FINANCIAL STATEMENT ANALYSIS OF CARGILLS CEYLON PLC FROM YEAR 2018-2022

 

Company Profile

 

Food City is Sri Lanka’s largest modern retailer. Its pioneer venture into modern

trade in 1983 was an innovation of the company’s trading legacy.

Thereafter Cargills Food City continued to challenge the norm by taking to the masses

what was traditionally an affluent focused business and offering ‘Higher Value for the

Lowest Price’.

Today the Cargills retail operation is spread across the island in two formats as ‘Cargills Food

City’ supermarkets and ‘Cargills Food City Express’ convenience stores. Cargills Food City

has been rated the 10th most valuable brand in Sri Lanka as per the Brand Finance Index

ratings of 2018 with a AA+ rating and is the only Retailer ranked in the top ten of national

brands.

Cargills Food city footprint has reached 353 stores covering all districts of Sri Lanka.

 

Processed Meats

Cargill’s entered into food manufacturing through the acquisition of the ‘Goldi’ meats facility in 1993. Today the range consists of ‘Goldi’ and

‘Sams’ catering to mass market demand and the ‘Finest’ premium deli range. Cargills is rapidly gaining market share in this category through

its product innovation, quality and unique taste. Cargills Quality Foods has secured the ISO 9001: 2000 Quality Management System

certification, ISO 22000: 2005 Food Safety Management System certification and ISO 14001: 2004 Environment Management System

certification. The company has also engaged international expertise to develop new and innovative products which offer a novel variety of

taste whilst catering to the nutritional needs of the consumer. In 2014 ‘Goldi’ secured the certification for the SLS standard.

 

Dairy

Magic is the leading dairy ice cream in Sri Lanka having commenced operations in 2002

after the acquisition of an international ice cream facility. Cargills Quality Dairies which

produces Magic ice cream and UHT and yoghurt products for its sister brand ‘Kotmale’ is

the only dairy product manufacturing company in Sri Lanka to be accredited with all three

ISO certifications; ISO 9001: 2000 Quality Management System certification, ISO 22000:

2005 Food Safety Management System certification and ISO 14001: 2004 Environment

Management System certification. Cargills Magic was the first to introduce fresh fruits

and local flavours to its portfolio of ice creams creating a new trend in the overall ice

cream industry. Through its innovation driven focus Magic has expanded its market share

exponentially and is now the fastest growing ice cream brand in Sri Lanka. The ‘Heavenly’

range is the premium segment of the Magic offering.

                                                                                                     (Annual Report 2021/22)

 

Financial Statement Analysis

 

This report analysis audited financial statements of Cargills Ceylon PLC from year 2018 to 2022 through this report it is intended to provide strong analyse about the financial statements of this organization over it’s stake holders.

 

Horizontal Analysis

 

Horizontal analysis signifies to reviewing the behavior of each individual variable in the financial statements over past five years. This describes the difference of each item and direct to find the cause of differences. Through this analysis this trigger to carries an opportunity to compare and contrast the financial positions of Cargills Ceylon PLC across year 2018 to 2022.

Horizontal Analysis of Statement of Comprehensive Income Statement

 

P&L	2022	2021	2020	2019	2018
Revenue	-26%	87%	129%	-56%	-28%
Cost of sales	-25%	87%	137%	-56%	-28%
Gross Profit	-65%	94%	-97%	-44%	-34%
Other income	6%	-25%	-50%	-16%	41%
Distribution expenses	-60%	-93%	-55%	21%	-29%
Administrative expenses	146%	43%	16%	23%	11%
Other Expences	14%	-31%	-22%	-28%	-22%
Profit from operations	-26%	-40%	-67%	-24%	52%
Finance income / cost	-51%	-63%	-58%	-48%	15%
Changes in fair value of investment property	-4%	-120%	132%	-55%	180%
Profit before tax	-16%	-35%	-62%	-17%	69%
Income tax expense	51%	-75%	-2%	-11%	43%
Profit for the year	-19%	-33%	-65%	-17%	70%

 

 

·         Gross profit increased by year 2021to 94%  and it’s decreased to 65% in year 2022.

·         Net Financial income rapidly decreased from year 2018-2021, and it’s increased by 12% in 2022.

 

 

Income Statement

 

P&L	2022	2021	2020	2019	2018	2017
Revenue	31,013.00	78,935.00	96,461.00	18,743.00	30,210.00	42,189.00
Cost of sales	(30,502.00)	(76,115.00)	(96,419.00)	(17,933.00)	(29,246.00)	(40,733.00)
Gross Profit	511.00	2,820.00	42.00	810.00	964.00	1,456.00
Other income	3,463,933.00	2,443,649.00	1,631,343.00	2,754,486.00	4,616,918.00	3,270,523.00
Distribution expenses	(6,950.00)	(1,247.00)	(7,970.00)	(21,174.00)	(12,406.00)	(17,547.00)
Administrative expenses	(1,413,394.00)	(820,375.00)	(666,971.00)	(706,943.00)	(640,974.00)	(575,293.00)
Other Expences	(153,815.00)	(93,336.00)	(104,531.00)	(96,353.00)	(104,406.00)	(134,589.00)
Profit from operations	1,890,285.00	1,534,005.00	851,913.00	1,930,826.00	3,860,096.00	2,544,550.00
Finance income / cost	(322,300.00)	(247,480.00)	(279,290.00)	(345,359.00)	(760,071.00)	(662,286.00)
Changes in fair value of investment property	69,043.00	(14,549.00)	166,017.00	32,336.00	200,427.00	71,638.00
Profit before tax	1,637,028.00	1,271,976.00	738,640.00	1,617,803.00	3,300,452.00	1,953,902.00
Income tax expense	(132,699.00)	(21,970.00)	(86,180.00)	(77,784.00)	(125,618.00)	(87,609.00)
Profit for the year	1,504,329.00	1,250,006.00	652,460.00	1,540,019.00	3,174,834.00	1,866,293.00

 

 

 

Horizontal Analysis of Statement of Financial Position

 

SOFP	2022	2021	2020	2019	2018
ASSETS
Non-Current Assets
Property, plant and equipment	28%	30%	3%	3%	2%
Investment property	-3%	30%	23%	7%	-2%
Investment in equity accounted investee	-8%	-1%	0%	0%	0%
Total Non-Current Assets	2%	16%	7%	3%	0%
Current Assets
Inventories	178%	-81%	353%	152%	13%
Trade and other receivables	-23%	-28%	6%	159%	-2%
Amount due from related companies	204%	90%	44%	35%	21%
Cash and cash equivalents	38%	177%	-89%	333%	-76%
Total Current Assets	98%	41%	24%	101%	7%
Total Assets	14%	19%	9%	15%	1%
EQUITY AND LIABILITIES
Equity
Stated capital	5133%	5082%	5069%	4896%	4896%
General reserves	-86%	-84%	-94%	-93%	-95%
Retained earnings	-8%	-11%	-12%	2%	-16%
Total Equity	33%	31%	26%	33%	21%
Non-Current Liabilities
Lease liability
Deferred tax liabilities	110%	75%	56%	41%	32%
Employee benefit liability	76%	71%	53%	32%	17%
Total Non-Current Liabilities	296%	80%	54%	34%	21%
Current Liabilities
Trade & other payables	37%	34%	-39%	40%	-5%
Current taxation	42%	10%	-19%	-46%	1%
Amounts due to related companies	8%	-17%	274%	-70%	50%
Dividend payable	9%	-4%	20%	-3%	-4%
Interest bearing loans and borrowings	-56%	-43%	-51%	-53%	-58%
Lease liability
Total Current Liabilities	-47%	-38%	-48%	-47%	-54%
Total Liabilities	24%	-25%	-42%	-42%	-49%
Total Equity and Liabilities	28%	5%	-6%	-2%	-12%

 

-          According to above calculations total asset growth rate as below.

 

Year	Total Asset growth rate
2018	1%
2019	15%
2020	9%
2021	19%
2022	14%

 

-          Most of the years total asset rate is positive figure and , and it implicated comparatively good.

And from the period of 2018-2022 total assets rapidly growing ,and it is a healthy picture of this organization from financial.

-          Through year 2018 it has 1% of total assets , reason is during the year thy have -2% of trade receivables and -76% of cash and cash equivalents. And when comparing with 2019 it is drastically growing over assets. Current assets increased by 101% in year 2019.

-          Total assets rapidly growing in 2022 when compared to 2018, but it decreased by 5% ,than 2021.and still total assets shows positive figure as 14% it’s determine Cargills Ceylon PLC is strong over years.

-          Total equity has increased over the years and it’s a good indication of company stability. The equity drastically increased from -12% to 28%.

-          Total liabilities have been changed too. Through out the years it shows negative value and only year 2022 it shows 24%. The increase of total liabilities includes of mainly due to increase in Interest bearing borrowings of the company.

 

 

 

Trend Analysis of Statement of Comprehensive Income Statement.

 

P&L	2022	2021	2020	2019	2018
Revenue	74%	187%	229%	44%	72%
Cost of sales	75%	187%	237%	44%	72%
Gross Profit	35%	194%	3%	56%	66%
Other income	106%	75%	50%	84%	141%
Distribution expenses	40%	7%	45%	121%	71%
Administrative expenses	246%	143%	116%	123%	111%
Other Expences	114%	69%	78%	72%	78%
Profit from operations	74%	60%	33%	76%	152%
Finance income / cost	49%	37%	42%	52%	115%
Changes in fair value of investment property	96%	-20%	232%	45%	280%
Profit before tax	84%	65%	38%	83%	169%
Income tax expense	151%	25%	98%	89%	143%
Profit for the year	81%	67%	35%	83%	170%

 

Income statement

 

P&L	2022	2021	2020	2019	2018	2017
Revenue	31,013.00	78,935.00	96,461.00	18,743.00	30,210.00	42,189.00
Cost of sales	(30,502.00)	(76,115.00)	(96,419.00)	(17,933.00)	(29,246.00)	(40,733.00)
Gross Profit	511.00	2,820.00	42.00	810.00	964.00	1,456.00
Other income	3,463,933.00	2,443,649.00	1,631,343.00	2,754,486.00	4,616,918.00	3,270,523.00
Distribution expenses	(6,950.00)	(1,247.00)	(7,970.00)	(21,174.00)	(12,406.00)	(17,547.00)
Administrative expenses	(1,413,394.00)	(820,375.00)	(666,971.00)	(706,943.00)	(640,974.00)	(575,293.00)
Other Expences	(153,815.00)	(93,336.00)	(104,531.00)	(96,353.00)	(104,406.00)	(134,589.00)
Profit from operations	1,890,285.00	1,534,005.00	851,913.00	1,930,826.00	3,860,096.00	2,544,550.00
Finance income / cost	(322,300.00)	(247,480.00)	(279,290.00)	(345,359.00)	(760,071.00)	(662,286.00)
Changes in fair value of investment property	69,043.00	(14,549.00)	166,017.00	32,336.00	200,427.00	71,638.00
Profit before tax	1,637,028.00	1,271,976.00	738,640.00	1,617,803.00	3,300,452.00	1,953,902.00
Income tax expense	(132,699.00)	(21,970.00)	(86,180.00)	(77,784.00)	(125,618.00)	(87,609.00)
Profit for the year	1,504,329.00	1,250,006.00	652,460.00	1,540,019.00	3,174,834.00	1,866,293.00

-          In trend analysis profit of the year shows 81% in 2022, it is good achievement of the company, but when we compared the total profit with year 2018 , the total drastically decreased. It’s not a good indication in profitability.

 

Trend Analysis of Statement of Financial Position.

 

SOFP	2022	2021	2020	2019	2018
ASSETS
Non-Current Assets
Property, plant and equipment	128%	130%	103%	103%	102%
Investment property	97%	130%	123%	107%	98%
Investment in equity accounted investee	92%	99%	100%	100%	100%
Total Non-Current Assets	102%	116%	107%	103%	100%
Current Assets
Inventories	278%	19%	453%	252%	113%
Trade and other receivables	77%	72%	106%	259%	98%
Amount due from related companies	304%	190%	144%	135%	121%
Cash and cash equivalents	138%	277%	11%	433%	24%
Total Current Assets	198%	141%	124%	201%	107%
Total Assets	114%	119%	109%	115%	101%
EQUITY AND LIABILITIES
Equity
Stated capital	5233%	5182%	5169%	4996%	4996%
General reserves	14%	16%	6%	7%	5%
Retained earnings	92%	89%	88%	102%	84%
Total Equity	133%	131%	126%	133%	121%
Non-Current Liabilities
Lease liability
Deferred tax liabilities	210%	175%	156%	141%	132%
Employee benefit liability	176%	171%	153%	132%	117%
Total Non-Current Liabilities	396%	180%	154%	134%	121%
Current Liabilities
Trade & other payables	137%	134%	61%	140%	95%
Current taxation	142%	110%	81%	54%	101%
Amounts due to related companies	108%	83%	374%	30%	150%
Dividend payable	109%	96%	120%	97%	96%
Interest bearing loans and borrowings	44%	57%	49%	47%	42%
Lease liability
Total Current Liabilities	53%	62%	52%	53%	46%
Total Liabilities	124%	75%	58%	58%	51%
Total Equity and Liabilities	128%	105%	94%	98%	88%

 

Statement of Financial Position.

 

SOFP	2022	2021	2020	2019	2018	2017
ASSETS
Non-Current Assets
Property, plant and equipment	3,459,660.00	3,510,224.00	2,784,641.00	2,801,303.00	2,772,004.00	2,707,562.00
Investment property	3,170,928.00	4,259,566.00	4,028,718.00	3,514,555.00	3,207,009.00	3,274,803.00
Investment in equity accounted investee	4,717,843.00	5,064,233.00	5,094,787.00	5,113,672.00	5,121,439.00	5,108,990.00
Total Non-Current Assets	11,348,431.00	12,834,023.00	11,908,146.00	11,429,530.00	11,100,452.00	11,091,355.00
Current Assets
Inventories	13,162.00	903.00	21,471.00	11,943.00	5,369.00	4,740.00
Trade and other receivables	503,808.00	469,381.00	690,249.00	1,682,799.00	635,515.00	650,915.00
Amount due from related companies	2,333,277.00	1,458,638.00	1,105,756.00	1,037,244.00	924,502.00	766,706.00
Cash and cash equivalents	73,504.00	147,419.00	5,657.00	230,297.00	12,594.00	53,142.00
Total Current Assets	2,923,751.00	2,076,341.00	1,823,133.00	2,962,283.00	1,577,980.00	1,475,503.00
Total Assets	14,272,182.00	14,910,364.00	13,731,279.00	14,391,813.00	12,678,432.00	12,566,858.00
EQUITY AND LIABILITIES
Equity
Stated capital	6,841,068.00	6,773,878.00	6,756,591.00	6,530,709.00	6,530,709.00	130,723.00
General reserves	499,277.00	572,409.00	221,379.00	256,845.00	165,409.00	3,660,492.00
Retained earnings	5,261,395.00	5,087,199.00	5,019,967.00	5,854,635.00	4,814,260.00	5,714,490.00
Total Equity	12,601,740.00	12,433,486.00	11,997,937.00	12,642,189.00	11,510,378.00	9,505,705.00
Non-Current Liabilities
Lease liability	1,002,703.00	36,068.00	-		-
Deferred tax liabilities	287,150.00	238,754.00	212,756.00	193,443.00	180,324.00	136,731.00
Employee benefit liability	594,973.00	580,027.00	517,114.00	445,935.00	397,146.00	338,695.00
Total Non-Current Liabilities	1,884,826.00	854,849.00	729,870.00	639,378.00	577,470.00	475,426.00
Current Liabilities
Trade & other payables	603,905.00	591,508.00	271,302.00	620,367.00	420,186.00	441,809.00
Current taxation	238,414.00	183,826.00	135,717.00	90,869.00	168,787.00	167,736.00
Amounts due to related companies	15,338.00	11,819.00	53,009.00	4,238.00	21,242.00	14,170.00
Dividend payable	72,295.00	63,804.00	79,629.00	64,589.00	63,836.00	66,389.00
Interest bearing loans and borrowings	3,246,919.00	4,132,570.00	3,605,562.00	3,470,648.00	3,042,787.00	7,306,824.00
Lease liability	22,825.00	14,288.00	-	-	-	-
Total Current Liabilities	4,199,696.00	4,997,815.00	4,145,219.00	4,250,711.00	3,716,838.00	7,996,928.00
Total Liabilities	10,480,415.00	6,370,756.00	4,925,445.00	4,890,089.00	4,294,308.00	8,472,354.00
Total Equity and Liabilities	23,082,155.00	18,804,242.00	16,923,382.00	17,532,278.00	15,804,686.00	17,978,059.00

 

 

Vertical Analysis of Statement of Comprehensive Income Statement.

 

P&L	2022	2021	2020	2019		2018
Revenue	100%	100%	100%	100%		100%
Cost of sales	-98%	-96%	-100%	-96%		-97%
Gross Profit	2%	4%	0%	4%		3%
Other income	11169%	3096%	1691%	14696%		15283%
Distribution expenses	-22%	-2%	-8%	-113%		-41%
Administrative expenses	-4557%	-1039%	-691%	-3772%		-2122%
Other Expences	-496%	-118%	-108%	-514%		-346%
Profit from operations	6095%	1943%	883%	10302%		12778%
Finance income / cost	-1039%	-314%	-290%	-1843%		-2516%
Changes in fair value of investment property	223%	-18%	172%	173%		663%
Profit before tax	5279%	1611%	766%	8632%		10925%
Income tax expense	-428%	-28%	-89%	-415%		-416%
Profit for the year	4851%	1584%	676%	8217%		10509%

 

Income Statement.

 

P&L	2022	2021	2020	2019	2018	2017
Revenue	31,013.00	78,935.00	96,461.00	18,743.00	30,210.00	42,189.00
Cost of sales	(30,502.00)	(76,115.00)	(96,419.00)	(17,933.00)	(29,246.00)	(40,733.00)
Gross Profit	511.00	2,820.00	42.00	810.00	964.00	1,456.00
Other income	3,463,933.00	2,443,649.00	1,631,343.00	2,754,486.00	4,616,918.00	3,270,523.00
Distribution expenses	(6,950.00)	(1,247.00)	(7,970.00)	(21,174.00)	(12,406.00)	(17,547.00)
Administrative expenses	(1,413,394.00)	(820,375.00)	(666,971.00)	(706,943.00)	(640,974.00)	(575,293.00)
Other Expenses	(153,815.00)	(93,336.00)	(104,531.00)	(96,353.00)	(104,406.00)	(134,589.00)
Profit from operations	1,890,285.00	1,534,005.00	851,913.00	1,930,826.00	3,860,096.00	2,544,550.00
Finance income / cost	(322,300.00)	(247,480.00)	(279,290.00)	(345,359.00)	(760,071.00)	(662,286.00)
Changes in fair value of investment property	69,043.00	(14,549.00)	166,017.00	32,336.00	200,427.00	71,638.00
Profit before tax	1,637,028.00	1,271,976.00	738,640.00	1,617,803.00	3,300,452.00	1,953,902.00
Income tax expense	(132,699.00)	(21,970.00)	(86,180.00)	(77,784.00)	(125,618.00)	(87,609.00)
Profit for the year	1,504,329.00	1,250,006.00	652,460.00	1,540,019.00	3,174,834.00	1,866,293.00

Ratio Analysis

 

Liquidity and Efficiency Ratios

 

	2022	2021	2020	2019	2018
Current ratio	0.70	0.42	0.44	0.70	0.42
Acid test ratio	0.69	0.42	0.43	0.69	0.42
Accounts Receivable turnover	0.06	0.17	0.08	0.02	0.05
Merchandize turnover	4.34	6.80	5.77	2.07	5.79
Days' sales uncollected	15.13	6.00	17.45	33.91	21.55
Days' sales inventory	157.50	4.33	81.28	243.08	67.01
Total assets turnover	0.001	0.004	0.006	0.001	0.002

 

-          Liquidity ratio indicates the company ability to settle short term liabilities and debt planning and to make revenues . and these ratios are important to the parties like stakeholders / lenders. In fact the higher rate of this ratios means the company has healthy finance.

-          Current ratio determined the ability to settle short term liabilities (Trade Credits, other short term Liabilities) by current assets (Trade receivables, cash, inventory). Higher of this ratio means company’s capable to settle their short term liabilities and ongoing good financial health. In Cargills Ceylon PLC obtained the current ratio is less than 1 and it is still in positive figure , that indicate the stable level.

-          Acid test Ratio is the ratio measures company’s ability to settle short term liabilities over the quick assets, that indicates except inventories.  This provides the better understanding of organization liquidation.

-          If Acid test ratio is greater than 1 there were able to settle short term liabilities quickly. But in Cargills Ceylon PLC the scenario is difference , they would not be able to settle short term liabilities by quick assets since each year they quick asset ratio is less than 1.

-          Account receivables turn over indicated how many time company convert their receivables in to cash during the year. If Account receivable turnover is in high value it is not a good position to company.

-          Merchandise (Inventory) Turnover ratio measures the number of times inventory is sold and replaced during the year. A lower turnover means the poor sales and poor performance of the organization. In Cargills Ceylon PLC  Merchandise Turnover is always greater than 1 and its in positive figure. And it indicate company’s strong sales and performances .

-          Days’ sales uncollected ratio measures the company’s liquidation of receivables, and in another way it is debtor collection period or Days sales outstanding . based on this calculations this organization has bad DSU ratio in 2019 like 33.91 , and after the years it decrease to 15.13 days. And lower ratio is specified healthy collection.

-          Days' sales inventory measures the liquidation of inventory of particular period of time. And other way to call it as  inventory holding period. This ratio should be in lower rate , but in Cargills Ceylon PLC it shows higher rate, and organization should take immediate marketing strategies and innovative implications to reduce this situation.

-          Total asset turnover measures the efficiency of asset producing sales.

 

 

Solvency Ratios

 

Solvency Ratios	2022	2021	2020	2019	2018
Debt ratio	73%	43%	36%	34%	34%
Equity ratio	88%	83%	87%	88%	91%

 

-          Solvency ratio concluded the long term debt paying ability to the company. This Ratio reflect the respective creditors and shareholders against the assets . Debt equity ratio is for measures  the relationship between borrowings and total assets /and equity  , and to measure the financial solvency of the company. And also capability to generate future revenues and meet long term requirements.

-          Debt ratio measures how company total assets contribute to liabilities, total liabilities increasing effect to increase debt ratio.

-          Equity ratio measures how organizations assets contribute by owners equity.

Profitability Ratios

 

Profitability Ratios	2022	2021	2020	2019	2018
Profit margin	48.51	15.84	6.76	82.17	105.09
Gross margin	60.69	27.99	2,296.69	23.14	31.34
Return on total assets	0.07	0.07	0.04	0.09	0.17
Return on Common Shareholders’ Equity	0.11	0.10	0.03	0.09	0.30

 

-          Profitability ratios are calculated to determine profitability of the firm. The objective of each firm is to earn profit to grow and existence of the company. Investors needs higher returns, need to settles wages to employees, and also day to day operational activities.

-          Profit Margin ratio describes company’s ability to earn net income from sales. High profit ratio is high profitability of the firm, in Cargills Ceylon PLC shows high profit ratio in 2018 such as 105.09 and after years it decrease to 48.51, but still they are in good position in sales. And with this situation this organization need to take immediate actions and some more new initiatives to maximize their profit.

-          Gross margin ratio measures the amount renaming from Rs.1 sales that is left to cover operating expanses and a profit after considering cost of sales. If this value is (-) organization cannot continue the business. Here this organization occurs high level of gross margin and it also good identification of financial health.

-          Return on total assets ratio identifies how many net incomes generated as per each rupee of assets invested. This is the best ratio to measure company’s profitability . in Cargills Ceylon PLC significant lower rate of total asset ratio due to declining of profitability for the years.

-          Return on common Shareholders’ Equity ratio is return on shareholder’s funds . This indicates how company employed owners investments to ear profit. In Cargills Ceylon PLC the value is decrease from year 2018- 2022. This is also not a good identification to company’s finials.

 

Altman Z-Score

 

The Z-score is the output of a credit-strength test that measures a openly traded manufacturing company's probability of bankruptcy. The Altman Z-score is a combination of five weighted business ratios that is used to estimate the probability of financial distress. The formula based on information found in the income statement and balance sheet of an organization; as such, it can be willingly derivative from commonly available information. The Altman Z score formula for Cargills Ceylon PLC as follows.

 

   Z = -0.089400836Q₁+ 0.368646854 Q₂+0.114700611 Q₃+1.202408492 Q₄+ 0.002172968 Q₅

 

Q₁ = Working capital / Total assets

Q₂ = Retained earnings / Total assets

Q₃ = Earnings before interest and taxes / Total assets

Q₄ = Market value of equity / Book value of total liabilities

Q₅ = Total sales / Total assets

 

Zones of Discrimination:

 

Z > 2.99                  -    Safe zone

1.8 < Z < 2.99         -    Grey zone

Z<1.80                    -    Distress zone

 

 

Year	Q1	Q2	Q3	Q4	Q5	Altman Z score
2022	-0.089400836	0.368646854	0.114700611	1.202408492	0.002172968	1.598528091
2021	-0.195935793	0.341185433	0.085308179	1.951650008	0.005293969	2.187501796
2020	-0.169109229	0.365586265	0.053792513	2.435909243	0.00702491	2.693203702
2019	-0.089525065	0.40680316	0.112411341	2.585267671	0.001302338	3.016259444
2018	-0.168700514	0.379720458	0.260320204	0.656524954	0.002382787	1.130247887

 

 

 

 

 

Year	Working capital	Total assets	Retained earnings	Earnings before interest and taxes	Market value of equity	Book value of total liabilities	Total sales
2022	(1,275,945.00)	14,272,182.00	5,261,395.00	1,637,028.00	12,601,740.00	10,480,415.00	31,013.00
2021	(2,921,474.00)	14,910,364.00	5,087,199.00	1,271,976.00	12,433,486.00	6,370,756.00	78,935.00
2020	(2,322,086.00)	13,731,279.00	5,019,967.00	738,640.00	11,997,937.00	4,925,445.00	96,461.00
2019	(1,288,428.00)	14,391,813.00	5,854,635.00	1,617,803.00	12,642,189.00	4,890,089.00	18,743.00
2018	(2,138,858.00)	12,678,432.00	4,814,260.00	3,300,452.00	11,510,378.00	17,532,278.00	30,210.00

 

 

Upon the above calculations, can identify that the company in “Distress Zone” in year 2022. While over the last four years only year 2022 company was in the “safe zone”. By analysing company’s current situation , organization’s decision makers have huge part to do for stability of the organization . since current year Cargills Ceylon PLC is in Distress Zone.