35 - Supreet - BlueStar

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Analysis for B

2005- 2009

Contents of the spreadsheet

Balance Sheet

Profit and loss account

Cash Flow Yearly and trend analysis

Ratio analysis

Final analysis and conclusion



uestar

Submitted to:

Dr. Karamjeet Singh

Submitted by:

Name Supreet Thind

Roll No. 35

Class MBA Biotech (A)

Date of Submission:

08.03.2010



Balance sheet BLUESTAR from 2005-2009in Rs. Cr.

2005 2006 2007 2008 2009

Sources Of Funds

Total Share Capital 17.99 17.99 17.99 17.99 17.99

Equity Share Capital 17.99 17.98 17.99 17.99 17.99

Reserves 130.79 155.09 195.34 245.92 349.5Networth 148.78 173.08 213.33 263.91 367.49

Secured Loans 35.91 40.57 39.05 36.29 22.52

Unsecured Loans 1.37 35.3 50 0.25 1.08

Total Debt 37.28 75.87 89.05 36.54 23.6

Liabilities 186.06 248.95 302.38 300.45 391.09

Application Of Funds

Gross Block 164.21 198.09 231.17 272.94 332.87

Less: Accum. Depreciation 87.28 100.95 116.73 134.84 144.92

Net Block 76.93 97.14 114.44 138.1 187.95

Capital Work in Progress 7.28 11.09 2.41 18.09 24.79

Investments 5.18 5.18 5.3 4.57 4.38

Inventories 102.66 149.84 188.08 273.49 207.3

Sundry Debtors 195.77 238.85 350.68 483.74 643.08

Cash and Bank Balance 2.19 2.07 3.81 1.91 4.8

Total Current Assets 300.62 390.76 542.57 759.14 855.18

Loans and Advances 68.92 90.65 85.65 257.49 292.68

Fixed Deposits 0.29 0.29 0.8 0.76 0.85

Total CA, Loans & Advances 369.83 481.7 629.02 1,017.39 1,148.71

Current Liabilities 255.64 321.38 352.21 638.25 672.97

Provisions 21.93 28.04 98.83 240.87 302.37

Total CL & Provisions 277.57 349.42 451.04 879.12 975.34

Net Current Assets 92.26 132.28 177.98 138.27 173.37

Miscellaneous Expenses 4.42 3.26 2.25 1.42 0.6

Assets 186.07 248.95 302.38 300.45 391.09

Contingent Liabilities 41.14 49.39 65.92 123.12 47.7

Book Value (Rs) 82.71 96.23 23.72 29.34 40.86



Profit and loss Account of BLUESTAR from

2005-2009

2005 2006 2007 2008 2009

Income

Sales Turnover 916.88 1,171.50 1,594.58 2,221.59 2,552.29

Excise Duty 0 0 0 0 0

Net Sales 916.88 1,171.50 1,594.58 2,221.59 2,552.29

Other Income 9.17 3.12 9.72 45.8 4.75

Stock Adjustments 26.96 28.6 26.85 56.39 -34.58

Total Income 953.01

Expenditure

Raw Materials 743.99 936.47 1,269.55 1,747.32 1,915.15

Power & Fuel Cost 3.81 4.51 5.83 7.04 7.43

Employee Cost 72.55 88.28 123.16 154.81 182.73

1.3 1.59 2.37 2.19 2.31

Selling and Admin Expenses 49.84 62.28 81.67 105.05 107.69Miscellaneous Expenses 13.56 19.33 25.95 37.78 38.42

Total Expenses 885.05

Operating Profit 58.79 87.64 112.9 223.79 263.98

PBDIT 67.96 90.76 122.62 269.59 268.73

Interest 3.21 5.72 9.55 7.56 13.55

PBDT 64.75 85.04 113.07 262.03 255.18

Depreciation 12.42 15.99 20.9 21.97 25.88

Profit Before Tax 52.33 69.05 92.17 240.06 229.3

Extra-ordinary items 0.26 0.03 0.42 0.14 8.95

PBT (Post Extra-ord Items) 52.59 69.08 92.59 240.2 238.25 Tax 13.28 20.19 21.42 66.11 57.93

Reported Net Profit 39.16 48.9 71.18 174.09 180.29

Total Value Addition 141.05 175.99 238.98 306.87 338.59

Equity Dividend 17.99 21.58 26.98 62.96 62.96

Corporate Dividend Tax 2.56 3.03 3.94 10.7 10.7

Per share data (annualised)

Shares in issue (lakhs) 179.87 179.84 899.36 899.36 899.36

Earning Per Share (Rs) 21.77 27.19 7.91 19.36 20.05

Equity Dividend (%) 100 120 150 350 350

Book Value (Rs) 82.71 96.23 23.72 29.34 40.86

Cr.

2 5 8 6

Expenses

6 3 9 3



Cash flow of BLUESTAR from 2005-2009

2005 2006 2007 2008 2009

Net Profit Before Tax 52.44 69.09 92.6 242.02 238.22

Net Cash From Operating Activities 15.34 18.36 60.12 133.78 169.72

Net Cash (used in)/from

-20.98 -36.64 -23.72 -75.17 -80.75Investing Activities 5.69 18.17 -34.16 -60.55 -86

0.05 -0.11 2.24 -1.93 2.98

Opening Cash & Cash Equivalents 2.43 2.48 2.37 4.61 2.67

Closing Cash & Cash Equivalents 2.48 2.37 4.61 2.67 5.65

Cr.

Activities

Net (decrease)/increase In Cash andCash Equivalents



Yearly and trend analysis BLUESTAR from

2005-2009

Yearly Results in Rs. Cr.

2005 2006 2007 2008 2009Sales Turnover 920.77 1,174.56 1,601.28 2,233.04 2,569.09

Other Income 10.15 4.06 6.13 37.05 4.95

Total Income 930.92 1,178.62 1,607.41 2,270.09 2,574.04

Total Expenses 862.92 1,087.88 1,484.37 1,998.55 2,296.39

Operating Profit 57.85 86.68 116.91 234.49 272.7

Gross Profit 68 90.74 123.04 271.54 277.65

Interest 3.21 5.72 9.55 7.56 13.55

PBDT 64.79 85.02 113.49 263.98 264.1

Depreciation 12.35 15.93 20.9 21.97 25.88

PBT 52.44 69.09 92.59 242.01 238.22

Tax 13.28 20.19 21.41 67.92 57.93

Net Profit 39.16 48.9 71.18 174.09 180.29

Earnings Per Share 21.77 27.18 7.91 19.35 20.04

Equity 17.99 17.99 17.99 17.99 17.99

Reserves 130.43 154.72 194.98 -- 349.14

Face Value 10 10 2 2 2

Total Current Assets 300.62 390.76 542.57 759.14 855.18

Total Assets 186.07 248.95 302.38 300.45 391.09

Total Liabilities 186.06 248.95 302.38 300.45 391.09

2005Trend analysis in percentage

2005 2006 2007 2008 2009

sales turnover 100.00 127.56 173.91 242.52 279.02

net profit 100.00 124.87 181.77 444.56 460.39

current assets 100.00 129.98 180.48 252.52 284.47

total assets 100.00 133.79 162.51 161.47 210.18

total liabilities 100.00 133.80 162.52 161.48 210.20

base year as



Ratio Analysis of BLUESTAR from 2005-2009

YEARS

Profitability RatiosOperating Profit Margin(%) 6.17 7.28 6.92

Profit Before Interest And Tax Margin(%) 5.83 6.21 6.24Gross Profit Margin(%) 21.53 21.79 21.81

Return On Capital Employed(%) 29.85 30.03 33.64

DU-PONT ANALYSIS

Net Profit Margin(%) 4.11 4.06 4.36

Asset turnover 2.58 2.50 2.59

Return on asset 10.59 10.15 11.32

Liquidity ratiosCurrent Ratio 1.18 1.22 1.54

Quick Ratio 0.77 0.75 1.01cash ratio 0.01 0.01 0.01

debtor turnover ratio 4.68 4.90 4.55

average debt collection period (days) 76.87 73.40 79.17

inventory turnover 8.62 7.42 8.02

inventory holding period (Days) 41.76 48.49 44.88

OPERATING CYCLE (days) 118.62 121.89 124.06

Solvency RatiosDebt Equity Ratio 2.07 4.22 4.95

Liabilities to equity ratio 16.28 22.09 24.53Interest Cover 17.30 13.07 10.65

Equity ratio 0.05 0.04 0.03

fixed asset to net worth ratio 4.28 5.40 6.36

Capital market ratiosEarnings Per Share 21.77 27.19 7.91

Book Value 82.71 96.23 23.72

Investment Valuation Ratios

Face Value 10.0 10.0 2.0Dividend Per Share 10.0 12.0 3.0

Operating Profit Per Share (Rs) 32.7 48.7 12.6

Free Reserves Per Share (Rs) 72.7 86.2 21.7

dividend payout ratio 0.5 0.4 0.4



2008 2009

9.63 10.47

10.66 9.6324.50 23.78

82.42 62.10

7.49 7.15

2.28 2.20

17.11 15.69

1.19 1.27

0.76 0.960.00 0.01

4.59 3.97

78.39 90.71

7.51 10.87

47.93 33.11

126.32 123.82

2.03 1.31

37.51 38.7232.75 17.92

0.02 0.02

7.68 10.45

19.36 20.05

29.34 40.86

2.0 2.07.0 7.0

24.9 29.4

27.3 38.9

0.4 0.3



1. TREND ANALYSIS of important 5 parameters

The trend analysis of 5 parametres was done which are as follow:

it's measure has been increasing. The increase in liabilities alone cannot be a very go

measure to evaluate solvency. We need to see its relation vis-a vis assets which can

seen in solvency ratios.

duration taken this measure has been increasing one can say that the company is gro

in size. But here as well we need to evalute its relation with liabilities as well

company is operating. As we see an increasing trend wecan say that company is

increaseing its domain of working.

and larger turnover of the company.

2. RATIO ANALYSISProfitability Ratios

1operating profit margin

(i) total liablities: as it is an indicator of firms solvency and we can see in the 5 year

(ii)total assets: its depicts change or growth in volume or size of company. As in the

(iii) current assets: as they form a part of working capital this tells us how large the

(iv) sales : the rise in this domain depicts growth. Higher sales depicts higher opersti

2005 2006 2007 2008 2009

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

1400.00

1600.00

Trend Analysis

total liabilities

total assets

current assets

net profit

sales turnover

Year

P e r v e n

t a g e

2.00

4.00

6.00

8.00

10.00

12.00

Operating Profit Margin(%)

Operating ProfitMargin(%)



expenses associated with their normal business operations.A good operating margin i

needed for a company to be able to pay for its fixed costs, such as interest on debt.

As we can see a rising trend in this case hence we can say that company is working w

efficiency. A dip in 2007 in the ratio colud be seen which might be dur to rise in raw

material or other operating expenses2PBIT margin

A high rise is seen in 2008. This could probably be becasuse rise in sales or other inco

This is followed by a dip in 2009 which could be accounted to recession and related is

3 Gross profit margin

Gross profit margin is a financial ratio used to assess the profitability of a firm's core

activities, excluding fixed costs. It is a measure of how well each Re of a company's

revenue is available to meet expenses and profits after paying for the goods or servic

that were sold.It indicates the relationship between net sales revenue and the cost o

goods sold.A high gross profit margin indicates that a business can make a reasonabl

profit on sales, as long as it keeps overhead costs in control. As in operating profit ma

a rise in 2008 is seen which indicates efficient control in overall cost.

4 return on capital employed

Operating profit marginindicates how effective a company is at controlling the costs a

2005 2006 2007 2008 2009

0.00

2005 2006 2007 2008 2009

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Profit Before Interest And Tax Marg

Profit BeforeInterest And TaxMargin(%)

2005 2006 2007 2008 2009

20.00

21.00

22.00

23.00

24.00

25.00

Gross Profit Margin(%)

Gross ProfitMargin(%)



It is a measure of the returns that a company is realising from its capital employed. It

commonly used as a measure for comparing the performance between businesses an

for assessing whether a business generates enough returns to pay for its cost of capit

increase in borrowing will reduce shareholders' earnings.hence one can again see hi

returns in 2008 as compared to other years5Net profit margin

It measures the amount of profit earned each Re of revenue. It was maximum in 2008

because of steep increase in sales in that year. However a dip ins ubsequent year cou

because of price competitio or low demand or even recession.

6Asset Turnover

it should always be higher than the rate at which the company borrows, otherwise an

2005 2006 2007 2008 2009

0.00

10.00

20.00

30.0040.00

50.00

60.00

70.00

80.00

90.00

Return On CapitalEmployed(%)

2005 2006 2007 2008 2009

0.00

1.00

2.00

3.004.00

5.00

6.00

7.00

8.00

Net Profit Margin(%)

Net ProfitMargin(%)

2.20

2.30

2.40

2.50

2.60

2.70

Asset turnover

Asset turnover



revenue - the higher the number the better. It also indicates pricing strategy: compan

margins have low asset turnover.hence we can with a rise in profit margins in 2008

and 2009 there is decline in asset turnover ratio which implies a price competition inthese years.

7Return on Assets

2008 company sees a rise which is dedicated to the elevation in sales. Although it is n

nich emarket , but due to its specialized use one can say that the company enjoys higprofit margins and lower asset turnover.

Liquidity Ratios1Current Ratio

It is aratio which is an indicator of company's ability to pay its debt in short term. It sh

the amount of Current asstes per Re of current liabilities. An ideal ratio is 2:1. but

Asset turnover measures a firm's efficiency at using its assets in generating sales or

with low profit margins tend to have high asset turnover, while those with high profit

It IS an indicator of how profitable a company is relative to its total assets. ROA gives

idea as to how efficient management is at using its assets to generate earnings. In

2005 2006 2007 2008 2009

1.90

2.00

.

2005 2006 2007 2008 2009

0.00

2.00

4.00

6.00

8.0010.00

12.00

14.00

16.00

18.00

Return on asset

Return on asset

2005 2006 2007 2008 2009

0.00

0.20

0.40

0.60

0.80

1.001.20

1.40

1.60

1.80

Current Ratio

Current Ratio



company always had a ratio between 1 and 1.6. So for this parameter company can b

rated as satisfactory and not perfect. A rise in 2007 tells us that company has more

CA to meet its liabilities.

2Quick ratio

It is an indicator of a company's short-term liquidity. The quick ratio measures a compability to meet its short-term obligations with its most liquid assets. The higher the

quick ratio, the better the position of the company. Hence company is in more liquid

position in 2007 and 2009 hence it can easily pay its short term obligations.

3Cash Ratio

ratio company has high cash ratio in 2007 , 2009 and 2005 as well. This means that

company is in better position to take debt becauseA strong cash ratio is useful to cred

when deciding how much debt, if any, they would be willing to extend to the asking

party.

4 debtor turnover ratio

The cash ratio is most commonly used as a measure of company liquidity. It can ther

determine if, and how quickly, the company can repay its short-term debt. Like quick

2005 2006 2007 2008 2009

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Quick Ratio

Quick Ratio

2005 2006 2007 2008 2009

0.00

0.00

0.00

0.01

0.010.01

0.01

cash ratio

cash ratio

6.00

debtor turnover ratio



It measures the efficacy of a firms credit and collection policy and shows the number

times each year the debtor turns into cash. It provides some indicator of the quality o

firms' debtors and collection efforts. A decline in this from 2006-2009 indicates a poor

management of receivables and hence we can debtors are becoming less liquid.

5 Inventory turnover ratio

This ratio shows the number of times a ccompany's inventory is turned into sales.

Investment in inventories represents idle cash. We see a rise in the ratio in 2009 whicindicates efficient management of inventory as now more frequently the stocks are s

and a lesser amount of money is required to finanace the inventory. A rise in 2009 is i

line with rise in quich and cash ratio in 2009 because as more inventories is converte

cash higher the ratio is observed.

6 Inventory conversion period

7Debt collection period

8operating cycle

2005 2006 2007 2008 2009

0.00

1.00

2.00

3.00

4.00

5.00debtor turnoverratio

2005 2006 2007 2008 2009

0.00

2.00

4.00

6.00

8.00

10.0012.00

inventory turnover

inventory turnover

50.00

100.00

150.00

200.00

250.00

300.00OPERATINGCYCLE (days)

inventory holdingperiod (Days)

average debtcollection period(days)



As we see a rise in debt collection period a simultaneous rise in operating cycle is see

in 2009. But the efect has been diluted by lower invertory holding period. Hence we

can say that although the company has improved its inventory management but its

receivable management requires amnedmnents.

Solvency Ratios1Debt equity Ratio

It indicates what proportion of equity and debt the company is using to finance its ass

A high debt/equity ratio generally means that a company has been aggressive in fina

its growth with debt. This can result in volatile earnings as a result of the additional

interest expense. This argument seems to ne true as the trend for this ratio almost m

the pattern of asset turnover. Also one can see hisher quick and cash ratio in 2007, th

year where we had high debt-equity ratio, which marks the existence of aggressive p

during that year.

2Liablities to equity Ratio

It is a variant of debt equity ratio, which includes Current liabilities in the numerators.

This ratio has increased during the period. This means that company has rising short t

obligations.

3 Interest Cover

2005 2006 2007 2008 2009

2005 2006 2007 2008 2009

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Debt Equity Ratio

Debt Equity Ratio

2005 2006 2007 2008 2009

0.00

5.0010.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

Liabilities to equity ratio

Liabilities toequity ratio



This ratio used to determine how easily a company can pay interest on outstanding d

As the interest cover declined drasticallyin 2009 we can say that it is largely due to th

in interest rate and hence interest expense

4Equity Ratio

ratio will produce good results for stockholders as long as the company earns a rate o

equity return on assets that is greater than the interest rate paid to creditor. As we se

declining rattio we can say that there is declining share of shareholders in the total

capacity.

5Fixed asset to net worth ratio

The Equity Ratio is a good indicator of the level of leverage used by a company.

2005 2006 2007 2008 2009

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

Interest Cover

2005 2006 2007 2008 20090.00

0.01

0.02

0.03

0.04

0.05

0.06

Equity ratio

Equity ratio

4.00

6.00

8.00

10.00

12.00

fixed asset to net worth ratio

fixed asset to networth ratio



It establishes the relationship between fixed asset and shareholders funds.This ratio

indicates the extent to which the owners' cash is frozen in the form of brick and mort

and machinery, and the extent to which funds are available for the firm's operations.

A rising ratio tells us that high level of shareholders funds are sunk into fixed assets a

hence a lesser capital is provided by them as a part of working capital which hence mthem vunerable to changes in business climate.

Capital Market Ratio1Earnings per share

It is the portion of a company's profit allocated to each outstanding share of common

stock. A sharp decline is seen in 2007 which could be because of aggressive policy

follwed by the company during that period which lead to lower EPS in that period.

Investment valuation Ratio1Dividend per share

Dividend per share is a simple and intuitive number. It is the amount of the dividend

shareholders have (or will) receive for each share they own. Here again a decrease is

seen in 2007 owing to higher finanacing and aggressive approach of company in that

period.

2005 2006 2007 2008 2009

0.00

.

2005 2006 2007 2008 2009

5

10

15

20

25

30

Earnings Per Share

Earnings PerShare

2005 2006 2007 2008 2009

0.0

2.0

4.06.0

8.0

10.0

12.0

14.0

Dividend Per Share

Dividend PerShare



2Operating profit per share

As the number of shares incresed to 899 lakhs form 179 lakhs in 2007 , we see a decli

in the operating profit per share ratio. But as there is rise in operating profit in 2008

and 2009 we see a rise in ratio after 2007

3Free reserves per share

This graph also maps the same pattern as that of operating profit per share graph

probably owing to sismilar reasons as stated above.

4Dividend payout Ratio

2005 2006 2007 2008 2009

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Operating Profit Per Share (Rs)

Operating ProfitPer Share (Rs)

2005 2006 2007 2008 2009

0.0

20.0

40.0

60.0

80.0

100.0

Free Reserves Per Share (Rs)

Free Reserves PerShare (Rs)

2005 2006 2007 2008 2009

0.3

0.3

0.4

0.4

0.5

0.5

dividend payout ratio

dividend payoutratio



It is calculated to find the extent to which earnings per share have been used for paying dividend

nd to know what portion of earnings has been retained in the business.As this ratio is

clining during that years we can safely say that company is in strong financial positio

This is because lower the payout ratio, the higher will be the amount of earnings plou

back in the business which indicates strong financial postion.

3. CONCLUSIONhe most eventfull years in the duartion taken has been 2007 and 2008. Year 2008 wa

rked by profitability as we saw a rise in operating profit margin,PBIT margin, gross pro

rt we can say that company started reaping the fruits of increased finacing in 2007 in

ar 2008 and further. Also the decline in interest expense in2008 but rise in 2009 great

acted its interest coverage ratio . Finanlly the company needs to improve its receiva

management.

of aggressive

a

share.Also which is Hence in

35 - Supreet - BlueStar

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