Specific Project – A1

Segment Analysis of ITC limited

OR
Segment Analysis of Prakash Industries Ltd.

Specific Project – A2
Comparative Study of the Segments of Tata Power Ltd.

Specific Project – A3
Comparative Study of Performance of JK Tyre & Industries Ltd.

Specific Project – A4
Performance Analysis of Avenues Supermarts Limited

Specific Problem (Specific Prob. B1)

1. Cash Flow Statement (to all the students)
2. Theoretical Explanation: Meaning of Cash flow, Objective
of Cash Flow Statement, Classification of Activities; Procedure
of preparing Cash Flow Statement, Format of Cash flow
Statement with working notes
3. Numerical will be taken from NEW edition 2024
Groups Illustration Page No. Book
A Specific Pro. 4 P. 45 TS Grewal
B 7 P. 85 DK GOEL
C 6 P. 79 DK GOEL
D 5 P. 73 DK GOEL

4. Solve and Analysis of a numerical Problem with the

help Specimen given.

Specimen for Cash Flow Statement PAGE 39

Analysis the Cash Flows of Ajanta Arts Limited
2
 SPECIFIC PROJECT - A 1

1 TOPIC : Segment Analysis of ITC Limited

OBJECTIVES OF THE PROJECT
The main objectives of my project are that I will be able:
� To find out which segment has the maximum sales.
� To find out which segment earns the maximum profit.
� To find out which segment utilises the capital efficiently.
� To find out if there is any underutilisation of capital in any segments.
� To find out which are the best and the worst segments and analyse the reasons for the
same.
NEED FOR SEGMENT ANALYSIS
It has been made mandatory for all listed companies to report at the end of every quarter the Revenue earned, Profit
made with the Capital Employed at the disposal of each company. This has been done to stop the practice of covering
up the bad performance of any segment during the quarter. The stakeholders may question the management for poor
performance of any segment. They may also suggest improvements. The management may also give reason for poor
performance and may also take some necessary measures to improve the performance or may even decide to discontinue
the segment.
PERIOD OF STUDY
Study of the contribution of each segment during the Quarter ending March 31, 2023 towards Revenue, Profit and Capital
Employed.

TOOLS OF ANALYSIS
(i) Common Size Statements (ii) Net Profit Ratio of each segment
(iii) Pie Diagrams

ABOUT THE COMPANY

Incorporated on : 24th August, 1910 as a Tobacco Company
Head Office : ITC Limited, 37, J.L. Nehru Road, Kolkata
Chairman : Sh. Sanjiv Puri
It was originally in tobacco business but now ITC is one of India’s foremost
enterprise operating in businesses like FMCG (Fast Moving Consumer Goods),
Hotels, Paperboards and Speciality Papers, Packaging, Agri-Business and
Information Technology within a relatively short span of time. ITC has established
vital brands like Aashirvaad, Sunfeast, Dark fantasy, Fiama Di Wills, Vivel,
Classmate, etc. ITC constantly tries to benchmark its products, services and
processes to global standards. The company’s pursuit of excellence has earned its
national and international honours and fame

1 N.S. RANA, PGT COMMERCE, SHRIJI BABA SVM

SEGMENTS OF THE COMPANY

(a) Fast Moving Consumer Hotels (ITC) (c) Agri Business

Goods (FMCG)

(d) Paperboards and Packaging (e) Others

 SOURCE MATERIAL
ITC LIMITED
Audited Segmentwise Revenue, Results and Capital Employed
For the quarter ended 31st March, 2023 (₹ in Crores)
Quarter ended
Particulars
31/03/2023 (₹)
1. Segment Revenue
(a) FMCG – Cigarettes 5,750.44
– Others 3,190.34
Total FMCG 8,940.78

(b) Hotel 494.76

(c) Agri Business 1,899.01
(d) Paperboards, Paper & Packaging 1,458.87
(e) Others 575.68
Total 13,369.10
Less : Inter segment revenue 912.65
Net Sales/Income from Operations 12,456.45
2. Segment Results
(a) FMCG – Cigarettes 3,649.88
– Others 144.37
Total FMCG 3,794.25
(b) Hotels 38.27
(c) Agri Business 127.05
(d) Paperboards, Paper & Packaging
285.71
(e) Others
79.97
Total
4,325.25
Less : (i) Finance Costs
14.68
(ii) Other unallocable (income) net of unallocable expenditure
(432.90)
Profit Before Tax 4,743.47
Less : Tax expense —

N.S. Profit After Tax 4,743.47 RANA,

PGT
3. Capital Employed (Assets – Current Liabilities)
(a) FMCG – Cigarettes 3,334.93
– Others 6,686.82
Total FMCG 10,021.75
(b) Hotels 6,732.95
(c) Agri Business 3,361.49
(d) Paperboards, Paper & Packaging 6,052.78
(e) Others 1,226.19
Total Segment Capital Employed 27,395.16
COMMERCE, SHRIJI BABA SVM

1 N.S. RANA, PGT COMMERCE, SHRIJI BABA SVM

Source : [Link]
PROCESSING THE DATA
(i) Common Size Statement of Revenue
ITC LIMITED
Common Size Statement of Revenue
For the quarter ended March 31, 2023 (in ₹ Crores)

Segment Revenue (₹) Calculation* Percentage

8940.78
(a) FMCG 8940.78  100 66.9%
13,369.10
494.76
(b) Hotels 494.76  100 3.7%
13,369.10
1899.01
(c) Agri Business 1899.01  100 14.2%
13,369.10
1458.87
(d) Paperboards & Packaging 1458.87  100 10.9%
13,369.10
575.68
(e) Others 575.68  100 4.3%
13,369.10
Total 13369.10 100

Segment Revenue
*Formula :  100
Total Revenue
Revenue Contribution of Each Segment

4.3 FMCG
10.9
Hotels

14.2 Agri Business

Paperboards & Packing

66.9 3.7
Others
 (ii) Common Size Statement of Results (Profit)
ITC LIMITED
Common Size Statement of Profit
For the quarter ended March 31, 2023 (in ₹ Crores)

Segment Profit (₹) Calculation* Percentage

3,794.25
(a) FMCG 3,794.25  100 87.7%
4,325.25

38.27
(b) Hotels 38.27  100 0.9%
4,325.25
127.05
(c) Agri Business 127.05  100 2.9%
4,325.25

285.71
(d) Paperboards & Packaging 285.71  100 6.6%
4,325.25

79.97
(e) Others 79.97  100 1.9%
4,325.25

Total 4,325.25 100

Segment Profit
*Formula :  100
Total Profit
Profit % Contribution of Each Segment
1.9
2.9
0.9
6.6 FMCG

Hotels

Agri Business
87.7
Paperboard & Packing

Others

1 N.S. RANA, PGT COMMERCE, SHRIJI BABA SVM

(iii) Common Size Statement of Capital Employed
ITC LIMITED
Common Size Statement of Capital Employed
For the quarter ended March 31, 2023 (in ₹ Crores)

Segment Capital Employed (₹) Calculation* Percentage

10,021.75
(a) FMCG 10,021.75  100 36.6%
27,395.16

6,732.95
(b) Hotels 6,732.95  100 24.6%
27,395.16

3,361.49
(c) Agri Business 3,361.49  100 12.3%
27,395.16

6,052.78
(d) Paperboards & Packaging 6,052.78  100 22.1%
27,395.16

1,226.19
(e) Others 1,226.19  100 4.4%
27,395.16

Total 21,492.14 100

Segment Capital Employed

*Formula:  100
Total Capital Employed
Capital Employed % Contribution of each segment
4.4%

FMCG

22.1% Hotels
36.6%
Agri Business
12.3% Paperboards & Packing

24.6% Others

SUMMARY OF COMMON SIZE STATEMENTS OF ALL FIVE SEGMENTS

Revenue % Profit % Capital Employed %

Segment
Contribution Contribution Contribution
(a) FMCG 66.9% 87.7% 36.6%
(b) Hotels 3.7% 0.9% 24.6%
(c) Agri Business 14.2% 2.9% 12.3%
(d) Paperboards & Packaging 10.9% 6.6% 22.1%
(e) Others 4.3% 1.9% 4.4%
Total 100 100 100
 4.3% 1.9% 6.6% 4.4%
2.9% FMCG
3.9
10.9% 0.9%
Hotels
22.1%
36.6%
14.2% Agri Business
66.9%
87.7% 12.3% Paperboards & Packing
24.6% Others
3.7%

Revenue % Contribution Profit % Contribution Capital Employed % Contribution

(iv) Net Profit Ratios of all Segments

Segment Profit as % of Revenue

(a) FMCG 3,794.25

× 100 = 42.4%
8,940.78

38.27
(b) Hotels × 100 = 7.7%
494.76
127.05
(c) Agri Business × 100 = 6.6%
1,899.01
285.71
(d) Paperboards & Packaging × 100 = 19.5%
1,458.87

79.97
(e) Others × 100 = 13.8%
575.68

Bar Graph for Net Profit Ratio

Y

50

45
42.4%
Net Profit Ratio Percentage

40
FMCG
35
Hotels
30
Agri. Business
25
19.5% Paperboards & Packing
20
15 Others
13.8%
10
7.7% 6.6%
5

0 X
Segments

1 N.S. RANA, PGT COMMERCE, SHRIJI BABA SVM

 CONCLUSION
Observing the Profit, Revenue and Capital Employed tables above we see that the highest contribution to revenue is made
by FMCG 66.9% and the lowest revenue is contributed by the HOTELS BUSINESS 3.7%. The highest profit is also earned
by FMCG 87.7% and the lowest profit is earned by the HOTELS BUSINESS 0.9%. Similarly, most of the capital is employed
in FMCG and the least in the OTHERS 4.4%.
We can suggest the company to increase the sales of FMCG by increasing the capital employed so thatmore goods
can be sold in this segment. The company should give more attention to its HOTELS BUSINESS. Either the policies in this
segment have to be changed to make it more profitable or it should be completely closed down. Closure of this segment
would lead to the segment’s capital employed being utilised in FMCG segment to increase the total revenue and profit.
Even the capital invested in ‘OTHERS’ segment should be withdrawn and invested in FMCG or HOTEL BUSINESS to make
them earn more profit.
Even on the basis of Net Profit Ratio FMCG segment shows the best ratio. Undoubtedly the FMCG is thebest segment
and the worst is the Hotels segment.
VIVA-VOCE QUESTIONS
1. Name the segments of ITC Ltd.
Ans. (a) FMCG (b) Hotels (c) Agri Business (d) Paperboards & packaging.
2. Name the Chairman of ITC Ltd.
Ans. Sh. Sanjiv Puri is the Chairman of the company.
3. Give any one objective of Segment Analysis.
Ans. The objective of project is to know as to which segment is the best.
4. Which tools of analysis have been used in this project?
Ans. Tools used: (i) Common Size Statements and (ii) Net Profit Ratio.
5. When was the company incorporated?
Ans. The company was incorporated in 1910.
6. What is the Net Profit Ratio of FMCG segment?
Ans. 42.4% is the Net Profit Ratio of FMCG segment.
7. Which Segment has made the highest contribution to total revenue?
Ans. FMCG has made the highest contribution to total revenue, i.e., 66.9%.
8. Which segment contributes the lowest revenue?
Ans. Hotels segment has made the lowest contribution of 3.7% to total revenue.
9. Which segment has made the highest contribution to Profit?
Ans. FMCG has made highest contribution to total Profit, i.e., 87.7%.
10. Which segment is the best on all accounts?
Ans. FMCG is the best segment.
11. What suggestion would you make for better results?
Ans. Hotel segment should be closed and its capital should be invested in FMCG. This will increase revenue
and Profit.
12. Where is the head office of ITC situated?
Ans. Head office is situated in Kolkata.
13. Which segment is allocated the highest amount of capital employed?
Ans. FMCG is holding the highest amount of capital employed 36.6% of total capital employed.
14. From which segment capital employed should be withdrawn?
Ans. Capital employed should be withdrawn from OTHERS and invested in FMCG segment which is giving
better result.

1 N.S. RANA, PGT COMMERCE, SHRIJI BABA SVM

 SPECIFIC PROJECT
TOPIC : Segment Analysis of Prakash Industries Ltd.

2
OBJECTIVES OF THE PROJECT
The main objectives of my project are that I will be able:
� To analyse the contribution of each segment towards both Revenue and Results.
� To know and justify the extent of capital employed used by each segment.
� To judge the profitability of each segment.
� To know as to which segment performed least during the period under study.

PERIOD OF STUDY
Study of the contribution of each segment during the year ending March 31, 2024 towards Revenue, Profit and Capital
Employed.
TOOLS OF ANALYSIS
(i) Common Size Statements (ii) Net Profit Ratio of each segment
ABOUT THE COMPANY

PRAKASH INDUSTRIES Limited

The company was established in 1980 with a vision to become an integrated steel and power
company by the founder chairman Sh. B.D. Aggarwal. The company is today known for its quality
products at very reasonable and competitive prices. It always introduced innovativeways to
cut its cost to increase the profits. It has set up a state of the art technology integrated plant at
Champa in the Chhattisgarh state. The company has set up facilities at various places
to manufacture Wire Rod, HB Wire, TMT bars and Structurals. The company is self- Sh. B.D. Aggarwal

reliant in power with a power generation plant

of its own. Along with steel the company has
also focussed on power generation because of
increasing demand of power in the country.
Power is generated with the help of boilers using
low grade fuel for turbines. This is a very
economical process. It is a listed company and its
shares are traded both at BSE and NSE. The
market price as on May 18, 2017 was ₹96 per
share of ₹10 each. This indicates the financial
strength of the company.
SEGMENTS OF THE COMPANY

(a) Power (b) Steel (c) PVC Pipe

SOURCE MATERIAL
PRAKASH INDUSTRIES LIMITED
Segment wise Revenue, Results and Capital Employed
For the year ended March 31, 2024 (₹ in lakhs)

Capital Employed
Segment Revenue Results (Profits) (Segment Assets-
Segment Liabilities)
(a) Power 34,946 4,647 1,40,344
(b) Steel 1,79,887 987 1,65,132
(c) PVC Pipe 25,286 3,289 3,543

Total 2,40,119 8,923 3,09,019

Source : [Link]

PROCEDURE ADOPTED
(i) Preparation of three Common Size Statement for Revenue, Profits (Results) and Capital Employed from
the data in source material.
(ii) Preparing Pie Diagrams for each Common Size Statement.
(iii) Calculation of Net Profit Ratios.
PROCESSING THE DATA
(i) Common Size Statement of Revenue
PRAKASH INDUSTRIES LIMITED
Common Size Statement of Revenue
For the year ended March 31, 2024 (₹ in lakhs)

Segment Revenue Percentage of Total Angles in Degrees

(₹) (%)
(a) Power 34,946 14.55 52°

(b) Steel 1,79,887 74.92 270°

(c) PVC Pipe 25,286 10.53 38°

Total 2,40,119 100 360°

Project Work in Accountancy (Class-XII)

 Steel
74.92%

PVC Pipe
Steel
10.53% PVC Pipe
Power Power
14.55%

Pie Diagram depicting Revenue share of various segments

(ii) Common Size Statement of Results (Profits)

PRAKASH INDUSTRIES LIMITED
Common Size Statement of Profits
For the year ended March 31, 2024 (₹ in lakhs)
Segment Results (Profits) Percentage of Total Angles in Degrees
(₹) (%)
(a) Power 4,647 52 187°
(b) Steel 987 11 40°
(c) PVC Pipe 3,289 37 133°
Total 8,923 100 360°

PVC Pipe

Steel
PVC Pipe
Power

Pie Diagram depicting share of Profits contributed by each segment

(iii) Common Size Statement of Capital Employed

PRAKASH INDUSTRIES LIMITED
Common Size Statement of Capital Employed
For the year ended March 31, 2024 (₹ in lakhs)

Segment Capital Employed Percentage of Total Angles in Degrees

(₹) (%)
(a) Power 1,40,344 45 162°
(b) Steel 1,65,132 53.5 193°
(c) PVC Pipe 3,543 1.5 5°
Total 3,09,019 100 360°
 Steel
PVC Pipe
1.5% PVC Pipe
Power

Pie Diagram depicting share of capital employed of each segment

Observation
Steel Segment has contributed maximum percentage of 74.92% of Total Revenue but its share towards profit is only
11%. It is very strange. Moreover, it is using 53.5% of Total Capital Employed which is not justified on any account. The
management should find out and enquire into the reasons for this poor performance of this major segment with maximum
share of Revenue and minimum share of Profits.
PVC Pipe Segment has contributed only 10.5% of the Total Revenue but it has contributed 37% of the Total Profit.
Moreover, it used, only 1.5% of the Total Capital Employed this is really commendable performance.
Power Segment has contributed 14.55% of the Total Revenue has helped the company to earn 52% of the Total
Profit. The profitability of the power segment is the best. With this performance it stands at the top. Moreover, it has
used only 45% of the Total Capital Employed.

(iv) Calculation of Net Profit Ratio of all Segments

(a) Power Segment
Profit 4,647
Net Profit Ratio = × 100 = × 100 = 13.3%
Total Revenue 34,946

(b) Steel Segment

Profit 987
Net Profit Ratio = × 100 = × 100 = 0.5%
Total Revenue 1, 79,887

(c) PVC Pipe Segment

Profit 3, 289
Net Profit Ratio = × 100 = × 100 = 13%
Revenue 25, 286

The Net Profit Ratio of Power segment is the best of the three segments. PVC Pipe segment is at number two and
Steel segment at number three.

CONCLUSION
On the basis of the above analysis based on the Common Size Statements and Net Profit Ratios of the three
segments, Power segment has shown the best performance during the year ended March 31, 2024. Its
profit share is 52% with Revenue share of just 14.55% and Capital Employed consumption of 45%. Moreover,
its Net Profit Ratio is also the highest at 13.3%. There is huge demand for power in the country and it is
likely to continue. This segment has a very bright future. The company should try to invest more capital
in this segment to increase Total Revenue and Profit.
Project Work in Accountancy (Class-XII)
VIVA-VOCE QUESTIONS
1. Who is the founder of Prakash Industries Ltd.?
Ans. Sh B.D. Aggarwal is the founder of the company.
2. Where is the most modern steel plant of Prakash Industries Ltd. situated?
Ans. It is situated at Champa in Chattisgarh state.
3. Name the three segments of the company.
Ans. (a) Power, (b) Steel and (c) PVC pipe are the three segments of the company.
4. Which segment’s performance is the best?
Ans. Power segment has shown the best performance during the year ended March 31, 2016. Its profit share
is 52% with Revenue share of just 14.55% and Capital Employed consumption of 45%
5. Give two reasons for the best performing segment.
Ans. Two reasons for the best performance are :
(a) A good demand for power in the country and
(b) A good Net Profit Ratio.
6. What do you suggest to further increase the profit of the company?
Ans. The company should invest more in Power Segment because of its best Net Profit Ratio.
7. Name two products in the steel segment of the company.
Ans. Two products of Steel Segments are: (a) Wire Rod and (b) TMT Bar.
8. Which segment has contributed minimum profit towards the total profit?
Ans. Steel Segment has contributed the minimum profit.
9. Which segment has earned maximum revenue?
Ans. Steel Segment has earned maximum revenue.
10. How have you calculated degrees of angles for making Pie Diagram?
Segment Performance
Ans. The degrees are calculated as  360
Total Performance of all segments
11. What was the price of a share of the company as on May 18, 2017?
Ans. The price was quoted at ₹96 as on May 18, 2017.
12. Do you think it is better to invest in this company? If so, why? Give two reasons.
Ans. Yes, it better to invest in this company because
(i) Power is in great demand in the country
(ii) The company is doing best in Power Segment
 SPECIFIC PROJECT {A- 2 }
TOPIC : Comparative Study ofthe Segments of Tata Power Ltd.
3 OBJECTIVES OF THE PROJECT
The main objectives of my project are that I will be able:
� To know as to which segment is the best on the basis of Revenue, Profit and on the
basis of effective utilisation of Capital Employed.
� To know as to which segment’s performance is poor on the basis of the same parametres
as stated above.
� To give suggestions, after the analysis to the management.

NEED FOR SEGMENT REPORTING

All listed companies publish quarterly segment performance reports. This is done to inform the stakeholders about the
progress made by each segment of the company during the quarter. If any segment is not doing well, the reasons for
the same and the measures being taken are explained in detail. This quarterly reporting keeps the management on the
toes. They cannot cover up any poor performance of any segment. If poor performance continues for a long time, it
will be difficult to set the things right for the segment. So, it is better to know the drawbacks and other reasons at the earliest
so that suitable remedial action is taken at the earliest.
PERIOD OF STUDY
Two years ending March 31, 2023 and March 31, 2024.

TOOLS OF ANALYSIS
(i) Common Size Statements
(ii) Comparative Statements
(iii) Ratios

ABOUT THE COMPANY

TATA POWER LIMITED

Tata Power Limited was founded in 1910 by Mr Dorab Ji Tata with its headquarters in Mumbai. The chairman of the
company is Mr. Natarajan Chandrasekaran and Mr. Praveer Sinha is the CEO and M.D. The company deals in Electric
Power generation and also Natural Gas exploration and their distribution.

Project Work in Accountancy (Class-XII)

 Founder Chairman CEO and MD
Mr. Dorab Ji Tata Mr. Natarajan Chandrasekaran Mr. Praveer Sinha
Its electric generation capacity is 10,577 MW. It is India’s largest power company. In 2016 Tata Power made significant
inroads into renewable energy market in India by means of acquisition of ‘Welspun Renewables’ for a price of US $1.3
billion. It is the largest acquisition in the renewable sector.
Tata group holds around 32.47% of shares of the company. The equity shares are traded on both BSE and NSE.

SOURCE MATERIAL
TATA POWER LTD.
Segment wise Revenue, Profits and Capital Employed (₹ in Crores)
Year ended
Particulars 31-Mar-24 31-Mar-23
(Audited) (Audited)
Segment Revenue
(a) Power Business 25,420.37 25,492.58
(b) Coal Business 8,147.46 9,693.90
(c) Others 1,759.61 1,779.76
Total Segment Revenue 35,327.44 36,966.24
Less: Inter Segment Revenue 960.59 1,093.14
Revenue / Income from Operations (Net of Excise Duty) 34,366.85 35,873.10

Segment Results
(a) Power Business 4,202.05 3,732.84
(b) Coal Business 926.07 1,069.41
(c) Others 39.22 31.11
Total Segment Results 5,167.34 4,833.36
Less: Finance Costs 3,699.27 3,439.90
Less: Exceptional Item-Power Business – –
Add / (Less): Unallocable Income/ (Expense) (Net) 15.67 (418.39)
Profit Before Tax 1,483.74 975.07

Capital Employed
(a) Power Business 45,900.68 43,510.62
(b) Coal Business 9,270.82 9,238.91
(c) Others 1,270.93 1,165.05
Unallocable (38,750.95) (38,283.85)

Total Capital Employed 17,691.48 15,630.73

Source : [Link]
PROCEDURE ADOPTED
(i) Common size statements for Revenue, Profit and Capital Employed will be prepared for the years ending March
31, 2014 and 2015. These will indicate the contribution made by each segment in Revenue, Profit andalso
showing how they are using their respective share of Capital Employed. On the basis of this analysissome
conclusion will be derived.
(ii) Return On Investment (ROI) and Net Profit Ratio will be calculated for each segment for both the years ending
March 31, 2023 and 2024.
(iii) Two Comparative Statements based on the ROI and Net Profit Ratio will be prepared to judge the performance
of these segments. The relatives figures will help in deriving some good conclusion.
PROCESSING THE DATA
(i) Common Size Statement of Revenue
TATA POWER LTD.
Common Size Statement of Revenue
For the year ended March 31, 2023 (₹ in Crores)

Segment Revenue Amount (₹) Percentage of Total Angles

(a) Power Business 25,492.58 68.96% 248°
(b) Coal Business 9,693.90 26.23% 95°
(c) Others 1,779.76 4.81% 17°
Total 36,966.24 100 360°

68.96%

Power Business

Coal Business

Others

Pie Diagram depicting revenue share of various segments

Comments : Power Business is at the top in the year ended March 31, 2023

Calculation for Year 2023

25, 492.58
 Power Business = × 100 = 68.96%
36,966.24
9, 693.90
 Coal Business = × 100 = 26.23%
36,966.24

1, 779.76
 Others = × 100 = 4.81%
36,966.24
 TATA POWER LTD.
Common Size Statement of Revenue
For the year ended March 31, 2024 (₹ in Crores)

Segment Revenue Amount (₹) Percentage of Total Angles

(a) Power Business 25,420.37 71.95% 259°
(b) Coal Business 8,147.46 23.07% 83°
(c) Others 1,759.61 4.98% 18°
Total 35,327.44 100 360°

Power Business

Coal Business

Others

Pie Diagram depicting revenue share of various segments

Comments : Power Business is at the top in the year ended March 31, 2024
Calculations for Year 2024
25, 420.37
 Power Business = × 100 = 71.95%
35,327.44
8,147.46
 Coal Business = × 100 = 23.07%
35,327.44

1, 759.61
 Others = × 100 = 4.98%
35,327.44

(ii) Common Size Statement of Results (Profits)

TATA POWER LTD.
Common Size Statement of Results
For the year ending March 31, 2023 (₹ in Crores)

Segment Profit Amount (₹) Percentage of Total Angles

(a) Power Business 3,732.84 77% 277.2°
(b) Coal Business 1,069.41 22% 79.2°
(c) Others 31.11 1% 3.6°
Total 4,833.36 100 360°
 77%

Power Business

Coal Business

Others
1%
Others

Pie Diagram depicting share of profit contributed by each segment

Comments : Power Business is at the top in the year ended March 31, 2023
Calculations for Year 2023
3, 732.84
 Power Business = × 100 = 77%
4,833.36
1, 069.41
 Coal Business = × 100 = 22%
4,833.36

31.11
 Others = × 100 = 1%
4,833.36

TATA POWER LTD.

Common Size Statement of Results
For the year ending March 31, 2024 (₹ in Crores)

Segment Profit Amount (₹) Percentage of Total Angles

(a) Power Business 4,202.05 81.31% 292°
(b) Coal Business 926.07 17.92% 65°
(c) Others 39.22 0.77% 3°
Total 5,167.34 100 360°

Power Business

Coal Business

Others

Pie Diagram depicting share of Profit contributed by each segment

Comments : Power Business is at the top in the year ended March 31, 2024.
 Calculations for year 2024
4, 202.05
 Power Business = × 100 = 81.31%
5,167.34
926.07
 Coal Business = × 100 = 17.92%
5,167.34

39.22
 Others = × 100 = 0.77%
5,167.34

(iii) Common Size Statement of Capital Employed

TATA POWER LTD.
Common Size Statement of Capital Employed
For the year ending March 31, 2023 (₹ in Crores)
Segment Capital Employed Amount (₹) Percentage of Total Angles
(a) Power Business 43,510.62 80.70% 290°
(b) Coal Business 9,238.91 17.14% 62°
(c) Others 1,165.05 2.16% 8°
Total 53,914.58 100 360°

80.70%

Power Business

Coal Business

Others
2.16%
Others
Pie Diagram depicting share of capital employed of each segment
Comments : Power Business is at the top in the year ended March 31, 2023
Calculation for Year 2023
43,510.62
 Power Business = × 100 = 80.70%
53,914.58
9, 238.91
 Coal Business = × 100 = 17.14%
53,914.58
1,165.05
 Others = × 100 = 2.16%
53,914.58
TATA POWER LTD.
Common Size Statement of Capital Employed
For the year ending March 31, 2024 (₹ in Crores)

Segment Capital Employed Amount (₹) Percentage of Total Angles

(a) Power Business 45,900.68 81% 291.6°
(b) Coal Business 9,270.82 17% 61.2°
(c) Others 1,270.93 2% 7.2°
Total 56,442.43 100 360°
 81%

Power Business

Coal Business

Others
2%

Pie Diagram depicting share of capital employed of each segment

Comments : Power Business is at top in the year ended March 31, 2024
Calculations For Year 2024
45,900.68
 Power Business = × 100 = 81%
56, 442.43

9, 270.82
 Coal Business = × 100 = 17%
56, 442.43

1, 270.93
 Others = × 100 = 2%
56, 442.43

SUMMARY OF COMMON SIZE STATEMENT OF ALL SEGMENTS

Revenue Profit Capital Employed

Segments
2023 2024 2023 2024 2023 2024
(%) (%) (%) (%) (%) (%)

(a) Power Business 68.96 71.95 77 81.31 80.70 81

(b) Coal Business 26.23 23.07 22 17.92 17.14 17
(c) Others 4.81 4.98 1 0.77 2.16 2
Total 100 100 100 100 100 100

(iv) Comparative Statement of Segment-Wise Net Profit Ratio

TATA POWER LTD.

Comparative Statement of Net Profit Ratio
For the year ended March 31, 2023 and 2024 (₹ in Crores)

Segment 2023 2024 Absolute change Relative change*

(a) Power Business 14% 16.5% 2.5 17.86%

(b) Coal Business 11% 11.37% 0.37 3.36%

(c) Others 1.75% 2.2% 0.45 25.7%

Absolute Change
*Formula for Relative Change = × 100
Base year figure
 Y

100 Power Business

90
Coal Business
80

Percentage Change
70 Others

60
50
40
30 25.7%
20 17.86%

10 3.36%
0 X
Power Coal Others
Business Business
Segments

Relative Change in Net Profit Ratio

Net Profit
Calculation of Net Profit Ratio : Formula for Net Profit Ratio = × 100
Revenue
(a) For Year 2 0 23
3,732.84
 Power Business = × 100 = 14%
25,492.58
1069.41
 Coal Business = × 100 = 11%
9693.90
31.11
 Others = × 100 = 1.75%
1779.76

(b) For Year 2024

4202.05
 Power Business = × 100 = 16.5%
25420.37
926.07

 Coal Business = 8147.46 × 100 = 11.37%

39.22
 Others = × 100 = 2.2%
1759.61
(v) Comparative Statement of Segment wise Return On Investment
TATA POWER LTD.
Comparative Statement of Return On Investment
For the year ended March 31, 2023 and 2024 (₹ in Crores)
Segment 2023 2024 Absolute change Relative change*
(a) Power Business 8.58% 9.15% 0.57 6.64%
(b) Coal Business 11.57% 9.99% (1.58) (13.65)%
(c) Others 2.7% 3.08% 0.38 14.07%
Absolute Change
*Formula for Relative Change = × 100
Base year figure
 Y

100 Power Business

90
Coal Business
80
70 Others

Percentage Change
60
50
40
30
20 14.07%
10 6.64% Coal
Business
0 X
Power Others
– 10 Business
13.65%
– 20

Segments

Relative Change in Return on Investment

Net Profit
Calculation of Return on Investment : Formula for ROI = × 100
Capital Employed
(a) For Year 2023
3,732.84
 Power Business = × 100 = 8.58%
43,510.62
1,069.41
 Coal Business = × 100 = 11.57%
9,238.91

31.11
 Others = × 100 = 2.7%
1,165.05

(b) For Year 2024

 Power Business =
4,202.05
× 100 = 9.15%
45,900.68
 Coal Business = 926.07
× 100 = 9.99%
9,270.82
39.22
× 100 = 3.08%
Others = 1,270.93

CONCLUSION
 From the above analysis it appears that the Power Business is the best on all accounts. It’s contribution
towards Revenue has improved from 68.91% in 2023 to 71.95% in 2024, Its contribution towards profit
has also improved from 77% in 2023 to 81.31% in 2024. However, it seems to be using comparatively
higher share of Capital Employed both in 2023 (80.7%) and 2024 (81%). There seems to be some excess
capital at the disposal of Power Business which can be used in other segments.
 Share of Coal Business in Revenue has gone down from 26.58% in 2023 to 23.07% in 2024, and from
22% in 2023 to 17.92% in 2024 in profit. This is not encouraging. The excess capital employed in
Power Business can be shifted to Coal Business because of its better Net Profit Ratio, though its, ROI
is almost the same as that of Power Business.
  The performance of ‘Others’ segment on the basis of revenue and profit is the worst of all. Though
its Net Profit Ratio and ROI has improved, some available excess Capital Employed should be diverted
of to this segment to improve upon the performance of this segment as its ROI and Net Profit Ratios
are showing positive trends as per the comparative statement of both ROI (14.07% increase) and Net
Profit Ratio (25.7% increase). These are even better than those of Power Business. This means that
there is life in the segment also. The company should pay special attention to this segment.

vIVA-VOCE QUESTIONS
1. What is a segment?
Ans. A segment is a product or the business area of a company.
2. Who is the founder of Tata Power?
Ans. Mr Dorab Ji Tata is the founder of the company.
3. Name the MD of the company.
Ans. Mr Praveer Sinha is the MD of the company.
4. Where is the registered office of the company situated?
Ans. The registered office of the company is in Mumbai.
5. Where are the shares the company traded?
Ans. The Shares of the company are traded both at the Bombay Stock Exchange (BSE) and at National Stock
Exchange (NSE).
6. Name the segments of Tata Power Ltd.
Ans. The three segments of the company are: (a) Power Business (b) Coal Business (c) Others.
7. Which segment do you think is the best and why?
Ans. Power Business is at the top because of its best revenue and profit figures.
8. Which segment’s performance is the worst?
Ans. The performance of ‘Others’ segment is the worst.
9. What suggestions you have made to improve upon the performance of the poor segment?
Ans. Some more capital should be diverted to this poor segment as its Net Profit Ratio and ROI ratio are
showing improvement.
10. Which tools have you used to derive the conclusion?
Ans. Tools used are : (i) Comparative Statement (ii) Common Size Statements (iii) Ratios
11. What is meant by a Relative change?
Ans. It is a percentage change based on the base year figures.
12. What is meant by an Absolute change?
Ans. It is the difference between the base year and the current year figures.
13. Between Relative and Absolute changes, which change is a better indicator of the performance?
Ans. Relative change is the better indicator of performance.
14. How do you calculate the ROI and the Net Profit Ratio?
Segment Profit
Ans. ROI = 100
Segment Capital Employed
Segment Profit
Net Profit Ratio = 100
Segment Revenue
 GOYAL A DIGITAL LEARNING APP
BROTHERS
PRAKASHAN Learn @ ` 1 Per Day

TOPIC : Comparative Study of

A- 3 & Industries Ltd.


 To know whether the company improved upon its performance.

PERIOD OF STUDY
(i) Quarter ending Dec. 31, 2020, and Quarter ending Dec. 31, 2021.
(ii) Nine months ending Dec. 31, 2020 and nine months ending Dec. 31, 2021 and
(iii) Year ending December 31, 2021.
TOOLS OF ANALYSIS
(i) Comparative Statements (ii) Net Profit Ratio
ABOUT THE COMPANY
JK Tyre & Industries Ltd. was founded in West Bengal by Singhanias in 1974. It is an Automotive Tyres, Tubes and
Flaps manufacturing company. The name is derived from the initials of Raghupati Singhania’s forefathers Seth Juggilalji
and his son Kamlapatiji. It is the Radial Tyre leader in India for trucks, buses and cars. It is a leading member of JK
group of companies. It exports to six continents. Its plants are located in Mysore (Karnataka), Banmore (MP), Kankroli
(Rajasthan) and Chennai (Tamil Nadu).
Raghupati Singhania, the Chairman and MD of the company was appointed as the chairman of Automative Tyre
Manufacturing Association in 2001. It won the Excellence Award for (i) Outstanding Marketing, (ii) Cost Management,
(iii) Energy Management, (iv) Top Exports and many other awards in 2009. In 2015 it received the ‘Brand of the Year’
Award. ‘JK Tyre’ ‘Vikrant’ and ‘Tornel’ are the very well known brands of the company.
Other JK group companies are:
JK Paper Ltd.
JK Lakshmi Cement Ltd.
JK Fenner (India) Ltd.
Umang Dairies Ltd.
JK Agri-Genetics Ltd.
JK Risk Managers & Insurance Brokers Ltd.
Clintrix Research (Pvt) Ltd.
JK Industries

Project Work in Accountancy (Class-XII)

SOURCE MATERIAL
The following data has been taken from the website of the company.
Standalone Financial Information of the Company.
TABLE-1
Quarter Ended Nine Months Ended Year Ended
Particulars 31.12.2021 30.09.2021 31.12.2020 31.12.2021 31.12.2020 31.03.2021
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)

Turnover 2130.38 2028.07 1850.64 5892.29 4133.27 6170.12

Operating Profit (PBIDT) 200.94 201.38 312.22 690.51 571.1 886.61

Profit before tax 84.15 83.97 196.14 236.69 185.36 395.56

Profit after tax 57.91 54.39 125.29 156.89 119.27 258.45

Earning Per Share ₹2.31 ₹2.70 ₹9.10 ₹5.57 ₹5.07 ₹10.42
(EPS) (Consolidated)

PROCESSING THE DATA

Two comparative statements, one on Quarterly basis and another on Nine Months basis have been prepared. These
statements include the following information taken from the Table-1.
(a) Turnover for the period.
(b) Profit After Tax (PAT)
(c) Earning Per Share (EPS) and
(d) Total Expenses including interest, depreciation and tax. These figures are derived by deducting the
Profit After Tax (PAT) amount from the turnover given in the Table-1.
FIRST COMPARATIVE STATEMENT
For The Quarters ended December 31, 2020 and 2021 (in ₹ Crores)

Change
Quarter ending Quarter ended Relative
Particulars Absolute
Dec. 31, 2020 Dec. 31, 2021 Change
Change ( ₹)
(%)

Turnover 1850.64 2130.38 (+) 279.74 15.12

Total Expenses including interest Depreciation 1735.35 2072.47 (+) 337.12 19.4
and Tax. (Derived (see note below) from the data
of the company. Turnover Minus Profit after Tax)

Profit After Tax (PAT) 125.29 57.9 (–) 67.38 (–) 53.8

Earning Per Share in Rupees (EPS) 9.1 2.31 (–) 6.79 (–) 25.4

Note: Total Expenses = Turnover Less Profit After Tax (from Table-1.)
OBSERVATIONS
1. Turnover has increased by 15.12%.
2. Net Profit (PAT) has decreased by 53.8% because of increase in total expenditure by about ₹337.12 Cr.,
i.e. 9.4%. The increase in turnover is also only about 15%. This implies either the company has reduced the
selling prices or the quantity of goods sold is comparatively less. Overall the quarterly performance isnot
good. It may also be an aftermath of Pandemic.
3. As a result decrease in profit by 53.8% the Earning Per Share (EPS) has also reduced from ₹9.10 to ₹2.31
i.e. a decrease of 25.4%. The decrease in EPS may have a bad effect on the confidence of the Share Holders
in the working of the company.
Relative changes in Turnover Expenses, PAT and EPS
Y

1 Turnover

2 Total Expenses
O
3 Profit After Tax

4 Earning Per Share

–Y

SECOND COMPARATIVE STATEMENT

For Nine Months Ending December 31, 2020 and 2021 (in ₹ Crores)
Change
Quarter ended Quarter ended
Particulars Absolute Relative
Dec. 31, 2020 Dec. 31, 2021
Change ( ₹) Change (%)
Turnover 4133 5892 1759 43

Total Expenses including interest Depreciation 4014 5735.4 1721.4 42.9

and Tax. (Derived (see note below) from the data
of the company. Turnover Minus Tax Paid)
Profit After Tax (PAT)* 119.27 156.89 37.62 31.5

Earning Share in Rupees (EPS) 5.07 5.57 0.5 9.86

Note: * Total Expenses (incl. Tax) = Turnover – PAT (from Table-1.)

OBSERVATIONS
1. Turnover has increased by 42.6% during the said period.
2. Total expenses have also increased by 42.9%. These expenses have increased at a marginal rate of 3% over
the turnover rate. Inspite of this the Net Profit After Tax has increased by 31.5%. It gives an indication of
Positive Performance.
3. Because of increase in Net Profit the Earning Per Share has also increased marginally by 5%. This adds
to the confidence of the Share Holders.
4. Over the period of Nine Months, the Earning Per Share (EPS) has shown an increase of 9.86% relatively.
Project Work in Accountancy (Class-XII)
 Relative changes in Turnover Expenses, PAT and EPS
Y

45

40

35

30 Turnover

25 Total Expenses

20 Profit After Tax

15 Earning Per Share

10

0 X

THIRD STATEMENT
Study of NET Profit Ratios

Period Calculation Ratios %

Quarter ending December 31, 2021 57.91 3

 100
2130.38

Quarter ending December 31, 2020 125.29 6.77

 100
1850.64

9 Months ending December 31, 2021 156.89 2.66

 100
5892.29

9 Months ending December 31, 2020 119.27 2.89

 100
4133.27

Year Ending December 31, 2021 256.45 4.16

 100
6170.12

Net Profit After Tax (PAT)

Formula for Net Profit Ratios =  100
Revenue
OBSERVATIONS
1. Quarter ending December 31, 2020 has given better NP Ratio of 6.77 as compare to 2.72% of the Quarter
ending December 31, 2021. This may be less due to an impact of Covid.
2. NP Ratio for the 9 months period ending 31 December, 2020 and 31 December, 2021 is almost stable
though the one for 2020 is marginally better.
3. Net Profit Ratio for the year ending 31 December, 2021 is also good at 4.16%.
 CONCLUSION
The Comparative performance of the Quarterly periods have shown that the Quarter ending 31 December,
2021 shows a poor performance. Its Net Profit Ratio is only 2.72%. There is also a decrease in Net Profit by
53.8% as compared to the Net Profit of the same Quarter of the previous year ending December 31, 2020.
Comparative performance on the basis of Nine Monthly periods ending December 31, 2020 and 2021 shows
positive results. The turnover has increased by 43%. At the same time total expenses have also increased
by 42.9% relatively. However the Net Profit has increased by 31.5%. This is because of huge increase (43%)
in turnover. The overall performance for the year ending December 31, 2021 is good, its net Profit Ratio
stands at 4.16%. The Earning Per Share for the quarterly and nine monthly period, is not encouraging.
However the Earning Per Share for the year ending December 31, 2021 is very good at ₹10.42 (Table-1).

VIVA-VOCE QUESTIONS
1. What is the main objective of the Project?
Ans. The main objective of the project is to know whether the company has improved upon its performance.
2. Name any two JK group companies.
Ans. (i) JK Paper Ltd. and (ii) Laxmi Cement Ltd.
3. Name two places where its plants are located.
Ans. (i) Mysore (Karnataka) and (ii) Banmore (MP)
4. Who is the MD of the company?
Ans. Sh. Raghupati Singhania is the MD of the company.
5. How much is the relative change in the Net Profit in quater ending Dec 31, 2021?
Ans. The relative decrease is 53.8% over the same quarter in the previous year.
6. How much has the earning per share changed?
Ans. Earning per share has decreased by 25.4% in the quarter ending December 31, 2021 over the same
period in the year 2020.
7. How much has been the increase in the expenses in the quarter ending December 31, 2021?
Ans. The expenses have increased by 19.4% over the same quarter in last year 2020.
8. Which tools have you used for analysis?
Ans. Tools used: (i) Comparative Statement and (ii) Net Profit Ratio.
9. What is the Net Profit Ratio for the Quarter ending December 31, 2021?
Ans. Net Profit Ratio for the Quarter ending December 31, 2021 is 2.72%.
10. Why is the performance of the company on quarterly basis not good for the quarter ending
December 31, 2021?
Ans. There is a decrease in profit of 53.8% and also a poor NP ratio of 2.72%.

Project Work in Accountancy (Class-XII)

 SPECIFIC PROJECT- A 4
TOPIC : Performance Analysis of
Avenues Supermarts Limited

5 AvENUES SUPERmARTS LImITED

OBJECTIVES OF THE PROJECT

The main objectives of my project are that I will be able:
� To analyse the progress in total income (Turnover) over two years 2016 and 2017.
� To judge the progress in Net Profit After Tax (PAT) over two years 2016 and 2017.
� To workout the Net Profit Ratios for meaningful comparison.
� To draw the conclusion based on the above information.

PERIOD OF STUDY
Two years ending March 31, 2016 and March 31, 2017.
TOOLS OF ANALYSIS
(i) Comparative Statements (ii) Net Profit Ratio
ABOUT THE COMPANY
Avenue Supermarts Limited (ASL) is owned by Shri Radhakishan Damani, a Bengaluru based entrepreneur, who rose from
a one flat to a major retail superstores under the brand name D Mart. The ASL was incorporated in the year2000
in Mumbai. It owns and operates big superstores across the country. It gives the customers a ‘One Stop’ shopping
experience. In India it has several stores across 11 states and 1 union territory.

Founder & Chairman: Radha Kishan Damani CEO: Ignatius Navil Noronha
These stores deal in all household daily needs including groceries, food, toiletries, beauty products, garments, kitchenware,
bed and bath linen and home appliances, etc. The stores are being operated with high operating efficiency through stringent
inventory management using IT systems and effective and efficient internal controls. It has a strong promoter background
with all the experience of Shri Radhakishan Damani and senior experienced management [Link] standards of
customer service make sure that there is pleasant shopping experience at all the stores.
 Products Offered by D Mart

D Mart Brands Home & Personal Care Bed & Bath

Luggage Dairy & Frozen Fruits & Vegetables

Daily Essentials Grocery & Staples Footwear

Crockery Toys & Games Plastic Containers

Kids Apparel Ladies Garments Apparel for Men

The company made a public issue (IPO) of its shares in March, 2017. The size of the issue was ₹1,870 crores. A share
of ₹10 was issued for ₹299, the issue was oversubscribed many times. On the day of listing on March 28, 2017 the
shares were traded at double the issue price. This shows the confidence which people have in the quality of service and
products provided by the company through its stores. This is also proved by the total revenue of the year 2016-2017
has reached ₹11,91,240 lakhs (i.e., ₹11,912.4 Crores) over a period of around 16 years.
It proved to be a really successful venture.

D Mart Stores Across India

SOURCE MATERIAL

A cutting from the Economic Times of May 7, 2017 giving financial information of the company both on quarterly and
yearly basis for two years ending March 31, 2016 and 2017.
 Note: Only standalone data for the years ending March 31, 2016 and 2017 has been used.

Project Work in Accountancy (Class-XII)

PROCESSING THE DATA
(i) Quarter Based Comparison
AVENUE SUPERMARTS LIMITED
Comparative Statement (Quarterly Basis)
For the Quarter ended March 31, 2016 and March 31, 2017 (₹ in lakhs)
Quarter Ending Quarter Ending Absolute Relative
Sr. Particulars March 31, 2016 March 31, 2017 Change Change
( ₹) ( ₹) ( ₹) (%)

1. Total Income 2,21,967.29 3,12,049.92 90,082.63 40.58

(Revenue)

2. Net Profit After Tax (PAT) 6,555.86 9,666.60 3,110.74 47.45

Relative Change in Total Income and Net Profit After Tax (Quarterly Basis)
Y

50 47.45%
Total Income

40.58%
Net Profit After Tax
40

30
% Increase

20

10

0 X
Total Net Profit
Income After Tax

Observation
Both the total income and the net profit have increased during the quarter ending March 31, 2017. However the net
profit has increased at a higher rate as compared to the total income which has increased by 40.58% whereas net profit
has increased by 47.45%. The increase in net profit is 7.07% more than the increase in the total income. There seems
to be a better cost control during this quarter. This must have increased the profit margin over the total income because
under the current competitive conditions the company cannot afford to increase the prices to increase the profit. It is a
good trend which must be maintained. The company must try to increase its total income in the following quarters of
the new financial year, to give a better look to its profitability.
 (ii) Yearly Comparison
AVENUE SUPERMARTS LIMITED
Comparative Statement (Annual Basis)
For the Year ended March 31, 2016 and March 31, 2017 (₹ in lakhs)

Year Ending March Year Ending March Absolute Relative

Sr. Particulars 31, 2016 31, 2017 Change Change
(₹) (₹) (₹) (%)

1. Total Income (Revenue) 8,59,522.66 11,91,240.76 3,31,718.1 38.59

2. Net Profit After Tax (PAT) 31,791.16 48,263.85 16,472.69 51.81

Relative Change in Total Income and Net Profit After Tax (Yearly Basis)

60

51.81%
50
Total Income

40 38.59% Net Profit After Tax

% Increase

30

20

10

0 X
Total Net Profit
Income After Tax

observation
Both the total income and the net profit have shown an increasing trend on yearly basis in the year ending March
31, 2017. The total income has increased by 38.59% whereas the net profit has increased by 51.81%. This shows
that net profit has increased at a higher rate than the total income. The increase in net profit is 13.06% higher than
that of the total income. On quarterly basis the increase in the net profit is only 7.07% higher than that of the total
income. On comparison with the performance during the quarter ending March 31, 2017 it is clear that theperformance
during the first three quarters is far better than in the current quarter. the company must try to find outthe reasons
for comparatively poor performances in the 4th quarter. It seems that the cost control systems have beenmore stringent
during first three quarters to help the company earn better profit. The same level of effort should be maintained during next
financial year.
Project Work in Accountancy (Class-XII)
(iii) Comparison of Net Profit Ratios
Calculation of Net Profit Ratios
I. Quarterly Basis

(a) For Quarter Ending March 31, 2016

Net Profit After Tax 6,555.86
× 100 = × 100 = 2.95%
Total Income 2,21,967.29

(b) For Quarter Ending March 31, 2017

Net Profit After Tax 9,666.60
× 100 = 3,12,049.92 × 100 = 3.09%
Total Income

II. Yearly Basis

(a) For Year Ending March 31, 2016

Net Profit After Tax 31,791.16

× 100 = × 100 = 3.69%
Total Income 8,59,522.66

(b) For Year Ending March 31, 2017

Net Profit After Tax 48,263.85

× 100 = × 100 = 4.05%
Total Income 11,91,240.76

Comparative Statement of Net Profit Ratio

(Quarterly and Yearly Basis)
Absolute Change Relative Change
Sr. Particulars March 31, 2016 (%) March 31, 2017 (%)
(%) (%)
1. Net Profit Ratio 2.95 3.09 0.14 4.74
(Quarterly Basis)
2. Net Profit Ratio 3.69 4.05 0.36 9.75
(Yearly Basis)
 Net Profit Ratio Change
Y

10 9.75%
Quarterly
9

8 Yearly

6
% Increase

5 4.74%

0 X
Quarterly Yearly

Project Work in Accountancy (Class-XII)

Observation
The comparison of net profit ratios between the two periods also confirms that the net profit ratio is higher on yearly
basis than the net profit ratio on the quarterly basis (4th quarter). The net profit ratio for the 4th quarter is only 4.74%
whereas the net profit ratio for the year ending March 31, 2017 is 9.75%. The net profit ratio for the year is 5.01%
more than the net profit ratio of the quarter ending March 31, 2017. This reconfirms the derivation based on the
quarterly and yearly comparisons of total income and net profit done earlier. The profitability has gone down during the last
quarter (i.e., 4th quarter) of the year. This falling trend needs to be checked and the policies followed during the previous
three quarters should be encouraged and followed. The management must try to find out the reasons behindthis poor
performance in the last quarter.

CONCLUSION
 On yearly basis the company has done very well. Its total income and net profit increased by 38.75%and
51.81% respectively. The relative increase in the net profit is more than the relative increase in the total
income. This indicates that the company is cost conscious and is exercising cost controls. This has helped
the company to show better profitability. It cannot increase the price but it can reduce the costs and
abnormal losses to increase profits which it has successfully done.
 The performance in the 4th quarter ending March 31, 2017 is poor. The profitability in 4th quarter would have
been much higher if the same standard of efforts had been maintained as were there during theprevious
three quarters. The reasons must be identified and loopholes duly plugged.

VIVA-VOCE QUESTIONS
1. What is the name of the company?
Ans. The name of the company is ‘Avenues Supermarts Limited’.
2. What is the business of the company?
Ans. The company is in retail lifestyle business.
3. When was the company incorporated?
Ans. The company was incorporated in the year 2000.
4. Who is the founder of the company?
Ans. Sh. Radha Kishan Damani is the founder of the company.
5. Where is this company based?
Ans. The company is based in Mumbai.
6. Name any four cities where the stores of this company are being run.
Ans. (a) New Delhi, (b) Mumbai, (c) Kolkata, and (d) Bangaluru.
7. How many stores of Avenues Supermart Limited are there in the country?
Ans. It has several stores (around 300) across 11 states and 1 union territory.
8. When did the company offer its IPO?
Ans. The IPO way offered in March 2017.
9. At what price its shares were listed?
Ans. The shares listed at ₹600 i.e., double the issue price which was ₹299.
 10. What is the relative change in net profit after tax on quarterly basis?
Ans. The relative change in net profit after tax on quarterly basis is 47.45%.
11. What is the relative change in total income on yearly basis?
Ans. The relative change in Total Income on yearly basis is 38.59%.
12. What is the relative change in net profit after tax on yearly basis?
Ans. The relative change in Net Profit after Tax on yearly basis is 51.81%.
13. What is the relative change in total income on quarterly basis?
Ans. The relative change in Total Income on quarterly basis is 40.58%.
14. Identify any two reasons for the poor performance in the quarter ending March 31, 2017.
Ans. Two reasons are (i) Poor cost control measures during the quarter and (ii) Higher purchasing cost.
15. What should the company do to improve performance?
Ans. The company should eliminate the abnormal wastage and reduce the normal wastage. It should improve
upon its cost control systems. It should reduce purchasing cost by buying in large scale.
16. Name some products in which the company deals?
Ans. (a) Bed & Bath Linen (b) Apparals (c) Groceries (d) Crockery items.
17. Draw the logo of the company.

Ans.

18. What is the brand name of the stores run by the company?
Ans. The brand name is ‘D Mart’.
19. What is the total income of the company during the year ending March 31, 2017?
Ans. The total income is ₹ 11,91,240 Lakhs for the year ending March 31, 2017.

Project Work in Accountancy (Class-XII)

 Specimen

To observe how the Operating and Financing cash inflows have been used.

PERIOD OF STUDY
Years 2010, 2011, 2012 and 2013.
SOURCE MATERIAL
Operating, Investing and Financing Cash Flows along with opening and closing balances of cash and cash equivalents
have been picked up from the site of the company.
CASH FLOWS OF AJANTA ARTS LTD FROM 2010 TO 2014 (in ₹ Crores)
Sr. 2010 2011 2012 2013
Particulars
No. (₹) (₹) (₹) (₹)
1. Opening Balance of Cash & Cash Equivalents 25,615 51,000 81,740 40,018
2. Cash Flow from Operating Activities 15,600 20,300 18,712 25,400
3. Cash Flow from Investing Activities (10,383) (14,760) (32,334) (56,500)
4. Cash Flow from Financing Activities 20,168 25,200 (28,100) 22,733
5. Closing Balance of Cash and Cash Equivalents 51,000 81,740 40,018 31,651
Source : website of the company.
PROCESSING THE DATA
(i) Cash and Cash Equivalents
It seems that a lot of money has been locked in Cash & Cash Equivalents. This can be used for expansion
after keeping some money for working capital requirements.
(ii) Operating Activities
(a) In 2011 the inflow of cash from operating activities increased by ₹ 4,700 crores. This indicates 30%
increase over 2010, which is good.
(b) In 2012 the cash inflow from operating activities decreased by ₹ 1,588 crores. This means that the cash
inflow decreased by 7.82%. This may be due to decrease in sales or a higher volume of credit sales.

Project Work in Accountancy (Class-XII) 39

 (c) In 2013, the cash flow from operating activities again picked up tremendously. It increased by ₹ 6,688
crores which amounts to 35.74% increase which is very good. This may be due to recovery from debtors
and more & more cash sales.
(d) Over the years from 2010 to 2013, the cash inflow has increased by ₹ 9,800 crores which amounts to 62.82%
increase.
Operating Cash Inflows
Year Operating Inflows
2010 ₹ 15,600 crore
2011 ₹ 20,300 crore
2012 ₹ 18,712 crore
2013 ₹ 25,400 crore

Y
2010

25,400
30 2011
20,300
Operating Inflows

25

18,712
(in ` crores)

2012
15,600

20
2013
15

10

0 X
Year

Cash Flow from Operating Activities

(iii) Investing Activities

Investing activities indicate the growth orientation of the firm. The investment in Fixed Assets is increasing
year after year.
Change in outflow of Investing Activities
Year Increase Percentage Change
2011 ₹4,377 42%
2012 ₹17,574 119%
2013 ₹24,166 74.74%
Y
119%

2011
120
2012
Outflows (in ` crores)

74.74%
Change in investing

100
2013
80

60
42%

40

20

0 X
Year

Change in Investing Outflows

40
 The firm is investment minded, increase of 42% occurred in 2011 followed by 2012 when the investmentincreased
by 119%. In 2013 it increased by 74.74%. This policy of the firm will definitely pay in the longrun. The
production will increase and the sales revenue will also increase.
(iv) Financing Activities
(a) In 2011 the cash inflow from financing activities increased by ₹ 5,032 crores which is an increase of24.95%
increase. This was used partly for investment in fixed assets and partly for working capital requirements.
(b) In 2012 there is an outflow of cash ₹ 28,100. This is because of the repayment of loans. It may also
be because of payment of dividend because there is enough cash inflow from operating activities.
(c) In 2013, there is a cash inflow of ₹ 22,733. It appears that the firm has taken more long-term loansto
finance, its growth activities.

POSITION OF CASH FLOWS

(See Source Material)
Y

80
70
60
inflows

50
40
30
20
10 Investing

0
Operating
10
Equivalents
20
Outflows

30 Financing
40
50
60 2013

Y

Net Cash Inflow

Year Amount (₹) Flow

2010 25,385 Net Inflow

2011 30,740 Net Inflow

2012 (41,722) Net Outflow

2013 (8,367) Net Outflow

Project Work in Accountancy (Class-XII) 41

CONCLUSION
It has been noticed that:
 In the year 2010 and 2011 an exceptionally high amount of balance of Cash and Cash Equivalents
were held by the firm.
 The company took care of this fact and reduced it in next two years (see Table-3). In the year 2012,
though it is less than the earlier years, it is still on the higher side. Cash and cash equivalents should
be sufficient only for working capital needs.
 The firm should invest more in fixed assets in the coming year.
 It should also think of paying back the borrowed money so as to reduce the interest burden.
 Moreover, it is also desirable that the business should think of expanding in view of higher cash inflows
from operating activities which is also the best source of working capital as well as for expansion

VIVA-VOCE QUESTIONS
1. What is the objective of the Project?
Ans. The objective is to know how the operating and financing cash inflows have been used . Also if any
fixed asset has been sold, how these inflows are used.
2. What is meant by cash equivalents?
Ans. Cash equivalents include cash and any other asset which can be converted into cash without any loss
of value.
3. Give any two items included in Operating Activities.
Ans. (i) Sales and (ii) Purchases
4. Name any two items included in Financing Activities.
Ans. (i) Issue of Shares and (ii) Payment of Dividend
5. Name any two items included in Investing Activities.
Ans. (i) Purchase of fixed assets (ii) Sale of fixed asset.
6. What is the percentage increase in Cash Flows from Investing Activities in 2013?
Ans. Cash outflows from investing activities have increased by 74.74% is 2013.
7. What is the Net Cash Flow of the year 2013?
Ans. Net outflow of Cash in 2013 is ₹8,367.
8. Under which activities all cash flows are negative?
Ans. Under Investing Activities all cash inflows are negative. It means more investments have been made.
9. What should the company do with exceptionally high balances of Cash and Cash equivalents?
Ans. The excess cash and cash equivalents should be used for expansion activities.
10. Why do you think that there is a cash inflow of ₹22,733 in 2013?
Ans. May be that the company has taken more loans during this period.

N.S. RANA SHRIJI BABA SVM