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Course: MMS 1 (SEM II)

Specialization: Finance
Subject: Analysis of Financial Statement

INDEX
SR.NO PARTICULARS

PG.NO

Overview of Jain studio

Management and discussion analysis

4-5

Auditors report

6-7

Cash flow analysis

8-9

Common size statement & Analysis :

10 - 13

Profit & Loss


Balance sheet
6

Trend analysis

14 - 16

Profit & Loss


Balance sheet
7

Ratio analysis

17 - 23

Peer analysis

24 - 26

Overview of Jain studio


The Company was incorporated on 3rd January, with the main objects of
Production and Telecast of TV. Programmes. It obtained the Certificate of
Commencement of Business on 5th February 1991, and to begin with, started
with video production facilities.
In October 1993, the Company entered into a Memorandum of
Understanding with two U.S. - based Companies of NRl's viz. Joint American
Indian Network, Inc., an Illinois Corp., and Development Finance and
Communications Ltd., a New York Corp., for the purpose of operating a 24 hour
TV broadcasting business directed primarily at the Indian market. Subsequently,
a Joint Venture Agreement was signed between Joint American Indian Network
Inc. And the company.
In the year 1994-95 JAIN TV provided an opportunity and facility to all
political parties to avail the time slots and put their political propaganda on TV.
A cartoon film made by the Company titled Wisdom of the Mouse was selected
for screening at International Conference on Population & Development, which
was organised by the United Nations at Cairo (EGYPT) from 5th to 13th
September. This
Film earned a Certificate of Recognition from John Hopkins University,
Baltimore (U.S.A.).
In the year 1998 The Company had reimported 300 video programmes
from Hong Kong earlier exported to Expotech Ltd., Hong Kong in the financial,
year 1995-96 for a total value of Rs. 260.38 lacs. During the year, the company
had revalued its immovable properties situated at Udyog Vihar Gurgaon,
Mumbai, Chennai and Bangalore at Rs.350 lacs, 82 lacs, 40 lacs and Rs. 50 lacs
respectively, creating Revaluation Reserve of Rs. 397.79 lacs.
In the year 2000 Jain Studios Ltd (JSL), the broad-casting company for
Jain TV is making a foray into the information and technology sector with the
focus on internet related projects. Jain Studios has joined hands with
Transaction Systems Architects to launch secure Internet payment gateway to
carry out credit card transactions on the Internet. Jain TV begins free Net
facility.

Management Discussion and Analysis


The Company's primary business is broadcasting.
The Company currently operates a 24-hour News and Current Affairs Channel
under the brand name JAIN Television.
Company is having other revenue and investments segment, i.e. Teleport,
Mobile Healthcare, Education Infrastructure & Technology, Others including
production and Distribution of Cinema photographic films.
Discussions on financial performance in respect to operational
performance :
During F.Y 2013-14 it shows growth of 35.5% as operational income increases
from 1786.10 lakh to 2420.41 lakh but this increase is due to sale of equipment.
It has not made any provisions for doubtful debts it is because of it may follows
stringent measures to assure quick collection.
Jain Studio Ltd get maximum sales revenue from Television 1,77,851.39 (000)
followed by Educational infrastructure & Technology 64,189.96.So we can say
that co. is following evolved strategies as it has business segments.
Television segment of Jain studio is suffering loss 2,688.30 (000) while the
other segment Educational infrastructure & Technology I enjoying profit of
19,797.05 (000) in F.Y 2013-14.
Human Resources:
During 2013-14 the strength of employees increased from 73 to 85. Skilled
Employees from 60 to 64 and Non-Skilled Employees 13 to 21.As a result
there is slight increase in employees benefit expenses from 41,998.86 to
43,525.15 (000).
Internal Control System and Adequacy
Co. is safeguarding its equipment by providing depreciation and by replacing
time to time.

Some internal control system are as follows

Financial Systems and Reporting


Management Reporting
H R Systems and Reporting
Sales Systems and Reporting
The Co. has appointed Auditor Bansal & Giri (CA) for Internal Control
System and to audit day to day transactions.

Risk and Concerns:


As the business depends on innovation, creativity to cope up with competition it
should equipped with equally talented and skilled personnel.
It does not face operational risk as JAIN TV is Free to Air.
The co. has opportunities as well as risks due to evolution of technology and
distribution channels such as IPTV, DHS, and HITS.

Auditors report
5

a) The company has generally maintained records showing full particulars


including quantitative details and situation of fixed assets.
b) The company has not disposed off a substantial part of its fixed assets
during the year to affect the status of the company as a going concern.
c) The company is maintaining proper records of its inventories. The
discrepancies noticed on verification between the physical stocks and the
book records were not material.
d) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained under
Section 301 of the Act.
e) There are adequate internal control procedures commensurate with the
size of the company and the nature of its business with regard to the
purchase of inventories, fixed assets and the sale of goods. During the
course of our audit, we did not observe any major weaknesses in internal
controls.
f) Contracts or arrangements referred to in section 301 of the Act which
need to be entered into register required to be maintained under that
section have been entered accordingly.
g) The company has not accepted deposits from the public during the year
and there are no outstanding deposits.
h) Auditors have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956.
i) Undisputed statutory dues were outstanding at the year end, for a period
of more than six months from the date they became payable.
j) There are no dues in respect of sales Tax, income tax, custom duty,
wealth tax, service tax, excise duty and cess that have not been deposited
with the appropriate authorities on account of any dispute.

k) The company has not given any guarantee for loans taken by others from
banks or financial institutions.
l) According auditors overall examination of the Balance Sheet of the
company, we report that funds raised during the year on short-term basis
have not been used for long term investments.
m) The company has not issued any debentures during the current financial
year.
n) The company has not made any public issue during the current financial
year.
o) No fraud on or by the company has been noticed or reported during the
course of audit.

CASH FLOW ANALYSIS OF JAIN STUDIOS LIMITED


FOR THE YEAR ENDING 2014
NET PROFIT
Net profit of Jain studios for the year 2014 is 10,645.73 which is positive
amount.
CASH FLOW FROM OPERATING ACTIVITIES
7

NON CASH EXPENSES


In 2014 non-cash expenses of the company was 9811.37 which consist of
depreciation, Interest expenses, interest income, profit/ (loss) before exceptional
items etc
It means that company is working effectively by providing depreciation on time
& at the same time they also invest in purchasing assets.
Conclusion: - The Company is working effectively.
Company is not complying with income tax rules & regulations as they are not
paying timely taxes.
Working capital is also managed effectively in this company since they are able
to raise surplus of Rs.17706.
Net cash generated from operating activities was 28,648.64.is positive amount
which shows the growth of company.
CASH FLOW FROM INVESTING ACTIVITIES
Net cash flow from investing activities was (734.36) which consist of interest
received and Purchase of fixed assets.
By purchasing fixed assets properly & providing timely depreciation as well
they are managing investing activities effectively.
CASH FLOW FROM FINANCING ACTIVITIES
Net cash flow from financing activities was (30.675.00) which is negative
amount, which Consist of interest paid, Repayment of long term loan, short
term loan repaid, and equity share money received, Warranty money received.
After analysing financing activity we conclude that the main reason for negative
amount is no issue of equity shares in the year 2014
NET DECREASE IN CASH AND CASH EQUIVALENT
Net decrease in cash and cash equivalents was (2,760.71) it is also negative
amount which consist of opening stock of cash and cash equivalent and closing
stock of cash equivalent which means operating activities are not sufficient to
pay off their financing & investing activity.

The company is in growth stage as company is earning profit as well as they are
investing in purchasing of fixed assets.

Common size statement (Profit & Loss)


Standalone Profit & Loss
account

Particulars

Revenue From Operations


Other Income
Total Revenue

in Rs. '000
Mar '14

Amount
242041.
4
9742.22
251783.
6

Percen
t

Mar '13

Amount

Percent

96%
4%

178609.8
6
5264.54

97.14%
2.86%

100%

183874.4

100.00%

Mar '12

Amount

Percent

124547.
04
323.64
124870.
68

100%
0%
100%
9

EXPENSES
Production Expenses
Decrease/(Increase) in
Stock
Employee Benefit Expense
Finance Cost
Depreciation/Amortization
Other expenses
Total Expenses

Profit/(Loss) before
exceptional Items
Exceptional Items (Incomes)
Exceptional Items
(expenses)

154575.
8

61.39
%

102584.3
6

56%

96987.4
9

78%

0
43525.1
5

0.00%
17.29
%

0%

0%

41998.86

23%

25%

240.5
9665.47
33130.9
2
241137.
8

0.10%
3.84%
13.16
%
95.77
%

6191.25
9645.59

3%
5%

32655.9
193075.9
6

18%
105%

31370.6
11458.4
9
9691.84
23125.1
8
172633.
6

138%

42762.9
2

-34%

10645.7
3

4.23%

-9201.56

-5%

0
10645.7
3

0%

6.89%

-9201.56

-5%

0%

Deferred tax Liabilities/


(assets)

5566.38

2.21%

4303.5

2%

Profit/(Loss) after tax

5079.35

2.02% -13505.06

-7%

Profit/(Loss) before tax


Tax expenses
a)Current Tax

9%
8%
19%

1074.2
48837.1
2

1%
39%

0
16286.9
1
48837.1
2

0%
-13%
-39%

Analysis of common size profit & loss


10

Out of total revenue of the company which is assumed to be 100% revenue from
operations form a major part in all three years i.e. 100%, 97% & 96% in 2012,
2013 & 2014 respectively.
Total expenses for the year 2014 has decreased by 9.23% which shows that the
company is making profits with reduced expenses.
Assuming sales 100% for the year in which production expenses has increased
to 61.93% since last year i.e. 56% 2013.
Employee Benefit expenses have also reduced comparing current years
17.29% which is less than the previous year i.e. 23% 2013.
Other expenses, Depreciation, finance cost also have reduced which shows
signs of profit with increased sales for the year 2014 compared to 2013 and
2012.
Deferred tax liability is a liability which may or may not be realized during any
given year, which makes the deferred status appropriate. So looking after the
Profit and loss for the year the company is making profit even after deducting
the deferred tax liability for the year which had a negative balance in the
previous year.

Common size statement (Balance sheet)


11

Balance Sheet of Jain


Studio

Rupees In '000

12

Mar '14

Particulars

Mar '13

Amou
nt

Perc
ent

Amou
nt

285946.
82
117929.
17

48.78%

254359.
82
98824.2
6

Perc
ent

Mar '12

Amou
nt

Perc
ent

Sources Of Funds
shareholders fund
Share capital
Reserves & Surplus
Money received against share
warrant
Share application money
pending allotment

20.12%
0.00%

0
0.00%
0

44.79%
17.40%

143859.
82
97298.3
2

39622.4

7%

17543.4

0.00%

75625

27.65%
18.70%
3%
14.54%

Non-Current Liabilities
0.00%
Long term Borrowings
other Long term liabilities
Long term Provision
Current Liabilities
Short term borrowings

0
2657.95
3631.13

0.45%
0.62%

36518.6
6
4287.67
4427.2

0.00%
19.73%

Other Current liabilities


Short term provisions

12.24
115668.
18
60349.3
4
0

0.00%

12.24
88869.0
8
40957.0
2
0

TOTAL

58619
4.84

100.00
%

56787
8.35

142420.
3
0
63600
73698.6
5

24.30%

151342.
71
0
63600
79265.0
3
47374.5
5
2645.3

Trade payables

10.30%

6%
0.76%
1%

0.00%

103551.
7
8941.82
3544.03

20%
1.72%
0.68%

0.03%

0.00%

154.92
38680.0
8
31095.2
7
0

100.00
%

52029
4.36

100.00
%

15.65%
7%

7.43%
6%
0.00%

Application of
Funds
Non-Current Assets
Fixed Assets
a)Tangible Assets
b)Intangible Assets
Noncurrent Investments
Deferred Tax Assets ( Net)
Long term loans and advances
Other non-current assets

47859.3

0.00%
10.85%
12.57%
8%

2645.3

0.45%

233685.
68
1287.76

39.86%

0.47%

159725.
24
0
63600
83568.5
3
47059.2
5
2645.3

33.38%

151269

0.71%

4159.3

26.65%
0.00%
11.20%
13.96%
8%

30.70%
0.00%
12.22%
16.06%
9%
0.51%

Current Assets
Trade receivables
Cash and cash equivalents

0.22%

189562.
5
4048.47

13

29.07%
0.80%

short term loan and advances


other current assets
TOTAL

15203.6
3
5794.21
58619
4.84

3%
1%
100%

25604.4
2
4435.37
56787
8.35

4.51%

4707.48

1%

3559.93
52029
4.36

100%

Analysis of Common Size Statement (Balance Sheet)


From the given Common Size statement it is observed that in all the three years
i.e. 2012, 2013, 2014 share capital has major contribution in sources of funds.
Reserves and surplus are also approximately 20% of the Sources of funds in all
three years.
Which indicates that co. has issued new shares over a period. Also Co. is less
dependent on borrowed fund in 2014 as compared to previous years i.e. 2012 &
2013.
Trade payables and other current liabilities has increased.
Company has made deferred Tax asset which means that Co. has paid excess tax
in advance and this amount can be used by the company when it carries over
loss but only when there is chance that the company's accounting income will
be positive in the next reporting period.
Out of application of funds co. invested in purchase of tangible asset. And it
is observed that amount of tangible asset is reduced from 159725.24 (000) to
142420.3(000) which indicates that company is providing depreciation on
timely basis.
In current assets trade receivable forms a major part in all three years of
application of funds and it indicates that company is not handling its debtors
properly as money is blocked which results in reduction of liquidity of the asset.
This also affects the cash and cash equivalents as it is observed that it is only
form approximately 1% of total sources of funds.

14

0.90%
1%
100%

Trend Analysis (Profit & Loss)


Standalone Profit &
Loss account

in Rs. '000
Mar '13

Mar '14

Particulars
Revenue From
Operations
Other Income
Total Revenue

Mar '12

Amoun
t

Incr/de
cr

Percen
t

Amoun
t

Incr/de
cr

Perce
nt

Amoun
t

Perce
nt

24204
1.4
9742.2
2
25178
3.6

63431.
49
4477.6
8
67909.
17

35.513
99
85.053
58
36.932
37

17860
9.9
5264.5
4
18387
4.4

54062.
8

12454
7

100

4940.9
59003.
7

43.40
76
1526.
67
47.25
19

323.64
12487
0.7

15457
5.8

51991.
45

50.681
65

10258
4.4

5596.8
7

5.770
71

96987.
49

0
43525.
15

0
1526.2
9
5950.7
5

0
3.6341
22
96.115
5

0
41998.
86

9645.5
9
32655.
9
19307
6

-46.25
9530.7
2
20442.
4

0
33.87
97
45.96
8
0.477
21
41.21
36
11.84
15

0
31370.
6

6191.2
5

0
10628.
3
5267.2
4

33561.
4

78.48
24

42762.
9

100

33561.
4

-100
78.48
24

1074.2
42762.
9

100

100

100
100

EXPENSES
Production Expenses
Decrease/(Increase)
in Stock
Employee Benefit
Expense
Finance Cost

240.5

Depreciation/Amortiz
ation

9665.4
7
33130.
92
24113
7.8

475.02
48061.
88

0.2061
05
1.4546
22
24.892
73

Profit/(Loss) before
exceptional Items
Exceptional Items
(Incomes)
Exceptional Items
(expenses)

10645.
73

19847.
29

215.69
5

9201.5
6

Profit/(Loss) before
tax
Tax expenses
a)Current Tax

10645.
73

19847.
29

0
215.69
5

0
9201.5
6

Other expenses
Total Expenses

19.88

1074.2

100
100
100

11458.
49

100

9691.8
4
23125.
18
17263
3.6

100
100
100

15

Deferred tax
Liabilities/(assets)

5566.3
8

1262.8
8

Profit/(Loss) after tax

5079.3
5

18584.
41

29.345
42
137.61
1

4303.5
13505.
1

3229.3
35332.
1

300.6
24
72.34
67

1074.2
48837.
1

100
100

Trend Analysis (Balance sheet)


Rupees In '000

Balance Sheet
of Jain Studio
Mar '14
Particulars

Mar '13

Amt

Inc/D
ec

285946.
82
117929.
17
0

31587

12.42
%
19.33
%
100.00
%

Mar '12

Amt

Inc/De
c

Amt

25435
9.8
98824.
26
39622.
4

110500

76.81
%
1.57%
125.8
5%

14385
9.8
97298.
32
17543.
4

100
%
100
%
100
%

-75625

75625

100
%

36518.
66

67033.
04
4654.1
5
883.17

64.73
%
52.05
%
24.92
%

10355
1.7

100
%

8941.8
2

100
%

3544.0
3

100
%

Sources Of
Funds
shareholders
fund
Share capital
Reserves & Surplus
Money received
against share
warrant
Share application
money pending
allotment
Non-Current
Liabilities
Long term
Borrowings

other Long term


liabilities

2657.95

Long term Provision

3631.13

19104
.91
39622
.4
0

36518
.66
1629.
72
796.0

100.00
%
38.01
%
17.98

4287.6
7
4427.2

1525.9
4
22079

16

7
Current
Liabilities
Short term
borrowings
Trade payables
Other Current
liabilities
Short term
provisions
TOTAL

12.24

0.00%

12.24

-142.68

115668.
18
60349.3
4
0

26799
.1
19392
.32
0

30.16
%
47.35
%
0.00%

88869.
08
40957.
02
0

50189
9861.7
5
0

586194
.84

1831
6.49

3.23%

56787
8.4

142420.
3

5.90%

15134
2.7

0.00%

100
%
100
%

92.10
%
129.7
5%
31.71
%

154.92

47583.
99

9.15%

52029
4.4

100
%
100
%
100
%
100
%

5.25%

15972
5.2

100
%

8382.5
3
0

0.00%

100
%
100
%
100
%

38680.
08
31095.
27
0

Application of
Funds
Non-Current Assets
Fixed Assets
a)Tangible Assets

b)Intangible Assets

8922.
41
0

Noncurrent
Investments
Deferred Tax Assets
( Net)

63600

0.00%

63600

0.00%

63600

73698.6
5

5566.
38
484.7
5
0

7.02%

79265.
03

-4303.5

5.15%

83568.
53

1.02%

47374.
55
2645.3

315.3

0.67%

0.00%

47059.
25
2645.3

100
%
100
%

233685.
68
1287.76

44123
.18
2760.
71

18956
2.5
4048.4
7

38293.
5
-110.83

25.31
%
2.66%

15126
9
4159.3

100
%
100
%

short term loan and


advances

15203.6
3

10400
.7

25604.
42

20896.
94

443.9
1%

4707.4
8

100
%

other current
assets
TOTAL

5794.21

1358.
84
1831
6.4

23.28
%
68.19
%
40.62
%
30.64
%
3.23%

4435.3
7
56787
8.4

875.44

24.59
%
9.15%

3559.9
3
52029
4.4

100
%
100
%

Long term loans


and advances
Other noncurrent
assets
Current Assets
Trade receivables
Cash and cash
equivalents

47859.3
2645.3

586194
.84

0.00%

47583.
99

17

Ratio Analysis of Jain Studio


Liquidity & Solvency Ratios (in 2:1)
Current Ratio

18

Current Ratio
4
3.5 3.61
3
2.5
2
1.5
1
0.5
0
2012

2.59
2.09

2013

2014

Current ratio of Jain Studio for financial year 2014 is 2.09 for financial year
2013 is 2.55 and for financial year 2012 is 3.61. Hence we can say, Jain studio
has a better financial position and in a position to pay off its Current liabilities.
Quick ratio:
Quick Ratio
3
2.5 2.59
2

1.98

1.5

1.68

1
0.5
0
2012

2013

2014

Quick ratio of Jain Studio for financial year 2014 is 1.68, for financial year
2013 is 1.98, and for financial year 2012 is 2.59. This ratio indicates solvency
position. From given trend it is seen that quick ratio is reducing but still it is
greater than the standard ratio so we can say that the Company is in good
solvency position.

Debt Equity Ratio:

19

Debt Equity Ratio


0.5
0.4

0.43

0.3
0.2
0.1

0.1

0
2012

2013

0
2014

Debt Equity ratio of Jain Studio for financial year 2014 is zero, for financial
year 2013 is 0.1, and for financial year 2012 is 0.43. It shows the in business
how much borrowed and owned fund is there. The lower the percentage, the
less leverage a company is using and the stronger its equity position. From this
we can say that Jain studio Ltd is not dependent on out siders fund.

Profitability ratios
Operating Profit Margin:
Operating Profit Margin Ratio
10
5

4.46

0
2012
-5

0.76
2013

2014

-10
-15
-20

-21.62

-25

The operating profit margin gives the business owner a lot of important
information about the firm's profitability, particularly with regard to cost
control. It shows how much cash is thrown off after most of the expenses are
met. A high operating profit margin means that the company has good cost
control and/or that sales are increasing faster than costs, which is the optimal
situation for the company. As it can be seen with Jain studios the operating
profit margin has gone up from 0.76 in March 13 to 4.46 in March 14. This
shows that the company has good cost control which has improved a great deal
from the previous year.
20

Profit Before Interest and Tax Margin (%):


Profit Before Interest And Tax Margin(%)
5
0
2012
-5

2013
-4.5

0.45
2014

-10
-15
-20
-25

-22.93

Profit before interest and tax(PBIT) or Earnings before interest and tax(EBIT)
Margin is the ratio of Earnings before Interest and Taxes to net revenue earned. It is a measure of a company's profitability on sales over a specific time
period. This indicator gives information on a company's earnings ability. The
EBIT of Jain studios has increased tremendously from -29.33% in March 12 to
0.45% in March14.This increase in EBIT is due to growth of net revenue, good
cost control and strong productivity.
Gross Profit Margin (%):
Gross profit Margin
5
0
2012
-5

2013
-4.63

0.47
2014

-10
-15
-20
-25
-30 -29.4
-35

Gross profit margin is a key measure of profitability by which investors and


analysis compare similar companies and companies to their overall industry.
The metric is an indication of the financial success and viability of a particular
product or service. The higher the percentage, the more the company retains on
each rupee of sales to service its other costs and obligations. The gross profit
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has increased from -29.40% in March12 to 0.47% in March14 thus giving


investors more assurance about the profitability of the company.

Cash Profit Margin (%):


Cash profit margin
10
5.85

5
0
2012
-5

2013
-2.09

2014

-10
-15

-17.44

-20

The Cash Flow Margin is a measure of how efficiently a company converts its
sales dollars to cash. Since expenses and purchases of assets are paid from cash,
this is an extremely useful and important profitability ratio. The cash profit
margin has grown from -17.44% in March12 to -2.09% in March13 to a
positive 5.85%.The higher the percentage, the more cash available from sales.

Net Profit Margin (%):


Net profit margin
5
0
2012
-5
-10

2013

0.01
2014

-7.34

-15
-20
-25 -26.06
-30

Net profit margin is the percentage of revenue remaining after all operating
expenses, interest, taxes and preferred stock dividends (but not common stock
dividends) have been deducted from a company's total revenue
22

Net profit margin is one of the most closely followed numbers in finance.
Shareholders look at net profit margin closely because it shows how good a
company is at converting revenue into profits available for shareholders. The
net profit margin has increased from -26.06% in March12 to 2.01% in
March14.
Adjusted Net Profit Margin (%)
Adjusted net profit margin is a financial ratio used by stockholders to determine
the true profitability of the stocks they own. Although the metric is not directly
used by small-business owners in their day-to-day operations, it can be very
useful to understand the considerations that your shareholders make when
determining whether to buy or sell stock in your company. To calculate the
adjusted net profit margin of a stock, you must first determine the price paid for
the stock, the profit margin of the underlying company and the price-to-sales
ratio of the stock. The trend of change in adjusted net profit margin has
remained the same as the net profit margin.

Return on Capital Employed (%):


Return on capital employed
4
2.69

2
0
2012
-2

-0.7
2013

2014

-4
-6
-8 -8.28
-10

ROCE is a useful metric for comparing profitability across companies based on


the amount of capital they use. The ROCE has improved drastically from
-8.28% in March12 to 2.69% in March14

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Return on Net worth (%):


Return on Net Worth
4
2
0
2012
-2
-4
-6
-8
-10
-12
-14 -13.49
-16

1.25
2013

2014

-3.82

The ROE is useful for comparing the profitability of a company to that of other
firms in the same industry. . It has improved from -13.49% in March12 to
1.25% in March14.
Return on Long Term Funds (%):
Return on Long term Funds
4

2.69

2
0
2012
-2

-0.77
2013

2014

-4
-6
-8
-10 -10.52
-12

The return is calculated as the annual percentage return based on the yields of
all the underlying securities in the portfolio, but is weighted to account for each
security's market value and maturity. The return is presented net of estimated
fees and the maximum offering price, but does not account for delays in income
distributions from the fund. This has increased from -10.52% in March12 to
2.69% in March14.

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Debtors turnover ratio:


Debtors turnover Ratio
1.2
1.05

1.14

0.8 0.81
0.6
0.4
0.2
0
2012

2013

2014

Debtor turnover ratio is the relationship between net sales and average debtors.
Higher debtor turnover ratio is good because it shows that the company is
collecting money quickly from our debtors, which is the case with Jain Studios
as it is seen that the ratio has improved from 0.81 in March12 to 1.14 in
March14.
Interest coverage ratio:
Interest Coverage Ratio
50

45.26

40
30
20
10
0
-3.17
2012
-10

-0.49
2013

2014

Interest coverage ratio is a ratio used to determine how easily a company can
pay interest on outstanding debt. The lower the ratio, the more the company is
burdened by debt expense. When a company's interest coverage ratio is 1.5 or
lower, its ability to meet interest expenses may be questionable. An interest
coverage ratio below 1 indicates the company is not generating sufficient
revenues to satisfy interest expenses. In case of Jain studio, they have a very
healthy Interest coverage ratio of 45.26 in March14 which shows that they are

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generating sufficient funds to pay the interest expenses. The ratio has improved
drastically from -3.17 in March12, -0.49 in March13 to 45.26 in March14.
Peer Analysis (Jain Studio, Mukta Arts, Pritesh Nandy)
Ratios

Jain Studio

Mukta
Arts

Pritesh Nandy

Liquidity & Solvency Ratio


Current Ratio

2.09

0.96

4.78

Quick ratio

1.68

1.47

2.89

0.39

Operating Profit Margin

4.46

1.46

9.26

Profit Before Interest And Tax Margin

0.45

-0.48

8.33

Gross Profit Margin

0.47

-0.49

8.77

Cash Profit Margin

5.85

1.7

11.57

Net Profit Margin

2.01

-0.51

11.11

-0.51

11.11

Debt Equity Ratio

Profitability ratios

Adjusted Net Profit Margin

2.01

Return On Capital Employed

2.69

2.61

6.33

Return On Net Worth

1.25

-1.27

5.3

Return on Long Term Funds

2.69

3.21

6.33

Debtors turnover ratio

1.14

7.25

47.7

Interest coverage ratio

45.26

0.7

14

Current Ratio
Current ratios of Jain Studio, Mukta Arts and Pritesh Nandy for financial year
2014 are 2.09, 0.96 & 4.78 respectively. Hence we can say, Jain studio has a
better financial position and in a position to pay off its Current liabilities as
compared to Mukta arts whereas Pritesh Nandy has better current ratio which is
4.78% i.e. 2.78% more than ideal Current ratio.
Quick ratio
Quick ratio indicates solvency position of the company. Quick ratios of Jain
Studio, Mukta Arts and Pritesh Nandy for financial year 2014 are 1.68, 1.47 &
2.89 respectively. Hence we can say, Jain studio is in good solvency position as
compared to Mukta arts but Pritesh Nandy is in better condition. This indicates
Pritesh Nandy has better short term liquidity position than other two
competitors.

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Debt Equity Ratio


Debt Equity ratios of Jain Studio, Mukta Arts & Pritesh Nandy for financial
year 2014 are 0, 0.39 & o respectively. Hence we can conclude that Jain studio
& Pritesh Nandy are not dependent on out siders fund whereas Mukta Arts is
still borrowing from outsiders.

Profitability ratios
Operating Profit Margin
Operating profit margin of Jain Studio, Mukta Arts & Pritesh Nandy for
financial year 2014 are 4.46, 1.46 & 9.26 respectively. Hence we can say, Jain
studio has good cost control and their sales are increasing faster than costs as
compared to Mukta Arts but Pritesh Nandy has better cost control than other
two competitors with 9.26%.
Profit before Interest and Tax Margin
We can conclude that profitability on sales over a specific time period of Jain
studio (0.45) is better than Mukta Arts (-0.48) but Pritesh Nandy has highest
profitability (8.33). As we can say that Pritesh Nandy has better earnings ability
as compared to Jain Studio and Mukta Arts.
Gross Profit Margin
Gross profit margins of Jain Studio, Mukta Arts & Pritesh Nandy for financial
year 2014 are 0.47, -0.49 & 8.77 respectively. Hence we can say that as Pritesh
Nandy has highest gross profit margin among three competitors so they are
financially successful & highly profitable company than Jain Studio and Pritesh
Nandy.
Net Profit Margin
Net profit margins of Jain Studio, Mukta Arts & Pritesh Nandy for financial
year 2014 are 2.01, -0.51 & 11.11 respectively. Hence we can say Pritesh Nandy
has highest revenue after deducting all operating expenses, interest, taxes and
preferred stock dividends. Jain studio has positive margin whereas Mukta Arts
has negative margin which indicates their expenses are more than their revenue.
Return on Capital Employed
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ROCE of Jain Studio, Mukta Arts & Pritesh Nandy for financial year 2014 are
2.69, 2.61 & 6.33 respectively which indicates that Pritesh Nandy is the most
profitable company based on the amount of capital they use among the 3
competitors.
Return on Net Worth
Pritesh Nandy generates highest profit with the money that the equity
shareholders have invested as it has higher return on net worth (5.3) as
compared to Jain studio (1.25) & Mukta Arts (-1.27).
Return on Long Term Funds
Pritesh Nandy has highest return on long term funds (6.33) among the 3
competitors. Mukta Arts (3.21) has better returns on long term funds than Jain
studio (2.69).
Debtors turnover ratio
Debtors turnover ratios of Jain Studio, Mukta Arts & Pritesh Nandy for
financial year 2014 are 1.14, 7.25 & 47.7 respectively. Hence we can say that,
Pritesh Nandy is collecting money quickly from the debtors whereas Jain Studio
fails to collect money quickly from the debtors.
Interest coverage ratio
Interest coverage ratios of Jain Studio, Mukta Arts & Pritesh Nandy for
financial year 2014 are 45.26, 0.7 & 14 respectively. Hence we can say that
Mukta Arts is burdened by debt expenses whereas Jain studio with highest
Interest coverage ratio is generating sufficient revenues to satisfy interest
expenses.

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