Professional Documents
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MARKET ANALYSIS
SWOT Analysis of ABC Electricals:
STRENGTH:
The borrower is well
known in this field. The
unit enjoys good
WEAKNESS:
Nil
reputation.
OPPORTUNITY:
The unit does
specialized items. Good
opportunity.
THREAT:
No real threat as they
are supplying to various
companies in various
fields.
2. TECHNICAL ANALYSIS
Machinery valued at Rs.8.00 Lacs and at Rs.25.00 Lacs. Machinery were imported
from Germany and it all contained new technology in the industry.
3. FINANCIAL ANALYSIS
a. Cost of Project & Means of Financing
Each year the mean of financing is stable by the major way of bringing capital by
promoters and the way of Term Loan.
b. Profitability Statements:
Year Ending
31.03.2012
31.03.2013
31.03.2014
31.03.2015
31.03.2016
Audit Status
Audited
Audited
Audited
Audited
Projected
Sales
292.40
438.35
225.19
275.00
600.00
Labour Charges
6.34
5.10
1.13
2.00
5.00
Total Sales
298.74
443.45
226.32
277.00
605.00
Purchases
273.05
414.75
169.00
230.00
490.00
1.24
6.45
0.53
1.00
1.50
10.66
19.23
13.39
14.73
29.00
Electricity Charges
0.63
2.40
2.83
3.11
6.00
Machinery Maintenance
0.69
0.22
0.88
1.00
3.00
Factory Maintenance
0.76
0.09
Sub - Total
287.03
443.14
186.63
249.84
529.50
21.96
36.91
80.28
91.56
120.00
Sub - Total
308.99
480.05
266.91
341.40
649.50
36.91
80.28
91.56
120.00
120.00
Cost of Sales
272.08
399.77
175.35
221.40
529.50
4.79
4.99
5.34
5.87
6.17
Telephone Expenses
1.01
1.11
0.55
0.58
0.61
Travelling &
0.60
0.68
0.99
1.04
1.09
Conveyance
Vehicle Maintenance
0.43
0.76
1.72
1.81
1.90
Sub Total
6.83
7.54
8.60
9.30
9.76
19.83
36.14
42.37
46.30
65.74
Bank Charges
0.30
1.28
0.61
0.64
0.67
8.73
9.46
8.50
6.00
8.40
2.86
10.11
14.52
16.80
8.40
Interest Others
0.19
0.56
0.49
0.40
0.25
Depreciation
1.19
12.59
12.47
10.60
11.26
Sub - Total
4.54
33.27
37.55
36.94
34.98
15.29
2.87
4.82
9.36
30.76
15.29
2.87
4.82
9.36
30.76
1.00
6.75
15.29
2.87
4.82
8.36
24.01
Year Ending
31.03.2012
31.03.2013
31.03.2014
31.03.2015
31.03.2016
2.5
4.5
3.2
3.8
3.46
d. Funds-Flow Statement
31.03.12
31.03.13
31.03.14
31.03.15
31.03.16
31.03.17
Audit status
Audited
Audited
Audited
Audited
Projected
Projected
Net Profit
15.29
2.87
4.82
8.36
24.01
29.74
Depreciation
1.19
12.59
12.47
10.60
11.26
11.07
15.00
35.31
-2.94
-4.59
-7.14
-8.00
-9.00
15.16
-0.81
-1.33
-1.50
-2.00
-3.00
19.98
71.81
14.92
-62.91
7.50
10.00
60.00
-7.50
-10.00
-2.32
13.33
-9.58
-1.56
-2.25
-0.81
59.87
21.00
-41.12
-3.99
7.42
9.49
8.76
-4.76
-3.37
0.16
0.18
0.20
8.08
-8.08
161.32
105.01
-27.78
17.02
30.61
37.68
72.99
32.78
15.00
10.00
71.43
14.77
-28.98
-14.93
11.11
16.18
14.95
43.37
11.28
28.44
5.00
Sources
Introduction of
Capital
Increase in Term
Loan 1
Increase in Term
Loan 2
Inc. in W.C Loan
Increase in Term
Loan Misc Cash
Credit
Increase in Other
Loans
Increase in Creditors
Increase in Cr
Expenses
Increase in Cr
Capital Goods
Total
Application
Increase in Fixed
Assets
Increase in Sundry
Debtors
Increase in Stock of
Materials
31.03.12
31.03.13
31.03.14
31.03.15
31.03.16
31.03.17
Audit status
Audited
Audited
Audited
Audited
Projected
Projected
Capital Account
37.88
37.05
39.09
59.45
79.46
103.19
0.87
4.86
4.06
2.81
0.81
Term Loan 1
60.67
57.73
53.14
46.00
38.00
29.00
Term Loan 2
15.16
14.35
13.02
11.52
9.52
6.52
60.00
52.50
42.50
W.C Loan
36.18
107.99
122.91
60.00
67.50
77.50
Other Loans
9.34
0.56
0.25
Creditors Trade
67.23
88.23
47.11
43.13
50.54
60.03
Creditors Expense
11.90
7.14
3.77
3.93
4.10
4.30
8.08
237.97
326.69
283.66
287.08
302.43
323.04
Liabilities
Creditors Capital
Goods
Total
Assets
Gross Block of
19.50
150.85
138.26
125.79
130.19
128.93
Depreciation
1.19
12.59
12.47
10.60
11.26
11.07
Net Block
18.31
138.26
125.79
115.19
118.93
117.86
99.76
Stock of Materials
36.91
80.28
91.56
120.00
120.00
125.00
Bills Receivables
79.53
94.30
65.32
50.39
61.50
77.68
0.58
0.30
0.10
0.50
1.00
1.50
2.88
13.55
0.89
1.00
1.00
1.00
Total
237.97
326.69
283.66
287.08
302.43
323.04
Fixed Assets
Capital Work in
Progress
f. Financial Ratios
LIQUIDITY RATIOS
1. Current Ratio:
Current Assets
2011-2012
117.02
123.39
0.95
2012-2013
174.88
203.36
0.86
2013-2014
156.98
173.79
0.90
2014-2015
170.89
107.05
1.60
2015-2016
182.50
122.14
1.49
Current Ratio
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2012
Current
Year
2013
2014
2015
2016
Liabilities
Current Ratio
Inference:
The ratio was high during the period 2014-2015 and it was low during the period 2012-2013
which is shown in above table and figure. The ratio was satisfactory during the year 2014-2015.
2. Quick Ratio:
Quick Assets
2011-2012
80.11
123.39
0.65
2012- 2013
94.60
203.36
0.47
2013- 2014
65.42
173.79
0.38
2014-2015
50.89
107.05
0.48
2015-2016
62.50
122.14
0.51
Quick Ratio
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2012
Current
Year
2013
2014
2015
2016
Liabilities
Quick Ratio
Inference:
The quick ratio was high during the period of 2011-2012 and it was satisfactory during 20072008 and it started to decrease from 2011-2012 period and again it is increased from 2013-2014
and it is maintained in same position till 2015-2016 projected financial year.
3. Debt-Equity Ratio:
Total Shareholders
Capital Structure
Equity
Ratio
76.70
37.88
2.02
2012-2013
86.28
37.05
1.81
2013-2014
70.78
39.09
1.81
2014-2015
120.58
59.45
2.03
2015-2016
100.83
79.46
1.27
Year
Total Liabilities
2011-2012
Debt-Equity Ratio
10
9
8
7
6
5
4
3
2
1
0
2012
2013
2014
2015
2016
Inference:
The firm should have a minimum of 50% margin of safety in meeting the long term financial
commitments. The ratio was maintained in the same position from 2008-2012. There was
fluctuation, so it is not good for the company.
4. Proprietary Ratio:
Total Share
Holders equity
Total Assets
2011-2012
37.88
237.97
15.92%
2012-2013
37.05
326.69
11.34%
2013-2014
39.09
283.60
13.78%
2014-2015
59.45
287.08
20.71%
2015-2016
79.46
302.43
26.27%
Proprietary Ratio
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2012
Proprietary
Year
2013
2014
2015
2016
2017
Ratio
Inference:
The ratio was high during the projected period of 2016-2017 and it started to decrease from
2008-2012. It shows an increasing trend from the period of 2012-2013, so the company has to
maintain this growth.
Net Sales
Fixed Assets
2011-2012
298.74
18.31
16.32
2012-2013
443.45
138.26
3.21
2013-2014
226.32
125.79
1.8
2014-2015
277
115.19
2.40
2015-2016
605
118.93
5.09
2012
Fixed Assets
Year
2013
2014
2015
2016
Ratio
Inference:
This ratio denotes a tremendous peak in the period of 2011-2012. And it started to decline from
the period 2012-2013.The ratio was low during the period 2013-2014 and it start to increase from
2014-2015 then it shows a fluctuating trend.
Year
Income
Assets
15.29
237.97
6.43
2012-2013
2.87
282.33
1.02%
2013-2014
4.82
305.18
1.58%
2014-2015
8.36
285.37
2.93%
2015-2016
24.01
294.76
8.15%
Return On
2011-2012
2013
2014
2015
2016
Inference:
The ratio shows an increasing trend from 2013-2014 and it was high on the period of 2011-2012.
The ratio shows that the firm earned better profit during the period 2013-2015. It shows the good
position of the firm.
EBIT
Capital Employed
ROCE
2011-2012
19.83
114.58
17.31%
2012-2013
36.14
123.33
29.30%
2013-2014
42.37
109.87
38.50%
2014-2015
46.30
180.03
25.72%
2015-2016
65.74
180.29
36.46%
ROCE
45
40
35
30
25
20
15
10
5
0
2012
Inference:
2013
2014
2015
2016
The ratio shows the increasing trend during the period 2011- 2014 and it shows the decreasing
trend during from the period of 2014-2015 and then it has been showing increasing trend from
the projected periods of 2015-2017. So the firm has to utilize the long term funds properly to
earn more profits if the projected years should show above exact trend.
EBIT
Interest Expenses
2011-2012
19.83
3.05
6.50
2012-2013
36.14
19.4
1.86
2013-2014
42.37
24.47
1.73
2014-2015
46.30
25.7
1.8
2015-2016
65.74
23.05
2.85
2012
Interest
Year
2013
2014
2015
2016
Coverage Ratio
Inference:
This ratio was peak at the period of 2011-2012 and went down in following period of 2012-2013.
The ratio shows decreasing trend from 2012-2014. The ratio shows an increasing trend from
2013-2014 till the period of 2016-2017. It shows a fluctuating trend.
PROFITABILITY RATIOS
9. Gross Profit Ratio:
Gross Profit
Net Sales
2011-2012
26.66
298.74
8.92%
2012-2013
38.58
443.45
8.7%
2013-2014
49.84
226.32
22.02%
2014-2015
53.6
277
19.35%
2015-2016
70.5
605
11.65%
2012
Gross Profit
Year
2013
2014
2015
2016
Ratio
Inference:
The ratio was low during the period 2011-2013. The ratio was high during the period 2013-2014
and the ratio was better during this period. Again the ratio start to decrease from 2014-2015 it
shows in decreasing trend and the firm earns less profit.
Net Profit
Net Sales
2011-2012
15.29
298.74
5.12%
2012-2013
2.87
443.45
0.65%
2013-2014
4.82
226.32
2.13%
2014-2015
8.36
277
3.02%
2015-2016
24.01
605
3.97%
2012
2013
2014
2015
2016
Inference:
The ratio was high during the period 2011-2012 and it decreased during 2012-2013 and it again
increased during the period 2013-2014 and from that period it was in an increasing trend. It
shows a fluctuating trend.
Operating Profit
Net Sales
2011-2012
19.83
298.74
6.64%
2012-2013
36.14
443.45
8.15%
2013-2014
42.37
226.32
18.72%
2014-2015
46.30
277
16.71%
2015-2016
65.74
605
10.87%
2012
Operating Profit
Year
2013
2014
2015
2016
Ratio
Inference:
The ratio was high during the period 2013-2014 and it was low during the projected period 20162017. The ratio shows increasing trend from the year 2011-2012 then again it shows a decreasing
trend so it is good for the company.
Stock Turnover
Inventory
Ratio
272.08
29.4
9.25
2012-2013
399.77
58.6
6.82
2013-2014
175.35
58.92
2.04
2014-2015
221.40
105.78
2.09
2015-2016
529.50
120
4.41
Year
COGS
2011-2012
2012
2013
2014
2015
2016
Inference:
The ratio was high during the period 2011-2012 and it was low during the period 2012-2013 and
again it decreases during 2013-2014 then again it increase during 2014-2015 and then it shows
an increasing trend, so this increasing trend has to be stable for getting better position.
Average Debtors
2011-2012
74.69
80
0.93
2012-2013
110.86
86.92
1.28
2013-2014
56.58
79.81
0.71
2014-2015
69.25
57.86
1.2
2015-2016
151.25
55.95
2.7
2012
Debts Turnover
Year
2013
2014
2015
2016
Ratio
Inference:
The ratio was low during the period 2013-2014 and it was high during the period 2015-2016.
The ratio during projected period 2015-2016 was satisfactory. And this ratio fluctuating trend in
the company.
Year
Purchases
Ratio
68.26
87.21
0.78
2012-2013
103.69
95.29
1.14
2013-2014
42.25
73.13
0.58
2014-2015
57.5
48.97
1.17
2015-2016
122.5
50.85
2.41
2012
Credits Turnover
2011-2012
Average Creditors
2013
2014
2015
2016
Inference:
The ratio was low during the period 2011-2012 and it started to increase during the period 20122013 and it was decreased during the period 2013-2014 then again it increased during 20142015. After that it shows an increasing trend. It shows a fluctuating trend and the ratio was
satisfactory during the year 2013-2014.
Gross monthly
Paid
income
2011-2012
0.25
2.22
11.26%
2012-2013
1.61
3.64
44.23%
2013-2014
2.04
4.25
48%
2014-2015
2.14
4.63
46.22%
2015-2016
1.92
6.29
30.52%
Year
2012
2013
2014
2015
2016
FOIR
Inference:
The percentage of such ratio should be under the amount of 50%. So that the balance income can
be manage to control the other expenses in a company.
The Fixed Obligation Income Ratio in this company shows a fluctuating trend and it also
restricted inside of 50%. In the period of 2013-2014 it was in peak. After that it shows a
decreasing trend. And this should be maintained.
Year
Loan Installment
2015-2016
0.70
6.29
11.13%
2016-2017
0.61
6.86
8.89%
Income
IIR
2016
2017
Inference:
The Installment to Income Ratio (IIR) restricts the equated monthly installment to 40% of the
income. So the balance amount can be spend on day to day expenses.
In credit appraisal process the Installment to Income Ratio is concentrated on projected years
rather than the audited years. And in this case, in the periods of 2015-2017 the Installment to
Income Ratio is restricted inside 40% and showing a decreasing trend which is good.
31.03.12
31.03.13
31.03.14
31.03.15
31.03.16
Net Profit
15.29
2.87
4.82
8.36
24.01
Depreciation
1.19
12.59
12.47
10.60
11.26
8.73
9.46
8.50
14.40
16.48
24.19
26.75
27.46
49.67
20.15
3.75
5.92
8.64
10.00
7.50
8.73
9.46
8.50
14.40
Sub Total
20.15
12.48
15.38
17.14
31.90
DSCR
0.82
1.94
1.74
1.60
1.56
Interest on Term
Loan
Sub Total
Repayment of Term
Loan
Repayment of Term
Loan Misc. Cash
Credit
Interest on Term
Loan
1.5
0.5
2012
Inference:
2013
2014
2015
2016
31.03.12
31.03.13
31.03.14
31.03.15
31.3.16
31.3.17
Audit status
Audited
Audited
Audited
Audited
Estimated
Estimated
Net Sales
298.74
443.45
226.32
277.00
605.00
706.00
Operating profit
15.29
2.87
4.82
9.36
30.76
38.84
15.29
2.87
4.82
8.36
24.01
29.84
Cash Generation
16.48
15.46
17.29
18.96
35.27
40.91
-6.37
-28.48
-16.81
63.84
60.36
62.35
Current ratio
0.95
0.86
0.90
1.60
1.49
1.44
TNW
37.88
37.05
39.09
59.45
79.46
103.19
TOL / TNW
5.28
7.82
6.26
3.83
2.81
2.13
2.02
2.33
1.81
2.03
1.27
0.76
1.55
1.75
1.95
1.04
1.29
1.65
Term Liability/
TNW
Gross Fixed assets/
Term loans
Year Ending
31.03.12
31.03.13
31.03.14
31.03.15
31.03.16
Net Sales
298.74
443.45
226.32
277.00
605.00
74.69
110.86
56.58
69.25
151.25
14.94
22.17
11.32
13.85
30.25
-5.24
-6.37
-28.48
-16.81
63.84
[A] - [B]
59.75
88.69
45.26
55.40
121.00
[A] - [C]
79.93
117.23
85.06
86.06
87.41
Whichever is less
59.75
88.69
45.26
55.40
87.41
Promoters' contribution - 5%
[B]
Already Available NWC
[of previous year]
[C]
Category
Past
Financials
Absolute
Compariso
n
ii.
Category
Future risk
Subjective
Assessmen
Past Financials
Parameter
CO
Value
Benchmark Values
Rate
TOL/TNW
6.26
>5.00
5.00-4.00
4.00-2.50
2.50-1.00
<1.00
Current
Ratio
0.90
<1.00
1.00-1.25
1.25-1.50
1.50-2.00
>2.00
DSCR
1.74
<1.00
1.00-1.25
1.25-1.75
1.75-2.50
>2.50
ROCE
0.39
<8%
8-12%
12-15%
15-25%
>25%
(Inv + Rec) /
Net sales
0.29
>6.00
6.00-5.00
5.00-4.00
4.00-3.00
<3.00
Comments
Rate
Impact of contingent
liability
4.00
Impact of Expansion
3.00
Transparency in
accounting
2.00
t of
Financials
Quality of inventory
3.00
Reliability of Debtors
2.00
2. BUSINESS EVALUATION
A. Market position evaluation
Parameter
Comments
Competitive position
Rate
3.00
3.00
3.00
3.00
3.00
4.00
The firm has adopted proven technology better
than its peers
4.00
3.00
3.00
Product quality
3.00
Marketing
3.00
Distribution network
3.00
3.00
75%
4. MANAGEMENT EVALUATION
A. Objective
Parameter
Co
Value
Actual gross
sales
226.32
Targeted sales
215.44
Actual PBT
4.82
Targeted PBT
4.15
Rate
<75
%
75% - 79%
80% - 89%
90% - 95%
>95%
4.00
<75
%
75% - 79%
80% - 89%
90% - 95%
>95%
4.00
B. Subjective
S. No.
Parameter
Comments
Rate
Management set up
3.00
3.00
2.00
2.00
Parameter
Status of account
Comments
No irregularity is observed with our bank in last 2
years
Rate
3.00
Operations in account
3.00
3.00
TOTAL SCORE
Factor
% score obtained
Weight
Weighted Score
62.50
40.00%
25.00
60.00
25.00%
15.00
Management Evaluation
75.00
20.00%
15.00
Conduct of Account
75.00
15.00%
11.25
Financial Evaluation
Business
&
Industry
Evaluation
AGGREGATE SCORE
66.25
Limit /
DP
Increment
Margin
Rate of
interest
Prime Security
25% for
Book
Debts
12.50 %
Stocks &Book
Debts
60.00
TermLoan-1-Rs.60.00
[Renewal]
45.83
NIL
25 %
12.75 %
Term Loan-2-Rs.15.00
[Renewal]
11.32
NIL
25 %
12.25%
Machinery-
New WCTL-Bifurcation
of Existing CC
60.00
25 %
12.50