common share

Book Value per common share = (Shareholders' Equity applicable to common share/Number of common share outstanding)

	Total Equity (Rs)	Number of common shares Outstanding	Book Value per common share
2022	2076424740	2,750,000	755.0635418
2021	1714156469	2,750,000	623.3296251
2020	1222837175	2,750,000	444.6680636
2019	1008941014	2,750,000	366.8876415
2018	897883076	2,750,000	326.5029367

 

Basic Earnings per share

Basic Earnings per share = Net profit for the year/Number of shares issued

	Net Profit (Rs)	Number of shares issued (Rs)	Basic Earnings per share (per share)
2022	385589400	2750000	140.2143273
2021	515919784	2750000	187.6071942
2020	229439253	2750000	83.43245564
2019	118604408	2750000	43.12887564
2018	170382565	2750000	61.95729636

 

Market

Price Earnings Ratio

Price Earnings Ratio = Market price per share/ Earnings per share

	Market Price per share	Earnings per share	Price-Earnings Ratio
2022	1,182.25	140.43	8.41878516
2021	1,245.00	187.6	6.636460554
2020	337.4	83.43	4.044108834
2019	399.6	43.13	9.265012752
2018	430	61.83	6.954552806

 

Dividend Yield

Dividend Yield = Annual Dividends per share/ Market Price per share

	Annual Dividends per share (Rs)	Market price per share (Rs)	Dividend Yield (%)
2022	10	1182.25	0.845844787
2021	5.5	1245	0.441767068
2020	4.5	337.4	1.333728512
2019	5	399.6	1.251251251
2018	4	430	0.930232558

 

	Annual Dividends per share	Market price per share	Dividend Yield
2022	10	1182.25	0.845844787
2021	5.5	1245	0.441767068
2020	4.5	337.4	1.333728512
2019	5	399.6	1.251251251
2018	4	430	0.930232558

Summary of the Ratio Analysis

	2022	2021	2020	2019	2018
1.Liquidity and efficiency
Working Capital (Rs)	1536463757	1300015499	1026008888	847768802	703426210
Current Ratio	2.79834106:1	2.900391769:1	3.03696984:1	3.97728369:1	3.53214036;1
Acid test Ratio (times)	1.46828144	2.546581331	2.615443	3.3648533	2.95570991
Accounts Receivable Turnover (times)	6.99930305	4.896503953	5.32476347	6.0180335	6.98041956
Merchandise Turnover (times)	5.36322441	10.7287915	8.408364	8.4598409	15.2391771
Days’ Sales Uncollected (days)	47.8080358	85.57263102	83.8007176	64.8814402	58.8030193
Days’ Sales in Inventory (days)	112.212301	42.58588318	47.6673143	44.9835902	47.902849
Total Asset Turnover (times)	1.71780528	1.48107266	1.53344333	1.52810249	3.06895607
2.Solvency
Debt Ratio (%)	33.6899387	32.12393155	32.2754962	26.0747952	28.0840514
Equity Ratio (%)	66.3100613	67.87606845	67.7245037	73.9252048	71.9159486
Times Interest Earned (times)	42.8889936	123.1193703	171.735286	452.893125	787.120457
3.Profitability
Profit Margin (%)	7.93614697	16.08588658	9.43872625	5.93996638	8.89344253
Gross margin (%)	23.9221243	35.32058902	33.1179455	29.1343375	36.3125354
Return on Total Assets (%)	13.6327551	23.82436683	14.4737518	9.07687744	27.2935845
Return on Common Shareholders' Equity (%)	20.3446057	35.1325094	20.5611162	12.4399947	37.9520607
Book value per Common share	755.063542	623.3296251	444.668064	366.887641	326.502937
Basic Earnings per share (per share)	140.214327	187.6071942	83.4324556	43.1288756	61.9572964
4.Market
Price-Earnings Ratio (times)	8.41878516	6.636460554	4.04410883	9.26501275	6.95455281
Dividend Yield (%)	0.84584479	0.441767068	1.33372851	1.25125125	0.93023256

 

Discussion

Financial Statement Analysis is a process which analyze a company’s financial statements for decision making purposes. This is used both external and internal uses. External stakeholder’s use it to understand the overall health of an organization and to evaluate financial performance and business values. Internal users use it as a monitoring tool.

Working capital is the money available to meet your current, short-term obligations. According to above results working capital have been increased from 2018 to 2022. Current ratio measures the short-term debts-paying ability of the company. According to the analysis current ratio have been decreased from 2018 to 2022. Therefore, the ability of short-term debt-paying decreases. Due to all values are greater the 1, debt paying ability is stronger. Acid test ratio measure’s ability of paying liabilities without stock. Here all 5 years the value is greater than 1. So, the ability of paying liabilities without stock is high. But normally the ability has been decreased from 2018 to 2022. Account receivable turnover measures how many times a company converts its receivables into cash each year. This value has been decreased until 2021 and after that it increases. Merchandise Turnover ratio is the number of times merchandise is sold and replaced during the year. This value has been decreased from 2018 to 2020 and again it increases in 2021 and it decreases again in 2022. Days’ Sales Uncollected ratio measures the liquidity of receivables. That means how many days wait to get money back. It is better if this value is lower. From 2018 to 2021 this value has been increased but in 2022 there is a sudden decrease. Days’ sales in inventory measures the liquidity of inventory. Here that value have been increased by 2022. Total assets turn over measures the efficiency of assets in producing sales. All 5 years have value which is greater than 1. This is a favorable situation for the organization.

       When consider the debt ratio that means what potion of a company’s assets are contributed by creditors. This ratio has been increased during the 5 years. Equity ratio means what potion of a company’s assets are contributed by owners. This has been decreased from 2018 to 2022. This is not favorable for the company. Times Interest Earned is the ability of a firm’s operation to provide protection to the long-term creditor. According to analysis this ratio has been decreased from 2018 to 2022. This is a bad situation for this organization.

         Profit margin means company’s ability to earn a net income from sales. In 2022, 7.93% profit earn for every sale. During these 5 years highest profit margin shows in 2021. Gross margin measures the amount remaining from Rs 1 in sales that is left to cover operating expenses and a profit after considering cost of sales. If this value is high that situation is good. During analyzed 5 years gross margin ratio distributed between 23% - 37%. The highest gross margin shows in 2018. Return on total assets is generally considered the best overall measure of a company’s profitability. This has been changed year to year. Highest value shown in 2018. In 2018 they earned 37.95% of profit from their total assets. Return on common shareholders’ equity means how well the company employed the owners’ investments to earn income. The highest return on common shareholder’s equity shows in 2018. That means one shareholder earn 37.95% profit percentage. Book value per common share measures liquidation at reported amounts. Simply that means equity potion for shareholder. This value has been increased from 2018 to 2022. Basic earnings per share means how much income was earned for each share for of common stock outstanding. If this value is high better to buy shares of that organization. This value also has been increased from 2018 to 2021. Then decreased little amount in 2022.

           Price earnings ratio is often used by investors as a general guideline in gauging stock values. Normally higher the price earning ratio, the more opportunity a company has for growth. Highest price earning ratio shows in 2019. Dividend yield identifies the return, in terms of cash dividends, on the current market price of the stock. This organization shows small dividend yield values. They earn very small amount of income percentage per share. According to above results this organization in financially stable position.