Hemlata a Project Report on Financial Statement Analysis(BHEL)

BHARAT HEAVY ELECTRICALS LIMITED

FINANCIAL STATEMENTS ANALYSIS OF


(BHEL)

A

PROJECT REPORT

Submitted to the faculty of Commerce & Business Administrative in the partial fulfillment of the requirement for the Degree of

Bachelor of Commerce

HPU University

SUBMITTED BY: HEMLATA

CLASS : B.Com 6th Sem

CLASS ROLL NO. : C3-15-45

UNIV. ROLL NO.: 3113MNO1170029

UNDER THE SUPERVISION OF :

PROF. RAKESH KAPOOR

DEPARTMENT OF COMMERCE

VGC MANDI (H.P.)

April 2016

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PRFEACE

As the world is growing rapidly, the businesses are also moving to become the huge one. And

by that result, more and more people want to become a master in these businesses. The main

purpose in the finance field is to know how the financial analysis is done. We all know that

finance is the blood of any business and without it no business can run. Financial analysis of

a company is very difficult and the most important task and by doing this I am able to know

the whole financial position and financial structure of the company.

Simply by looking at how much cash a company has does not provide enough information.

The financial statements need to be analyzed to measure a company’s performance and to

compare it with other firm’s in the same industry. The resulting information is intended to be

useful to owners, potential investors, creditors, analysts, and others as the analysis evaluates

the past performance, future potential and financial position of the firm.

This report is an analysis of financial statements of BHEL. This report has been prepared with

an objective to develop analytical skills required to interpret the information (explicit as well

as implicit) provided by the financial statements and to measure the company’s performance

during the past few years. The financial statements are analyzed using traditional evaluation

techniques such as horizontal analysis, vertical analysis and trend analysis. Sincere attempts

have been made to make this report error free but if any errors and omissions are found then I

apologize for that.

Hemlata

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ACKNOWLEDGEMENT

This is a great opportunity as well as great honor to submit this Project to you, I am firstly

thanks to my college to give me this kind of course outline and makes me grateful by doing

this project.

I sincerely thank all who have contributed to success this Report. Firstly I thanks to our Prof.

Rakesh Kapoor for makes us able to doing this kind of work and giving us new experience.

And help us a lot whenever we needed. He also provides an important data and makes us to

understand the terms and theory of Finance as well as gives us guidance.

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CERTIFICATE

It is certified that project report “Financial Statement Analysis of

B.H.E.L.”, Submitted by Hemlata in partial fulfillment of the requirement for

the Degree of B.Com from HP University, embodies original work and has

been done under my supervision.

Dated………………… Signature of Guide

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CHAPTERS

FINANCIAL STATEMENTS:

Financial statements primarily comprise two basic statements:

1. The position statements of the balance sheet.

2. The income statements or the profit and loss account.

Accounting principles specify that a complete set of financial statements must

include:

1. A balance sheet

2. An income statement

3. A statement of change in owners accounts.

4. A statement of changes in financial position.

BALANCE SHEET:

The balance sheet is one of the important statements

depicting the financial strength of concern. It shows the properties that are

owned on one hand and on the other hand the sources of the assets owned by the

concern and all the liabilities and claims it owes to owners and outsiders. The

balance sheet is prepared on a particular date. The right hand shows properties

and assets and the left hand shows liabilities.

INCOME STATEMENT OR PROFIT AND LOSS ACCOUNT:

Income statement is prepared to determine the operation position of the

concern. It is a statement of revenues. The income statement may be prepared in

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the form of manufacturing account to find out the cost of the production in the

form of trading accounts to determine gross profit or loss, in the form of profit

and loss account to determine net profit or net loss.

STATEMENT OF CHANGES IN OWNERS EQUITY:

The term owners equity refers in the claims of the owners of the

business against the assets of the firm. It consist of two elements.

1. Paid up share capital i.e. the initial amount of funds invested by the

shareholders.

2. Retained earnings/reserves and surplus representing undistributed profits.

The statement of changes in owners equity simply shows

the beginning balance of each owners equity account, the reasons of

increases and decreases in each, and its ending balance. However, in most

cases the owners equity account changes significantly in retain earnings

and hence the statement of changes in owners equity becomes merely a

statement of retained earnings.

STATEMENT OF CHANGES IN FINANCIAL POSITION:

The basic financial statement i.e. the balance sheet and profit and loss

account and income statement of a business reveals the net effect of various

transactions on the operational position of the company. But there are many

transactions that do not operate through profit and loss account. Those for a

better understanding another statement of changes in financial position has to be

prepared to show the changes in assets and liabilities from the end of another

point of time. The statement of changes in financial position may take any of

the two forms. They are:

Funds statements

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Cash flow statements

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS:

Analysis and interpretation of financial statements are and attempt

to determine the significance and meaning of the financial statement data as so

that a forecast can be made of the prospects for future earnings ability to pay

interest, debt and maturities (current and long term) and profitability of a sound

dividend policy.

Financial analysis main function is pinpointing of the strength’s

and weaknesses of a business concerns by regrouping and analysis of figure

contained in financial statements by making comparison’s of various

component and by examine their content. The financial manager uses this as the

basis to plan future financial requirements by means of forecasting and

budgeting procedures.

The analysis of and interpretation of financial statements represents

the lost of the four measure steps of accounting viz.

Analysis of each transaction to determine the accounts to debited and

credited and the measurements and the valuation of each transactions to

determine the amounts involved.

Recording of the information in the journals. Summarization in largest

and preparation of work sheet.

Preparation of financial statements.

Analysis and interpretation of financial statements results in the

presentation of information that assets business managers, creditors and

investors. This requires a clear understanding of monitoring item of the

items.

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The analysis must group that represents sound and unsound

relationships reflected by the financial statements. Those, the data is more

maintain full and it is placed in better perspective when it is provision and by

means of measurement, it’s relationship with others is established in terms of if

relative significance and it is ranked in terms of its relative significance. One

can achieve this by comparisons made between related items in the statements

series of years.

TOOLS OF FINANCIAL ANALYSIS USED IN THE STUDY:

MEANING OF COMPARATIVE STATEMENT:

The comparative financial statements are the statements of the

financial position of different periods; the elements of financial positions are

then in a comparative form to give idea of financial position of two or more

periods. The comparative statement may show:

Absolute figures

Changes in absolute figures i.e. increase or decrease in absolute figures.

Absolute data in terms of percentage.

Increase or decrease in terms of percentage.

COMPARATIVE BALACE SHEET:

It is a statement of financial position of a business at a specific

movement of time. It represents all assets owned by the business at a particular

movement of time and the claims of the owners and outsiders against those

assets at the time. It is a way they shape the financial condition of the business

at that time.

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The important distinction between an income statement and

balance sheet is that the income statement is for a period where as balance sheet

is on a particular date.

COMPARATIVE INCOME STATEMENT:

The comparative income statement gives the results of the

operation of a business. The comparative income statement gives an idea of the

program of a business over a period of time. The changes in absolute data in

money values and percentages can be determined to analyze the profitability of

the business.

USES AND IMPORTANCE OF FINANCIAL STATEMENTS:

The financial statements are mirrors which reflect the financial position and

operating strength’s or weaknesses of the concern. These statements are useful

to management, investors, creditors, bankers, workers, government and public

at large. George O May points of the following measure used of financial

statements:

As a basis for taxation.

As a basis for price or rate regulation

As a guide to the value of investment already made

As a basis for granting credit.

LIMITATIONS OF FINANCIAL STATEMENTS:

Financial statements are essentially interim reports and hence

cannot be final because the actual gain or loss of a business can

be determined only efface it has put down its shutters.

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They tend to give an appearance if finality and accuracy,

because they are expressed in exact money amount. Any value

to the amounts presented in the statement depends on the value

standards of the person dealing with them.

The balance sheet loses its functions as an index of current

economic realities due to the fact the financial statements are

compiled on the basis of historical costs while there is a market

decline in the value of the monitoring unit and the resultant rise

in prices. The problem has become more important especially

during the war and the post war period.

They do not give effort to many factors, which have a hearing

on financial conditions and operating results because they

cannot be stated in terms of money and are qualitative in nature.

Such factors are reputation and prestige of the business with the

public its credit rating the efficiency and loyalty of its

employees and integrity of the management.

Due to these limitations it is said that financial statements don’t

show the financial conditions of the business rather they show,

the position of financial accounting for a business.

PARTIES INTERESTED IN FINANCIAL STATEMENTS:

Now a days the ownership of capital of many public companies

has become truly board based due to dispersal of shareholding, hence, the public

in general evinces interest in the financial statements. Apart from the

shareholders there are other persons and bodies who are also interested in

financial results disclosed by the annual reports of the companies. As already

mentioned, such persons and bodies include:

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1. Potential investors

2. Creditors, potential suppliers or other doing business with the company.

3. Debenture holders

4. Credit institutions like bankers.

5. Employee customers who wish to make along standing contact with the

company.

6. Economic and investment analysis

7. Members.

TREND ANALYSIS:

Trend percentages:

The method of trend percentages in useful analytical device

for the management since y substitution of percentage for large amounts, the

clarity and readability are achieved.

Trend percentages are immensely helpful in making

comparative study of the final statements for several years. The method of

calculating trend percentages involves the calculation of percentage relationship

that each item bears to the same item in the base year. The earliest year may be

taken as base year. Each item of the base year is taken as 100 and on the basis

the percentage for each of the item of each year is calculated.

Least Square Method:

This method is widely used in practised. It is a mathematical

method and with the help of a trend line fitted to the data in such a manner by

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using the actual figures of the study period, we have to calculate the trend

values for these periods. Based on this value we can easily forecast the values of

the future period. The method of least square may be used either to fit a straight

line trend or a parabolic trend. The straight line is represented by the equation

Y(C)=A+B(X).

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENT:

An attempt has been made to analyze and interpret the

financial statements of BHEL for the period of 2007-2010. These statements

were prepared on the basis of the data in the balance sheets and profit and loss

accounts of the BHEL for the above period.

RATIO ANALYSIS:

A ratio is a simple mathematical expression. It is a number

expressed in terms of another number, expressing the quantitative relationship

between the two, ratio analysis is the technique of interpretation of financial

statements with the help of various meaningful ratios. Ratios do not add to any

information that is already available, but they show the relationship between

two items in a more meaningful way.

Ratio analysis is a very important tool of financial analysis.

It is the process of establishing a significant relationship between the items of

financial statements to provide a meaningful understanding of the performance

and financial position of the firm. They help us to draw certain conclusions.

Comparison with related facts is the basis of ratio analysis. Ratios may be used

for comparison in any of the following ways.

1. Comparison of a firm with its own performance in the past.

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2. Comparison of one firm with its own performance in the past.

3. Comparison of one firm with another firm in the industry.

4. Comparison of one firm with the industry as a whole.

5. Comparison of an achieved performance with pre-determined standards.

6. Comparison of one department of a concern with other departments.

TYPES OF RATIOS

Liquidity ratio

Capital structure/leverage ratio

Profitability ratio

Activity ratio.

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1.5 Application of available Tools & Techniques for Financial

Analysis of a Company

Financial Analysis is defined as being the process of identifying financial strength and

weakness of a business by establishing relationship between the elements of balance sheet

and income statement. The information pertaining to the financial statements is of great

importance through which interpretation and analysis is made. It is through the process of

financial analysis that the key performance indicators, such as, liquidity solvency,

profitability as well as the efficiency of operations of a business entity may be ascertained,

while short term and long term prospects of a business may be evaluated. Thus, identifying

the weakness, the intent is to arrive at recommendations as well as forecasts for the future of

a business entity.

Financial analysis focuses on the financial statements, as they are a disclosure of a financial

performance of a business entity. “A Financial Statement is an organized collection of data

according to logical and consistentaccounting procedures. Its purpose is to convey an

understanding of some financial aspects of a business firm. It may show assets position at

a moment of time as in the case of balance sheet, or may reveal a series of activities over a

given period of times, as in the case of an income statement.”

Since there is recurring need to evaluate the past performance, present financial position, the

position of liquidity and to assist in forecasting the future prospects of the organization,

various financial statements are to be examined in order that the forecast on the earnings may

be made and the progress of the company be ascertained.

The financial statements are: INCOME STATEMENT, BALANCE SHEET,

STATEMENT OF EARNINGS, STATEMENT OF CHANGES IN FINANCIAL

POSITION AND THE CASH FLOW STATEMENT. The income statement, having been

termed as profit and loss account is the most useful financial statement to enlighten what has

happened to the business between the specified time intervals while showing, revenues,

expenses gains and losses. Balance sheet is a statement which shows the financial position of

a business at certain point of time. The distinction between income statement and the balance

sheet is that the former is for a period and the latter indicates the financial position on a

particular date. However, on the basis of financial statements, the objective of financial

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analysis is to draw informationto facilitate decision making, to evaluate the strength and the

weakness of a business, to determine the earning capacity, to provide insights on liquidity,

solvency and profitability and to decide the future prospects of a business entity.

There are various types of Financial analysis. They are briefly mentioned herein:

External analysis: The external analysis is done on the basis of published financial

statements by those who do not have access to the accountinginformation, such

as, stock holders, banks, creditors, and the general public.

Internal Analysis: This type of analysis is done by finance and accountingdepartment. The

objective of such analysis is to provide the information to the top management, while

assisting in the decision making process.

Short term Analysis: It is concerned with the working capital analysis. It involves the

analysis of both current assets and current liabilities, so that the cash position (liquidity) may

be determined.

Horizontal Analysis: The comparative financial statements are an example of horizontal

analysis, as it involves analysis of financial statements for a number of years. Horizontal

analysis is also regarded as Dynamic Analysis.

Vertical Analysis: it is performed when financial ratios are to be calculated for one year

only. It is also called as static analysis.

An assortment of techniques is employed in analyzing financial statements. They

are: COMPARATIVE FINANCIAL STATEMENTS, STATEMENT OF CHANGES IN

WORKING CAPITAL, COMMON SIZE BALANCE SHEETS AND INCOME

STATEMENTS, TREND ANALYSIS AND RATIO ANALYSIS.

Comparative Financial Statements: It is an important method of analysis which is used to

make comparison between two financial statements. Being a technique of horizontal analysis

and applicable to both financial statements, income statement and balance sheet, it provides

meaningful information when compared to the similar data of prior periods. The comparative

statement of income statements enables to review the operational performance and to draw

conclusions, whereas the balance sheets, presenting a change in the financial position during

the period, show the effects of operations on the assets and liabilities. Thus, the absolute

change from one period to another may be determined.

Statement of Changes in Working Capital: The objective of this analysis is to extract

the information relating to working capital. The amount of net working capital is determined

by deducting the total of current liabilities from the total of current assets. The statement of

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changes in working capital provides theinformation in relation to working capital between

two financial periods.

Common Size Statements: The figures of financial statements are converted to percentages.

It is performed by taking the total balance sheet as 100. The balance sheet items are

expressed as the ratio of each asset to total assets and the ratio of each liability to total

liabilities. Thus, it shows the relation of each component to the whole - Hence, the name

common size.

Trend Analysis: It is an important tool of horizontal analysis. Under this analysis, ratios of

different items of the financial statements for various periods are calculated and the

comparison is made accordingly. The analysis over the prior years indicates the trend or

direction. Trend analysis is a useful tool to know whether the financial health of a business

entity is improving in the course of time or it is deteriorating.

Ratio Analysis: The most popular way to analyze the financial statements is computing

ratios. It is an important and widely used tool of analysis of financial statements. While

developing a meaningful relationship between the individual items or group of items of

balance sheets and income statements, it highlights the key performance indicators, such

as, LIQUIDITY, SOLVENCY AND PROFITABILITY of a business entity. The tool of

ratio analysis performs in a way that it makes the process of comprehension of financial

statements simpler, at the same time, it reveals a lot about the changes in the financial

condition of a business entity.

It must be noted that Financial analysis is a continuous process being applicable to every

business to evaluate its past performance and current financial position. It is useful in various

situations to provide managers the information that is needed for critical decisions. The

process of financial analysis provides theinformation about the ability of a business entity to

earn income while sustaining both short term and long term growth.

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CHAPTER - I

INTRODUCTION

Analysis means establishing a meaningful relationship between

various items of the two financial statements with each other in such a way that

a conclusion is being drawn. By financial statements by means of two

statements

Profit and loss account or Income Statement

Balance Sheet or Position Statement

These are prepared at the end of a given period of time. They are

the indicators of profitability and financial soundness of the business concern.

The term financial analysis is also known as analysis and interpretation of

financial statements. It refers to the establishing meaningful relationship

between various items of the two financial statements i.e. Income statement and

Position statement. It determines financial strength and weakness of the firm.

Analysis of financial statements is an attempt to assess the efficiency and

performance of an enterprise. Thus, the analysis and interpretation of financial

statements is very essential to measure the efficiency, profitability , financial

soundness and future prospects of the business units. Financial analysis serves

the following purposes.

Measuring the Profitability

The main objective of a business is to earn a satisfactory return on

the funds invested in it. Financial analysis helps in ascertaining whether

adequate profits are being earned on the capital invested in the business or not.

It also helps in knowing the capacity to pay the interest.

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Indicating the trend of achievements

Financial statements of the previous years can be compared and

the trend regarding various expenses, purchases, sales, gross profits and net

profit etc can be ascertained. Value of assets and liabilities can be compared and

the future prospects of the business can be envisaged.

Assessing the growth potential of the business

The trend and other analysis of the business provides information

indicating the growth potential of the business.

Comparative position in relation to other firms

The purpose of financial statements analysis is to help the

management to make a comparative study of the profitability of various firms,

engaged in similar businesses. Such comparison also helps the management to

study the position of their firm in respect of sales expenses, profitability and

utilising capital, etc.

Assess overall financial strength

The purpose of financial analysis is to assess the financial

strength of the business. Analysis also helps in taking decisions, whether funds

required for the purchase of the new machines and equipments are provided

from internal sources of the business or not if yes, how much? And also to

assess how much funds have been received from external sources.

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COMPANY VISION,MISSION and OBJECTIVE

VISION:

A world class, innovation, competitive and profitable

engineering enterprise providing total business solutions.

MISSION:

To be the leading engineering enterprise providing quality

products system and services in the field of energy, transportation,

industry, infrastructure and other potential areas.

VALUES :

1. Meeting commitments made to external and internal

customers.

2. Faster learning, creativity and speed of response.

3. Respect for dignity and potential of individuals.

4. Loyalty and pride of the company.

5. Team playing.

6. Zeal to excel.

7. Integrity and fairness in all matters.

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OBJECTIVES

GROWTH:

To ensure a steady growth by enhancing the competitive edge of

BHEL in exiting business, new areas and international operation so as to fulfil

national expectations from BHEL.

PROFITABILITY:

To provide a reasonable and adequate return on capital employed,

primarily through improvements in operational efficiency, capacity utilization

and productivity and generate adequate internal resources to finance the

company growth. Confidence in providing increased value for this money

through international standards of product, quality, performance and superior

customer services.

TECHNOLOGY:

To achieve technology excellence in operations by development of

indigenous technologies to and efficient absorption and adaptation of imported

technologies to suit business needs and priorities and provide a competitive

advantage of the company.

IMAGE:

To fulfil the expectation which stock holders like government as

own employees, customers and the country at large have from BHEL.

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SHAREHOLDING PATTERN OF BHEL

Shareholding Pattern - Bharat Heavy Electricals Ltd.

Holder's Name No of Shares % Share Holding

Promoters 1543452000 63.06%

ForeignInstitutions 394269174 16.11%

FinancialInstitutions 382565498 15.63%

GeneralPublic 53758971 2.2%

NBanksMutualFunds 41888066 1.71%

OtherCompanies 23226795 0.95%

Others 4577534 0.19%

ForeignNRI 3861962 0.16%

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CHAPTER- II

COMPANY PROFILE


The vital role played by the BHEL today in the country is the mark of

it continuous efforts to improve the service in the nation by consultancy,

manufacturing and offering services in power sector.

This success story of BHEL however goes back to 1956 when its first

plant was set up in BHOPAL. Three more major plants followed in

HARIDWAR, HYDERABAD and THIRUCHIRAPALLI flowed this. These

plants have been the core of BHEL’S efforts to grow and diversify and become

one of the most integrated power and industrial equipment manufacturers in the

world. The company now has 14 manufacturing units,8 service centres and 4

power sector regional centres, besides project sites spread all over India and

abroad.

BHEL manufactures over 180 products under 30 major product groups

and meets the needs of core sector like power, industry, transmission, defence,

telecommunications, oil business etc. Its products have established an enviable

reputation for high quality and reliability. This is due to the emphasis placed all

along on design, engineering and manufacturing to international standards by

acquiring and adopting some of the best technologies developed in its own

R&D centres. BHEL has acquired ISO 9000 certification for environments.

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BHEL caters to the needs of different sectors by designing and manufacturing

according to the need of its client in power sector.

PRODUCTS OF BHEL

BHEL manufactures a wide range of power plant equipments and also caters

to the industry sector.

1. Gas turbines

2. Steam turbines

3. Compressors

4. Turbo generators.

5. Pumps

6. Pulverizes

7. Switchgears

8. Oil rigs

9. Electrics for urban transportation system

10.Telecommunication.

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CHAPTER - III

ABOUT MY PROJECT:

The finance function form production, marketing and other

functions. Yet the function themselves can be readily identified. The function of

raising funds, inverting them in assets and distributing returns earned from

assets to shareholder respectively. The finance functions are:

Investment or long term asset mix decision

Financing or capital mix decision

Dividend or profit allocation decision

Liquidity or short term asset mix decision.

OBJECTIVES OF THE STUDY:

1. To calculate the important financial ratio of the organization as a part of

the ratio analysis thereby to understand the change and treads in the firm

financial position.

2. To access the performance of the BHEL on the basis of earnings and also

to evaluate the solvency position of the company.

3. To identify the financial strengths and weaknesses of the organization.

4. To give appropriate suggestion to the investors. To help them to make

over,

5. Informed decision.

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SCOPE OF THE STUDY:

The scope and period of the study is restricted to the following.

1. The scope is limited to the operation in the BHEL.

2. The information obtained from the primary and secondary data was

limited to the BHEL

3. The key information performance indicated is taken from 2007-2010.

4. The profit and loss, the balance sheet was on the last 3 years.

5. Comparison analysis was done in comparison of the sister units.

LIMITATIONS OF STUDY:

1. The study is confined to a period of last 3 years.

2. As most of the data is from secondary sources, hence the accuracy is

limited.

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CHAPTER -IV

FINANCIAL STATEMENTS OF BHEL

Balance Sheet of BHEL

Parameter MAR'15 ( Cr.)₹

MAR'14( Cr.)₹

YoY%Change

EQUITY AND LIABILITIES

Share Capital 489.52 489.52 0.00%

Share Warrants & Outstandings

Total Reserves 33,595.08

32,557.53 3.19%

Shareholder's Funds 34,084.60

33,047.05 3.14%

Long-Term Borrowings 0.00 0.00 0.00%

Secured Loans 0.00 0.00 0.00%

Unsecured Loans 61.00 104.77 -41.78%

Deferred Tax Assets / Liabilities -2,220.73 -1,968.95 12.79%

Other Long Term Liabilities 4,657.18 5,835.26 -20.19%

Long Term Trade Payables 701.66 764.91 -8.27%

Long Term Provisions 12,664.67

15,503.88 -18.31%

Total Non-Current Liabilities 15,863.78

20,239.87 -21.62%

Current Liabilities

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Trade Payables 8,798.94 8,717.84 0.93%

Other Current Liabilities 9,123.31 11,445.32 -20.29%

Short Term Borrowings 0.00 2,550.00 -100.00%

Short Term Provisions 4,285.23 2,829.59 51.44%

Total Current Liabilities 22,207.48

25,542.75 -13.06%

Total Liabilities 72,155.86

78,829.67 -8.47%

ASSETS

Non-Current Assets 0.00 0.00 0.00%

Gross Block 12,588.80

12,050.49 4.47%

Less: Accumulated Depreciation 8,450.53 7,360.39 14.81%

Less: Impairment of Assets 0.00 0.00 0.00%

Net Block 4,138.27 4,690.10 -11.77%

Lease Adjustment A/c 2.25 2.84 -20.77%

Capital Work in Progress 500.50 622.01 -19.54%

Intangible assets under development 17.30 20.11 -13.97%

Pre-operative Expenses pending 0.00 0.00 0.00%

Assets in transit 0.00 0.00 0.00%

Non Current Investments 417.67 420.17 -0.59%

Long Term Loans & Advances 18,542.16

21,055.28 -11.94%

Other Non Current Assets 0.17 0.32 -46.88%

Total Non-Current Assets 23,618.3 26,810.8 -11.91%

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2 3

Current Assets Loans & Advances

Currents Investments 0.00 0.00 0.00%

Inventories 10,101.66 9,797.55 3.10%

Sundry Debtors 26,223.50

28,071.92 -6.58%

Cash and Bank 9,812.70 11,872.93 -17.35%

Other Current Assets 176.96 254.47 -30.46%

Short Term Loans and Advances 2,222.72 2,021.97 9.93%

Total Current Assets 48,537.54

52,018.84 -6.69%

Net Current Assets (Including Current Investments) 26,330.06

26,476.09 -0.55%

Total Current Assets Excluding Current Investments

48,537.54

52,018.84 -6.69%

Miscellaneous Expenses not written off 0.00 0.00 0.00%

Total Assets 72,155.86

78,829.67 -8.47%

Contingent Liabilities 10,305.34

10,460.62 -1.48%

Total Debt 117.83 2,722.45 -95.67%

Book Value (in )₹ 139.26 135.02 3.14%

Adjusted Book Value (in )₹ 139.26 135.02 3.14%

View last 5 years Financial Summary

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http://profit.ndtv.com/stock/bharat-heavy-electricals-ltd_bhel/financials-historical


Profit & Loss A/c of BHEL

Parameter MAR'15( Cr.)₹

MAR'14( Cr.)₹

Change %

Gross Sales 31,104.00 40,451.60 -23.11%

Less :Inter divisional transfers 0.00 0.00 0.00%

Less: Sales Returns 0.00 0.00 0.00%

Less: Excise 1,145.58 1,627.87 -29.63%

Net Sales 29,958.42 38,823.73 -22.83%

EXPENDITURE:

Increase/Decrease in Stock -338.04 1,053.65 -132.08%

Raw Materials Consumed 13,703.99 17,141.26 -20.05%

Power & Fuel Cost 554.57 603.52 -8.11%

Employee Cost 5,447.91 5,930.68 -8.14%

Other Manufacturing Expenses 4,410.43 5,291.14 -16.64%

General and Administration Expenses 457.60 475.49 -3.76%

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Selling and Distribution Expenses 345.14 405.70 -14.93%

Miscellaneous Expenses 4,980.99 4,683.81 6.34%

Expenses Capitalised 0.00 0.00 0.00%

Total Expenditure 29,562.59 35,585.25 -16.92%

PBIDT (Excl OI) 395.83 3,238.48 -87.78%

Other Income 2,913.15 2,891.37 0.75%

Operating Profit 3,308.98 6,129.85 -46.02%

Interest 91.65 132.63 -30.90%

PBDT 3,217.33 5,997.22 -46.35%

Depreciation 1,077.32 982.92 9.60%

Profit Before Taxation & Exceptional Items 2,140.01 5,014.30 -57.32%

Exceptional Income / Expenses 0.00 0.00 0.00%

Profit Before Tax 2,140.01 5,014.30 -57.32%

Provision for Tax 720.72 1,553.52 -53.61%

PAT 1,419.29 3,460.78 -58.99%

Extraordinary Items 0.00 0.00 0.00%

Adj to Profit After Tax 0.00 -81.25 100.00%

Profit Balance B/F 1,171.25 1,102.12 6.27%

Appropriations 2,590.54 4,481.65 -42.20%

Equity Dividend (%) 58.00 141.50 -59.01%

Earnings Per Share (in )₹ 5.80 14.14 -58.99%

Book Value (in )₹ 139.26 135.02 3.14%

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CASH FLOW STATEMENT

Parameter MAR'15( Cr.)₹

MAR'14( Cr.)₹

Change %

Net Profit Before Taxes 2,140.01 5,014.30 -57.32%

Adjustments for Expenses & Provisions 1,511.09 2,169.17 -30.34%

Adjustments for Liabilities & Assets -1,845.72 -534.03 -245.62%

Cash Flow from operating activities 775.48 4,518.14 -82.84%

Cash Flow from investing activities 464.31 -168.07 376.26%

Cash Flow from financing activities -3,300.02 -209.19 -1477.52%

Effect of exchange fluctuation on translation reserve 0.00 0.00 0.00%

Net increase/(decrease) in cash and cash equivalents

-2,060.23 4,140.88 -149.75%

Opening Cash & Cash Equivalents 11,872.93 7,732.05 53.55%

Cash & Cash Equivalent on Amalgamation / Take over / Merger 0.00 0.00 0.00%

Cash & Cash Equivalent of Subsidiaries under liquidations 0.00 0.00 0.00%

Translation adjustment on reserves / op cash balalces frgn subsidiaries 0.00 0.00 0.00%

Effect of Foreign Exchange Fluctuations 0.00 0.00 0.00%

Closing Cash & Cash Equivalent 9,812.70 11,872.93 -17.35%

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Ratio Analysis

Parameter MAR'15 MAR'14

Operational & Financial Ratios:

Earnings Per Share (Rs) 5.80 14.14

DPS(Rs) 1.16 2.83

Book NAV/Share(Rs) 139.26 135.02

Margin Ratios:

Yield on Advances 0.00 0.00

Yield on Investments 0.00 0.00

Cost of Liabilities 0.00 0.00

NIM 0.00 0.00

Interest Spread 0.00 0.00

Performance Ratios:

ROA(%) 1.88 4.42

ROE(%) 4.23 10.90

ROCE(%) 6.38 15.20

Efficiency Ratios:

Cost Income Ratio 0.00 0.00

Core Cost Income Ratio 0.00 0.00

Operating Costs to Assets 0.00 0.00

Capitalisation Ratios:

Tier 1 ratio 0.00 0.00

Tier 2 ratio 0.00 0.00

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CAR 0.00 0.00

Valuation Parameters:

PER(x) 40.52 13.92

PCE(x) 23.03 10.84

Price / Book(x) 1.69 1.46

Yield(%) 0.49 1.44

EV / Net Sales(x) 1.60 1.01

EV / Core EBITDA(x) 14.45 6.37

EV / EBIT(x) 21.42 7.58

EV / CE(x) 0.66 0.49

M Cap / Sales 1.92 1.24

Growth Ratio:

Core Operating Income Growth -30.90 5.88

Operating Profit Growth -46.02 -41.68

Net Profit Growth -58.99 -47.68

BVPS Growth 3.14 8.55

Advances Growth 0.00 0.00

EPS Growth(%) -58.99 -47.68

Liquidity Ratios:

Loans / Deposits(x) 0.00 0.00

Total Debt / Equity(x) 0.00 0.00

Current Ratio(x) 0.00 0.00

Quick Ratio(x) 0.00 0.00

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Total Debt / Mcap(x) 0.00 0.00

Net NPA in Rs. Million 0.00 0.00

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CHAPTER -V

CONCLUSIONS AND OBSERVATION:

1. The current ratio of BHEL is decreasing year by year . In the year 2000-

2001 it was 2.41 and during the year 2008-2009 it has gone down to 1.2

later in the next financial year 2009-2010 it has gone up to 1.46, so the

company should concentrate effectively on the management of Current

Assets and Current Liabilities.

2. The Net Working Capital of BHEL is good for almost in range for each

and every year. It is always in the ideal ratio for every organization.

3. The BHEL is using the moving average method in valuation of stock.

4. The debtors constitute nearly 50% of the Total Current Assets. For the

Company it is difficult to manage the accounts receivables. The company

should collect debts as quickly as possible.

5. The company has to exercise cost of control and cost of reduction

techniques to increase its profitability.

6. The debtors turn over ratio in 2005-2006 is 1.97. the ratio has increased

than previous years except for 2003-2004, which had 2.10. the decreasing

ratio shows the inefficient management. They should concentrate more on

the collection of the debts.

7. The return on investment ratio of the BHEL is 59.40 in 2005-2006. It has

increased when compared to previous year’s ratios. It is beneficial to

investors who are interested to know the profits earned by the company.

8. The investment in loans and advances should be minimized to possible

extent.

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9. Effective internal control system should be established. So that it can

have control over all aspects of the company.

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BIBILOGRAPHY:

http://www.bhel.com/financial_information/index.php

http://www.studyfinance.com/lessons/workcap

www.bizsearchpapers.com

http://www.antiessays.com/free-essays/9076.html

http://www.bhelhyderabad.com/bhel_hyderabad_unit.htm

http://en.wikipedia.org/wiki/Bharat_Heavy_Electricals_Limited

Financial Management –I M Pandey.

Accounting for Managers-Jelsy Joseph Kuppapally.

Financial statement analysis - Gokul Sinha.

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http://www.antiessays.com/free-essays/9076.html

http://www.bizsearchpapers.com/

http://www.studyfinance.com/lessons/workcap

http://www.bhel.com/financial_information/index.php

Hemlata a Project Report on Financial Statement Analysis(BHEL)

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