Shoppers Stop vs Trent Ppt

8/2/2019 Shoppers Stop vs Trent Ppt

1/18

Feroz Digaria

Piyush Gadiya

Krish Desai

Abhishek Dedhia

Ronak Dalal


2/18


3/18

Financial Ratio Analysis

Applying analytical techniques to financial statementsand other relevant data to produce information usefulfor decision making.

Three Issues :

Financial analysis:

Focus

Profitability, Liquidity, Safety (Solvency or Risk)

In general, each financial ratio is closely related to one of the

three fundamental issues.


4/18

Income Statement for the year ending 31st Mar 2011

Particulars

amount incrs.

Particulars amountin crs.

Sales Turnover 686.15 PBDT 73.95

Excise Duty 0 Depreciation 13.63

Net Sales 686.15 Other Written Off 0

Other Income 79.05 Profit Before Tax 60.32

Stock Adjustments 34.71 Extra-ordinary items -0.08

Total Income 799.91 PBT (Post Extra-ord

Items)

60.24

Expenditure Tax 17.23

Raw Materials 373.14 Reported Net Profit 43.04

Power & Fuel Cost 23.88 Total Value Addition 340.5

Employee Cost 55.49 Preference Dividend 0.01

Other ManufacturingExpenses

4.79 Equity Dividend 15.06


5/18


6/18

Income Statement for the year ending 31st Mar 2011

Particulars

amount

in crs.

Particulars amount in

crs.Sales Turnover 1,929.00

PBDT 144.82

Excise Duty 0 Depreciation 31

Net Sales 1,929.00

Other Written Off 0

Other Income 9.13 Profit Before Tax 113.82Stock Adjustments 1.24 Extra-ordinary items 0

Total Income 1,939.37

PBT (Post Extra-ordItems)

113.82

Expenditure Tax 38.65

Raw Materials 1,096.92 Reported Net Profit 75.18

Power & Fuel Cost 0 Total Value Addition 530.81

Employee Cost 98.98 Preference Dividend 0

Other Manufacturing Expenses 135.92 Equity Dividend 6.16

Selling and Admin Expenses 183.87 Corporate Dividend Tax 0.8Miscellaneous Ex enses 112.03 Per share data


7/18

Balance sheet as on 31st march 2011

Particulars amount incrs.

Particulars amount incrs.

Sources Of Funds Application Of Funds Total Share Capital 41.08 Gross Block 505.64

Equity Share Capital 41.08 Less: Accum. Depreciation 193.5

Share Application Money 0 Net Block 312.14

Preference Share Capital 0 Capital Work in Progress 44.65

Reserves 557.02 Investments 237.19

Revaluation Reserves 0 Inventories 151.14

Networth 598.1 Sundry Debtors 16.01

Secured Loans 128.72 Cash and Bank Balance 2.36

Unsecured Loans 20 Total Current Assets 169.51

Total Debt 148.72 Loans and Advances 284.32

Total Sources Of Funds 746.82 Fixed Deposits 0.25

Total CA, Loans & Advances 454.08

Deffered Credit 0


8/18

SHOPPERS

STOPTrent

CURRENT RATIO 1.51

3.19

Current assets, Loans and

Advances 454.08 932.72

Current liabilities and

Provisions 301.24 292.48

The current ratio of Trent is more compared to S.S, this shows that Trent

has good financial health as compared to S.S and less risk of paying the

liabilities.

1.


9/18

SHOPPERS

STOP

Trent

Inventory turnoverratio

12.76 5.26

SALES 1929.00 686.15

INVENTORY 151.14 130.57

1) Inventory Turnover Ratio:

This shows how many times a company's inventory is sold and replaced over a period of time.

Generally calculated as: Sales Inventory.

However, it may also be calculated as : Cost of Goods sold Average Inventory.

ASSET MANAGEMENT RATIO:

Since inventory turnover ratio of S.S. is high, ratio implieseither strong sales or ineffective buying but a low turnoverimplies poor sales and, therefore, excess inventory. Trent's

have to improve there sales since risk of dead stock is more


10/18

2) Debtors Turnover Ratio: Net Credit Sales Average Trade Debtors

SHOPPERS STOP Trent

Debtors turnover ratio 120.49 103.03

SALES 1929.00 686.15

Debtors 16.01 6.66

The ratio indicates the efficiency of the concern to collect the

amount due from the debtors. Since S.S is having a high, it

proves that it collects its debt quicker than Trent. S.S manages its

trade debtors more efficiently than Trent.


11/18

3) DSO = Accounts Receivables Average Sales per Day

SHOPPERS STOP Trent

Days sales outstanding 3.03 days 3.54 days

RECEIVABLES 16.01 6.66

AVG SALES PER DAY 5.28 1.88

A low DSO number means that it takes a company fewer days to collect

its accounts receivable both company's have the chance to put the cash to

use again due to good ratio - ideally, to reinvest and make more sales.


12/18

4)Fixed Assets Turnover = Sales / Fixed Assets

SHOPPERS STOP Trent

Fixed Asset turnover 5.40 2.60

SALES 1929.00 686.15

TOTAL FIXED ASSETS 356.79 291.75

S.S uses its fixed assets very intensively as compared to Trent for

generating sale


13/18

5) Total Assets Turnover Ratio = Sales / Total Assets

SHOPPERS STOP Trent

Total asset turnover 2.58 0.51

SALES 1929.00 686.15

TOTAL ASSETS 746.82 1396.96

S.S ratio is good as compared to Trent.Trent is not generating a

sufficient volume of business given its total assets investments.


14/18

Debt management ratio

1) Debt to equity Ratio = Total debt / Total Share Holders Equity

SHOPPERS STOP Trent

Debt Equity 0.25 0.25

TOTAL DEBT 148.72 275

TOTAL

EQUITY

598.10 1081.95

Here we see that Shoppers Stop and Trent have same ratio of

0.25 which shows that Shoppers Stop and Trent are the companies

that are the good performers in the industry.


15/18

2) Interest Coverage Ratio = EBIT / interest expense

Column1 SHOPPERS STOP Trent

Interest Coverage Ratio (TIE) 20.80 7.01

EBIT 280.65 86.25

Interest Expense 13.49 12.3

A ratio used to determine how easily a company can pay interest onoutstanding debt. An interest coverage ratio is more than sufficient forboth, here it indicates S.S is generating sufficient revenues to satisfy interest

expenses as compared to Trent.


16/18

PROFITABILITY RATIOS

1) Profit margin on sales = NPAT / Sales*100

SHOPPERS STOP Trent

Profit Margin 3.90 6.27

Net Income 75.18 43.04

Sales 1929.00 686.15

A higher profit margin indicates a more profitable company that has

better control over its costs compared to its competitors. Profit margin

is displayed as a percentage, Trent has a higher profit margin than

S.S.


17/18

2) Return on Total Assets

SHOPPERS

STOP(%)

Trent (%)

Return on Total Assets 10.67 3.17

NET Income 75.18 43.04

Total assets 746.82 1356.96

The greater a company's earnings in proportion to its assets, the

more effectively that company is said to be using its assets.


18/18

Thank you

Documents

Shoppers Stop vs Trent Ppt