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Management Statement Top management say how the business is performing

Mng Discussion & Analysis Economy, Macro trends will be discussed

Financial Reports
Revenue 100
Excise Duty -10
Net sales 90

Expense Item
Purchase stock in trade 10
Change in inventory, Finished goods -15
Employee benefit 10
Finanical cost 10
Other expense 10
Expectional/Extraordinary Expense 10
Total Expense 35
Profit Before Tax 55
Current Tax 5
Deferred Tax -1
Total Tax 4
Net PAT 51
Units * Price
company would pay to the government

Raw Material
Last year no of change in inventory, Finished goods
Negative no indicates it manufactured more that the demand

Intrest paid to the bank

The company doesn’t anticipated this. Rarely it happens

Total Revenue - Total operating expense

Total Operating Revenue Sale of products + Sale of services + Other operating revenues
Owners Equity Share capital =
Share capital 100
Reserves & Surplus 200

Non Current Liabilities

long term borrowing 200
‘Deferred Tax Liability 100 Have cash to meet future tax obligation
May be bcz of accelerated depriciation
Current Liabilities
Short term borrowing 100
Trade payable/Acc Payable 100
Short term provision 20 For employees
Non current asset
PPE 100
capital Work in progress 100
Long term loan 20

Current Assets
Inventory 300
Acc receivable 100
Marketable securities 200
Face Value* No of shares Reserve & Surplus
Capital Reserve earmarked for long term projects
Belongs to shareholders but cant be distribu
Securities premium reserve / account premium over and above the face/par value
General reserve accumulated profits of the company which i

Sales from Revenue Acc Receivable, Cash

Operating expense Invennotry & Trade balance
Dep & Amor Acc Depriciation
Other income Investment
Finance cost Long term loan
PAT Shareholders equity
term projects
ders but cant be distributed to them
bove the face/par value of the shares sits
of the company which is not yet distributed to the shareholder
Operational activities (OA) sales, marketing, manufacturing, technology upgrade, resource hiring etc
Investing activities (IA) interest bearing instruments, investing in equity shares, investing in land, property, pl
Financing activities (FA) distributing dividends, paying interest to service debt, raising fresh debt, issuing corp
de, resource hiring etc
res, investing in land, property, plant and equipment, intangibles and other non current assets etc
bt, raising fresh debt, issuing corporate bonds etc
Profitability ratios
Leverage ratios
Valuation ratios
Operating Ratios efficiency atwhich a business can convert its assets (both current and noncurrent) into revenues.

Profitability ratios Revenues – Operating Expense]

EBITDA = [Operating

Operating Revenues = [Total Revenue – Other Income]

Operating Expense = [Total Expense – Finance Cost – Depreciation & Amortization]

PAT Margin = [PAT/Total Revenues

Return on Equity (RoE)

By simply increasing the debt ROE can be boosted . To avoid DuPoint Model can be use

ROE={Net Profit/Net sales}*{Net sales/Avg Total Asset}*{Avg Total Asset/Shareholders equity}

Net Profit Margin = Net Profits/ Net Sales*100

Asset Turnover
Financial = Net
Leverage Sales / Average
= Average Total/asset
Total Assets Shareholders Equity

RoA = [Net income + interest*(1-tax rate)] / Total Average Assets

ROCE = [Profit before Interest & Taxes / Overall Capital Employed]

Overall Capital Employed = Short term Debt + Long term Debt + Equity
ncurrent) into revenues.