Financial Statement Analysis

Analysis of Steel Sector

A011 Akshadha Sukhija
A012 Aman Mehta
A013 Ananya Khattar
A014 Anchita Prithani
A015 Andre Barretto
ANALYSIS OF JINDAL STEEL AND POWER
 LIQUIDITY RATIOS

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 TURNOVER RATIOS

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 EFFICIENCY RATIOS

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 SOLVENCY RATIOS

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 PROFITABILITY RATIOS

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
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2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 EXPENSES RATIO

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 VALUATION RATIOS

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 RETURN ON INVESTMENTS RATIO

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1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
3 FACTOR DUPONT ANALYSIS
 5 FACTOR DUPONT ANALYSIS

scale x axis:
1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
scale x axis:
1- 2022-2023
2- 2021-2022
3- 2020-2021
4- 2019-2020
5- 2018-2019
 CCT ANALYSIS OF BALANCE SHEET
Increase in retained earnings in 2022-23 resulted in increase in reserves and surplus by
0.49% ultimately resulting in increase in shareholder’s funds therefore company is
trying to rely on interna accrual of funds rather than external funds.
Borrowed funds have decreased which corroborates the above mentioned point and
also shows that the company is on the path to become a debt free company.
Decrease in tangible assets due to depreciation.
Increase in mining rights suggests that the company is aiming to increase production.
Increase in investments has been observed over the years.
Working capital became positive over the years but again became negative in the latest
year 2022-23.
The total capital utilized has increased over the years suggesting that the company is
focusing on expansion.
 CCT ANALYSIS OF P&L

Sales have increased over the years but along with that the consumption of raw materials
and factory expenses have also increased which shows that the company is producing
more.
Administrative and selling and distribution expenses have decreased over the years.
Finance expenses have increased over the years.
Interest has increased but that can be corroborated by the repayment of the debts.
The increase in non operating income is less than the increase in non operating expenses
therefore resulting in decrease in EBIT margin for dupont analysis.
Profit after tax has increased over the years but fell in the latest year.
Analysis of JSW Steel
Liquidity Ratios
Activity Ratios
Efficiency Ratios
Solvency Ratios
Profitability Ratios
Valuation Ratios
RETURN ON INVESTMENT RATIOS
3 factor DUPONT ANALYSIS
5factor DUPONT ANALYSIS
 COMPARATIVE, COMMON SIZE AND TREND ANALYSIS

Net Sales have increased but gross profit margins have decreased due to increased operating costs. Major increase in operating costs is due
to higher administration and selling & distribution expenses.
PBT and PAT have declined significantly.
Shareholders funds have increased majorly due to increase in reserves and surplus.
Working capital of the company has increased, even turning positive in 2022 before turning slightly negative in 2023.
Company has seen increase in both shareholder fund and long term debt to finance its long term capital projects.
ANALYSIS OF
 Balance Sheet
There is an increase in shareholders fund in the year Total reserves and surplus almost constitute 50% of
2022-23 by 0.23% total capital employed. After covid19 the portion
The total borrowings have significantly decreased, seems to increase more to almost 65%. It is also
which suggests that the company wants to deleverage evident that borrowings were almost 40% of capital
their long-term debt. employed but after covid company has been reducing
Overall, the total capital employed has fallen mainly their borrowings with only 8% of capital employed left
due to the reduction in long-term debt. in the last year.
The working capital has decreased by around 8%, Property, plants and equipment make up for a huge
which is largely due to the increase in current chuck of the capital utilized. Property, plant and
liabilities of almost 25%. equipment and other fixed assets don’t show much
change (less than 10%).
The quick liabilities, especially borrowings, have
Current assets are almost 50% of capital employed, the
increased drastically by over 200% .
majority being due to high inventory. Similarly current
Their current assets have also increased by almost
liabilities are also 50% of capital employed mainly
30% but that’s mainly due to high inventory holding .
because of current borrowings and repayment of them.
Working capital fluctuated around covid but has been
constant for the last two years.
 Income Statement Sales have an upward trend as the company has been
The net sales have almost remained constant with a little successful in increasing their sales each year and
increase of 0.93% but net profit after tax has drastically thereby increasing their profit.
decreased by 84%. Raw materials consumed form a great part of the net
sales as this is a manufacturing industry.
While factory expenses remain the same the administration
and selling and distribution expenses have actually In the last year it accounted for almost 60% of sales,
decreased, which can also be the reason for no which is a huge proportion, and has increased
improvement in net sales in the year. drastically since covid.
Factory expenses form a major part of the expenses
The non-operating expenses also have increased due to as compared to other expenses. The operating
external reasons. The tax burden has been reduced expenses have been constant for the last two years
significantly, and the interest cost shows a slight increase. but have decreased comparatively, suggesting
operating efficiency.
All these huge differences in cost are very well evident in The gross profit margin has been on average 30% of
the profit margins. EBIT and EBT both show a decrease of sales but has been reduced to 20% in the last year. The
74% and 83% respectively while EAT is reduced by 84%. The operating profit margin and EBIT was also at 4% last year
company needs to manage their inventory and plan their despite the high sales.
expenses according to their goals appropriately. Net profit before and both after tax has been the lowest
of all year in 22-23 at approximately 3% and 2% of sales
respectively.
LIQUIDITY RATIOS
ACTIVITY RATIOS
PROFITABILITY RATIOS
SOLVENCY RATIOS
EFFICIENCY RATIOS
EXPENSE RATIOS
VALUATION RATIO
3 FACTOR DUPONT
5 FACTOR DUPONT
ANALYSIS OF KALYANI STEEL
 LIQUIDITY RATIOS

scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 TURNOVER RATIOS

scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 EFFICIENCY RATIOS

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1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 SOLVENCY RATIOS

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1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 PROFITABILITY RATIOS

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1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 EXPENSE RATIOS

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1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 VALUATION RATIOS

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1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 RETURN ON INVESTMENTS RATIO

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1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 DUPONT ANALYSIS

scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 DUPONT ANALYSIS

scale : x axis
1 = 2022-23
2 = 2021-22
3 = 2020-21
4 = 2019-20
5 = 2018-19
 CCT ANALYSIS

Balance Sheet

There is a 8.92% increase in Shareholder’s fund due to increase in Reserves and Surplus.
The share capital remains the same.
The Borrowed funds have decreased by 2.39%
A 6.92% increase in Capital Employed is majorly due to increase in Shareholder’s fund.
The Fixed Assets have increased by 14.78%. This is the highest incease seen in the past 5
years and might mean an increase in production capacity in coming years.
There is a slight decline in investments (0.9%)
The Working Capital has increased by 33.33%, which is majorly due to increase in Current
Assets (0.82%) and decrease in Currrent Liabilities (2.54%)
This thus resulted in the final increase in funds utilised by 6.92% from the previous year
and 180.48% from year 2018-19
 CCT ANALYSIS

Profit & Loss Statement

There is a 11.84% increase in Sales than previous year

The Cost of Goods Sold has increased by 18.76%, mainly due to increase in Total Material
Consumed (21.09%)
The Gross Profit thus, decreased by 10.12%
An increase in Operating Expenses (12.67%, mainly due to Salaries, Wages and Bonus) and
decrease in Operating Income (16.79%) has resulted in the decrease of Net Profit by
20.97%
The increase in Interest obligations by 112.7% has resulted in decrease of Profit Before
Tax by 30.93%.
The Tax Burden has decreased by 30.01% and the Profit after Tax has decreased by
31.24% in the current year
Analysis of
 Liquidity Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 Activity Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 Efficiency Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 Solvency Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 Profitability Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 Expense Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 Valuation Ratios

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 RETURN ON INVESTMENT RATIOS

scale : x axis
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
scale : x axis

DUPONT ANALYSIS
1 = 2018-19
2 = 2019-20
3 = 2020-21
4 = 2021-22
5 = 2022-23
 CCT Analysis of Balance sheet

Over the last five years, there has been an increase in shareholders' funds, primarily due to rising reserves and surplus,
likely driven by profitable years. Long-term borrowing has shown a significant decrease, indicating a reduction in debt
reliance and a preference for equity financing. This is also evident in the decreasing percentage of borrowing to capital
employed. Fixed assets constitute a substantial portion of the capital utilized, but there have been no significant changes,
suggesting limited expansion. Working capital has decreased, mainly due to increased current liabilities, including
borrowing. Current assets have increased, with a notable contribution from high inventory levels.
 CCT Analysis of P&L

Net sales have remained relatively constant over the last two years but have increased significantly over the five-year
period. However, in the most recent year, profits have declined, primarily due to rising raw material costs, accounting for
almost 60% of sales. Both pre-tax and after-tax profits in the last year have seen a significant drop, mainly because of
increased cost of goods sold (COGS).