10 YEAR COMPARATIVE ANALYSIS

Presented to: Presented by:

PROF. Manju Lamba Karmveer singh

PGDM ”A”

MANAGEMENT

• Management• Mr. B. Vijayakumar-Chairman Cum Managing Director• Mr. P.Prabakaran-Deputy Managing Director• Board of Directors:• 1. Mr. B. Vijayakumar• 2. Mr. P.Prabakaran• 3. Mr. P.Balasubramanian• 4. Mr. S.Sivakumar• 5. Mr. V.Govindarajulu• 6. Mr. P.Shanmugasundaram• 7. Smt. Rajsri Vijayakumar• 8 . Mr. R.Vidhya Shankar• 9. Dr.T.Balaji Naidu• 10. Mr.v.Rajvirdhan• General Manager and Company Secretary• Mr. M.Lakshmi Kanth Joshi• Key ExecutivesMr. P. Prabakaran Deputy Managing• Mr. N. Rengaraj Chief Financial Officer

Company Overview:-

• The automobile industry largely comprises two wheeler, three wheeler and four wheeler vehicles. Four wheelers may be further segmented into passenger cars, utility vehicles (UV), commercial vehicles (CV) and tractors.

• The manufacturers of these vehicles are often referred to Original Equipment (Vehicle) Manufacturers (OEM). The OEMs are responsible for providing the final shape to vehicles and making it viable for use. Initially, the OEMs manufactured vehicles from scratch i.e. including the components that are assembled to form a vehicle.

• Over the years, the same model proved uneconomical for OEMs and hence the manufacturing of auto components was outsourced by them to companies that focused purely on manufacturing of automotive components.

• Since then, the performance of auto components industry has been directly related to the OEMs preferences and sourcing patterns. Today, the auto components industry is segmented into Drive Transmission and steering parts, Engine parts, Suspension and braking parts, Equipment, Electrical Parts, Chassis and other interior / exterior components.

OBJECTIVES

• The following are the objectives-• To study the financial position of the company• To apply marginal costing concept on companies

financial data.• To analyze the company’s financial position

before recession and after recession• To find out the magnitude of relationship

between sales and profit, variable cost and profit, and, total cost and profit.

Research Methodology

• Since source of primary data directly relevant was scare. It was decided that the analysis had to be secondary data analysis, collected directly from the Internet, News Paper, & Magazine. This is an exploratory research.

• SAMPLE COMPANY: LG Balakrishnan & Brothers

• SAMPLE SIZE: 10 years cost sheet statement of the company.

• DATA COLLECTION: Data is collected from secondary sources like capitaline database, Internet, Newspaper, & Magazine.

• SOFTWARE USED: Microsoft Excel, MS word.

• ANALYSIS: The analysis is been done through table and Line Chart.

LG balakrishnan before recession recession period after recession

Figures in Crs

S.R.NOParticula

r 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Yr-2 Yr-3 Yr-4 Yr-5 Yr-6 Yr-7 Yr-8 Yr-9 Yr-10 yr-11

2Gross Revenue 232.89 276.93 382.25 427.09 513.82 560.43 547.29 556.1 732.59 941.07

Revenue Growth % 0.00 0.19 0.38 0.12 0.20 0.09 -0.02 0.02 0.32 0.28

3

NET SALES (A) 229.75 270.6 368.92 416.13 475.58 549.87 507.6 552.38 709.52 905.13

Total 229.75 270.6 368.92 416.13 475.58 549.87 507.6 552.38 709.52 905.13

4VARIABLE COST (B)

Raw Materials 109.96 131.72 194.45 207.95 250.37 279.89 255.6 271.77 374.94 498.65

Power & Fuel cost 9.14 9.98 14.45 17.08 20.18 23.52 17.1 16.3 24.71 31.99

Employe Cost 21.73 22.07 24.33 28.96 37.99 44.98 44.62 44.18 64.1 84.41

Other Manufacturing Expenses 35 43.88 62.5 76.17 79.66 87.25 92.29 96.12 122.9 153.91

Selling & Administration Expenses 20.84 25.22 27.06 30.39 37.42 45.78 44.22 42.63 52.62 62.13

Miscellaneous Expenses 4.53 3.06 4.13 5.71 9.69 3.93 3.07 6.05 5.37 6.05

Interest 7.34 8.46 15.03 19.54 22.19 28.08 24.69 20.59 15.2 17.44

Total 208.54 244.39 341.95 385.8 457.5 513.43 481.59 497.64 659.84 854.58

5CONTRIBUTION © 21.21 26.21 26.97 30.33 18.08 36.44 26.01 54.74 49.68 50.55

6 FIXED COST (D)

Depreciation 10.59 12.51 16.23 19.15 25.16 28.95 20.69 21.72 25.45 28.32

Total 19.14 23.55 32.83 40.73 46.27 56.11 58.86 69.47 64.23 75.72

7

PROFIT BEFORE TAX (E) 2.07 2.66 -5.86 -10.4 -28.19 -19.67 -32.85 -14.73 -14.55 -25.17

PBT Margin % 0.00 0.29 -3.20 0.77 1.71 -0.30 0.67 -0.55 -0.01 0.73

8 TAXES (F1)

Tax 4.3 6.5 0 0 0 0 0 0 0 0

Fringe Benefit tax 0 0 0 0.44 0.48 0.49 0.4 0 0 0

Deferred Tax -0.09 -0.08 2.68 5.71 0.97 -1.75 -1.63 10.53 -7.93 -0.95

Total 4.21 6.42 2.68 6.15 1.45 -1.26 -1.23 10.53 -7.93 -0.95

(F2)

Dividend 2.16 2.36 6.8 2.36 4.21 2.75 4.71 5.1 7.85 8.63

Preference Dividend 0 0 0 0 0 0 0 0 0 0

Extraordinary Items 0.37 0.16 1.58 0.61 1.7 -0.5 25.82 0.75 0.03 0.05

Equity Dividend 55 30 80 30 50 35 60 65 100 110

Total 57.53 32.52 88.38 32.97 55.91 37.25 90.53 70.85 107.88 118.68

Total (F) 61.74 38.94 91.06 39.12 57.36 35.99 89.3 81.38 99.95 117.73

9

PROFIT AFTER TAX (G) -59.67 -36.28 -96.92 -49.52 -85.55 -55.66 -122.15 -96.11 -114.5 -142.9

PAT Margin % 0 -0.3919893 1.6714443 -0.4890631 0.7275848 -0.3493863 1.1945742 -0.2131805 0.1913433 0.2480349

10 P/V Ratio 9.23% 9.69% 7.31% 7.29% 3.80% 6.63% 5.12% 9.91% 7.00% 5.58%

11Contribution Per Unit (H)

12BEP (Amount) 207.33 243.14 449.08 558.82 1217.10 846.69 1148.69 701.02 917.32 1355.81

BEP Ratio to Sales % 90.24% 89.85% 121.73% 134.29% 255.92% 153.98% 226.30% 126.91% 129.29% 149.79%

BEP (Quantity)

13MARGIN OF SAFETY 22.42 27.46 -80.16 -142.69 -741.52 -296.82 -641.09 -148.64 -207.80 -450.68

Margin of safety ratio to sales % 9.76% 10.15% -21.73% -34.29% -155.92% -53.98% -126.30% -26.91% -29.29% -49.79%

0

100

200

300

400

500

600

700

800

900

1000

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

SALES

SALES

-0.05

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

REVENUE GROWTH %

REVENUE GROWTH %

CONTRIBUTION

0

10

20

30

40

50

60

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Series1

PV Ratio

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0.1

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Series1

PBT

-35

-30

-25

-20

-15

-10

-5

0

5

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Series1

PBT margin %

-3.5

-3

-2.5

-2

-1.5

-1

-0.5

0

0.5

1

1.5

2

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Series1

BEP

0

200

400

600

800

1000

1200

1400

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Series1

period 1

2002-03 2003-04 2004-05 2005-06 2006-07

Total Sales 229.75 270.6 368.92 416.13 475.58

Total variable cost 208.54 244.39 341.95 385.8 457.5

Contribution 21.21 26.21 26.97 30.33 18.08

Total fixed cost 19.14 23.55 32.83 40.73 46.27

Profit Before Tax 2.07 2.66 -5.86 -10.4 -28.19

Profit After Tax -59.67 -36.28 -96.92 -49.52 -85.55

P/V Ratio 0.092318 0.096859 0.073105 0.072886 0.038017

BEP (Amount) 207.3274 243.1374 449.0784 558.8188 1217.095

Margin of Safety 22.42256 27.46265 -80.1584 -142.689 -741.515

Mean Median

352.196 368.92

327.636 341.95

24.56 26.21

32.504 32.83

-7.944 -5.86

-65.588 -59.67

0.074637 0.073105

535.0915 449.0784

-182.895 -80.1584

Period 2

2007-08 2008-09 2009-2010 2010-11 2011-12

549.87 549.87 549.87 549.87 549.87

513.43 481.59 497.64 659.84 854.58

36.44 26.01 54.74 49.68 50.55

56.11 58.86 69.47 64.23 75.72

-19.67 -32.85 -14.73 -14.55 -25.17

-55.66 -122.15 -96.11 -114.5 -142.9

0.06627 0.051241 0.099098 0.070019 0.055848

846.6851 846.6851 846.6851 846.6851 846.6851

-296.815 -296.815 -296.815 -296.815 -296.815

Mean Median

549.87 549.87

601.416 513.43

43.484 49.68

64.878 64.23

-21.394 -19.67

-106.264 -114.5

0.068495 0.06627

846.6851 846.6851

-296.815 -296.815

CORRELATION

YEAR SALES PROFIT

2002-03 229.75 -59.67

2003-04 270.6 -36.28

2004-05 368.92 -96.92

2005-06 416.13 -49.52

2006-07 475.58 -85.55

2007-08 549.87 -55.66

2008-09 507.6 -122.15

2009-10 552.38 -96.11

2010-11 709.52 -114.5

2011-12 905.13 -142.9

-0.76648

CORRELATION

YEAR PV ratio PROFIT AFTER TAX

2002-03 0.092318 -59.67

2003-04 0.096859 -36.28

2004-05 0.073105 -96.92

2005-06 0.072886 -49.52

2006-07 0.038017 -85.55

2007-08 0.06627 -55.66

2008-09 0.051241 -122.15

2009-10 0.099098 -96.11

2010-11 0.070019 -114.5

2011-12 0.055848 -142.9

0.48223

SALES PROFIT229.75 2.07

270.6 2.66368.92 -5.86416.13 -10.4475.58 -28.19549.87 -19.67

507.6 -32.85552.38 -14.73709.52 -14.55905.13 -25.17

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.651432366

R Square 0.424364128

Adjusted R Square 0.352409644Standard Error 9.76411723Observations 10

ANOVAdf SS MS F Significance F

Regression 1 562.2724077 562.2724 5.897675 0.041297946Residual 8 762.7038823 95.33799Total 9 1324.97629

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%

Intercept 4.931538092 8.641464765 0.570683 0.583884 -14.99571537 24.85879156 -14.99571537 24.85879156X Variable 1 -0.03931525 0.016189022 -2.42851 0.041298 -0.076647199 -0.001983296 -0.076647199 -0.001983296

PROFIT PV ratio

2.07 0.092317737

2.66 0.096858832

-5.86 0.07310528

-10.4 0.072885877

-28.19 0.038016737

-19.67 0.066270209

-32.85 0.051241135

-14.73 0.099098447

-14.55 0.070019168

-25.17 0.055848331

SUMMARY OUTPUT

Regression Statistics

Multiple R 0.826696881

R Square 0.683427733

Adjusted R Square 0.6438562

Standard Error 0.012015927

Observations 10

ANOVA

df SS MS F Significance F

Regression 1 0.002493585 0.002494 17.27069 0.003183506

Residual 8 0.00115506 0.000144

Total 9 0.003648645

Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%

Intercept 0.09168991 0.006155188 14.89636 4.07E-07 0.077496021 0.105883799 0.077496021 0.105883799

X Variable 1 0.001371855 0.000330106 4.155802 0.003184 0.000610629 0.00213308 0.000610629 0.00213308

CONCLUSION

Finally after the study we have found that during 2001 to 2010 there are some fluctuations present in the net sales, variable cost, profit, and so on due to some economic, social, legal and environmental factors. Overall we can say that profit has changed during the period due to sales , change in variable cost. It shows that profit of company based on the sales etc.