Group Number 6 Dheeraj Chaubey Mohit Shukla Mrigankshi Venkat

Introduction
Owned by Dr. Vijay Mallya of United Beverages Group. Started its operations on May 9, 2005, a flight from Mumbai to Delhi. Kingfisher the largest carrier in the shrinking domestic Indian market December 2009, Kingfisher Airlines had the second largest share in India's domestic air travel market. Passenger growth increased 61.1% year-on-year in Mar-2009

Rise Of The King

First airline in India to operate with all new aircrafts. First airline in the country to order the Airbus A380. Offers several unique services to its customers. First Indian airline to have inflight entertainment (IFE) systems on every seat even on domestic flights. Alliance was formed with Dish TV to provide live TV in-flight.

Achievements
Kingfisher Red, Kingfisher Airline's low-cost class on domestic routes. Kingfisher Airlines has received three global awards at the Skytrax World Airline Awards 2010 Brand Leadership Award. India's only 5 Star airline, rated by Skytrax and 6th airline in the world

Start of the crisis

Ever since the airline commenced operations in 2005, it has been reporting losses. In 2008, more losses due to economic downturn. After acquiring Air Deccan, Kingfisher suffered a loss of over 1,000 crore for three consecutive years. By early 2012, the airline accumulated losses of over Rs 7,000 crore

Contd.
By Feb 2012, Kingfisher has been declared NPA by following banks SBI Bank of Baroda PNB IDBI Central bank BOI Corporation Bank Loss> US$1.50 billion

Total Dues
Staff strength of 6,000 Delayed 60% of its employees and that by 31st Jan 12

salary
Hindustan Petroleum Corporation Limited (HPCL) stopped the fuel for 2 hours Bharat Petroleum Corporation in 2009 had filed a case for dues over Rs245 crore

Fuel Dues

Aircraft lease rental dues

Returned the A320 aircraft to GECAS due to non payment of dues. In Jul 2010, DVB Aviation Finance Asia Ltd (a lessor from Singapore), sued Kingfisher Airlines for lease rental default

In Sep 2011, the Chairman & Managing Director of Kingfisher Airlines said The Company has incurred substantial losses and its net worth has been eroded Erosion of
net worth

Current Ratio
A liquidity ratio that measures a company's ability to pay short-term obligations. The higher the current ratio, the more capable the company is of paying its obligations.

CR = Current Assets / Current Liabilities.

Current Asset :- All assets that are expected to be converted into cash within one year Current assets include cash, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash. Current Liabilities:- A company's debts or obligations that are due within one year. Current liabilities include short term debt, accounts payable, accrued liabilities and other debts.

Current Ratio
Year Total Current Assets Current Liabilities Current Ratio 2011 3,105.10 4,104.74 0.76 2010 2,637.17 3,501.37 0.75 2009 2,199.69 3,494.68 0.63 2008 659.59 667.08 0.99 2007 1,090.06 486.55 2.24

(Rs in Crs)

Current Ratio
2.5 2 1.5 1 0.5 0 2007 2008 2009 2010 2011

Current Ratio

Quick Ratio
An indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. The higher the quick ratio, the better the position of the company

QR= Liquid Assets/ Current Liabilities..

[Liquid Assets = Current Assets (Inventories + prepaid expenses)]

Liquid Asset:- Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.

Quick Ratio
Year Total Current Assets Inventories Current Liabilities Quick Ratios 2011 3,105.10 193.08 4,104.74 0.70943 2010 2,637.17 171.32 3,501.37 0.7042529 2009 2,199.69 147.25 3,494.68 0.5873 2008 659.59 48.64 667.08 0.9159 2007 1,090.06 61.62 486.55 2.11374

(Rs in Crs)

Quick Ratio
2.5 2 1.5 1 0.5 0 2007 2008 2009 2010 2011 Quick Ratio

Gross Profit Ratio

Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the relationship between gross profit and sales.

Gross Profit Ratio = (Gross profit / Net sales) 100

Net sales means that sales minus sales returns. Gross profit would be the difference between net sales and cost of goods sold

Gross Profit Ratio

Year Gross Profit Net Sales Mar '11 140.27 6,233.38 Mar '10 -696.25 5,067.92 Mar '09 -1,088.24 5,269.17 Mar '08 -638.4 1,456.28

Gross Profit Ratio

2.25%

-13.73%

-20.65%

-43.83%

Gross Profit Ratio

10.00% 0.00% -10.00% -20.00% -30.00% -40.00% -50.00%
2008 2009 2010 2011

Gross Profit Ratio

DEBT-EQUITY RATIO

DEBT-EQUITY RATIO
YEAR 2011 2010 2009 2008 2007

TOTAL DEBT
YEAR TOTAL EQUITY YEAR/ RATIO D/B RATIO

7057.08
2011 -2951.20 2011 -2.39 (0.00)

7922.60
2010 -3870.47 2010 -2.04 (0.00)

5665.56
2009 -2125.35 2009 2.66 ( 0.00)

934.38
2008 188.78 2008 4.94

916.71
2007 373.68 2007 2.45

D/B Ratio
6 4 2

(Rupees in crores)

D/B Ratio

0 2007 -2 -4 2008 2009 2010 2011

FIXED ASSET TURNOVER RATIO

FIXED ASSET TURNOVER RATIO

YEAR F.S RATIO 2011 2.90 2010 2.57 2009 4.73 2008 5.80 2007 5.52 (Rupees in crores)
Fixed Asset Turn Over Ratio
7 6 5 4 3 2 1 0 2007 2008 2009 2010 2011 Fixed Asset Turn Over Ratio

NET WORKING CAPTIAL

It is the difference of Current Assets and Current Liabilities. NWC = Current Assets Current Liabilities Net Working Capital is a measurement of the operating liquidity available for a company to use in developing and growing its business. If NWC is high, it indicates that an entity has a working capital deficiency, If NWC is low, it indicates that an entity has a working capital deficit.

NET WORKING CAPTIAL

YEAR C.A YEAR C. L 2011 3105.10 2011 4172.28 2010 2637.17 2010 3554.57 2009 2199.69 2009 3540.23 2008 659.59 2008 676.60 2007 1090.06 2007 493.49

YEAR/ RATIO NWC

2011 -1067.18

2010 -917.4

2009 -1340.54

2008 -17.01

2007 596.57

Net Working Capital Ratio

1000 500 0

(Rupees in crores)

2007
-500 -1000 -1500

2008

2009

2010

2011

Net Working Capital Ratio

EARNINGS PER SHARE

Earnings per share serves as indicator of a company's profitability. EPS= Net profit available to equity-holders Number of ordinary shares outstanding

Earnings per share is generally considered to be the single most important variable in determining a share's price.

EARNINGS PER SHARE

YEAR EPS 2011 -20.64 2010 -61.95 2009 -60.50 2008 -13.85 2007 -30.97 (Rupees in crores) EPS
0 -10 -20 -30 -40 -50 -60 -70
EPS

2007

2008

2009

2010

2011

FINANCIAL LEVERAGE
The degree to which an investor or business is utilizing borrowed money.
FINANCIAL LEVERAGE= TOTAL ASSETS OWNERS EQUITY.

Financial leverage is a way for achieving bigger results with relatively small amount of capital/financial resources. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future.

FINANCIAL LEVERAGE
YEAR F.L 2011 -1.39 2010 -1.04 2009 -1.66 2008 5.94 2007 3.45 (Rupees in crores) FINANCIAL LEVERAGE
8

6
4 2 0 -2 -4
FINANCIAL LEVERAGE 2007 3.45 2008 5.94 2009 -1.66 2010 -1.04 2011 -1.39

Equity Ratio
The equity ratio is a financial ratio indicating the relative proportion of equity used to finance a company's assets. Equity Ratio=(Total Shareholders Equity)/(Total Assets) A high ER would expose creditors to a higher risk. ER should neither be very high nor very low.

Equity Ratio
2011
-2951.20

2010
-3870.47

2009
-2125.35

2008
188.78

2007
373.68

4105.88
-0.71877

4052.13
-0.955169

3540.21
-0.600345

1123.16
0.168079

1290.39
0.289586

Equity Ratio
0.4 0.2 0 -0.2 -0.4 -0.6 -0.8 -1 -1.2

2007

2007

2008

2008 2009

2009 2010

2010 29112011

Equity Ratio

DEBT TO TOTAL CAPITAL RATIO :

The ratio measures a company's capital structure , financial solvency , and degree of leverage, at a particular point in time. Debt To Total Capital Ratio=Total Debt/Total Assets Debt: Is an obligation owed by one party (the debtor) to a second party

DEBT TO TOTAL CAPITAL RATIO :

2011 7057.08 4105.88 2010 7922.60 4052.13 2009 5665.56 3540.21 2008 934.38 1123.16 2007 916.71 1290.39

1.7187

1.9551

1.6003

0.8319

0.71041 (Rupees in crores)

Debt To Total Capital Ratio

2.5 2 1.5 1 0.5 0 2007 2008 2009 2010 2011

Debt To Total Capital Ratio

Inventory Turnover Ratio

It is a measure of the number of times inventory is sold or used in a time period such as a year. Inventory Turnover Ratio :(Cost of goods sold) / (Average Inventory). Cost of goods sold = (Sales) (Gross Profit). Cost of goods sold (COGS) refer to the inventory costs of those goods a business has sold during a particular period. Average Inventory = (Opening Stock + Closing Stock) / 2. Inventory : describes the goods and materials that a business holds for the ultimate purpose of resale. Indicates how fast inventory is sold. High ITR indicates higher liquidity.

Inventory Turnover Ratio

2011
5289.34 182.2

2010
4747.92 159.285

2009
5822.37 97.945

2008
1781.46 55.13

2007
2062.61 -

29.03040615

29.80770317

59.44530093

32.31380374

Inventory turnover ratio

70

60
50 40 30 20 10 0 2007 2008 2009 2010 2012

Inventory turnover

RETURN ON CAPITAL EMPLOYED

A ratio that indicates the efficiency and profitability of a company's capital investments.
ROCE = EBIT-OTHER INCOME AVRAGE LONGTERM ASSET USED + NWC

ROCE should always be higher than the rate at which the company borrows, otherwise any increase in borrowing will reduce shareholders' earnings.

RETURN ON CAPITAL EMPLOYED

RATIO/ YR ROCE 2011 0 2010 0 2009 0 2008 0 2007 0

INTEREST COVERAGE RATIO

A ratio used to determine how easily a company can pay interest on outstanding debt.
INTEREST COVERAGE RATIO = EBIT INTEREST

The lower the ratio, the more the company is burdened by debt expense. An interest coverage ratio below 1 indicates the company is not generating sufficient revenues to satisfy interest expenses.

INTEREST COVERAGE RATIO

RATIO/ YR ICR 2011 -0.16 2010 -0.87 2009 -1.77 2008 -7.76 2007 -10.29

ICR
0 -2 -4 -6 -8 -10 -12
ICR

2007

2008

2009

2010

2011

CORPORATE GOVERNANCE
Act ethically, deli gently, openly, honestly in good faith with integrity. Act in a good faith responsibility and due fair. Dedicate best effort for welfare of the customer. Conduct our self in a professional, courtesy and respectful manner.

CORPORATE GOVERNANCE
Uphold legal standard vigoursly. Act for the welfare investor and stake holder. Involve in the best interest of company and the stakeholder.

Maintain the confidentiality of all material non-public information about the company its business and affairs.

Saving The Ship

All 18 lenders agreeing to cut interest rates and convert part of loans to equity. Lenders have converted Rs.650 crore debt into preference shares which will be converted into equity when the airline lists on the Luxembourg Stock Exchange by selling GDRs. Besides the Rs.1,400 crore debt which will be converted into preference shares. Kingfisher Airlines has pledged its brand as collateral with its lender consortium for Rs.4,100 crore.

Result
# 1 2 3 4 5 6 7 Total From Apr-05 Jul-06 Jul-07 Apr-08 Apr-09 Apr-10 Apr-11 To Jun-06 Jun-07 Mar-08 Mar-09 Mar-10 Mar-11 Sep-11 Months 15 12 9 12 12 12 6 78 Total Income 1,352 2,142 1,546 5,577 5,271 6,496 3,410 25,793 Cost 1,689 2,562 1,734 7,186 6,918 7,523 4,142 31,754 Net Profit -337 -420 -188 -1,609 -1,647 -1,027 -732 EPS -68 -42 -11 -55 -54 -16 n/a

-5,960

Thank You