BATA INDIA LTD.(2009-2015)

FINANCIAL ANALYSIS OF

Presented By:-Reyaz JafarSmita swain Shefali Bhagat Sumit Sharma Tahir Raza Kumar Saurabh

INDUSTRY OVERVIEW• Leather is one of the most widely traded commodities globally. The growth

in demand for leather is driven by the fashion industry, especially footwear. • Apart from this, furniture and interior design industries, as well as the

automotive industry also demand leather.• The leather industry plays a crucial role in the Indian economy due to

substantial export earnings and growth.• India is the fifth-largest exporter of leather goods and accessories in the

world.• The net export of leather and leather products stood at US$ 6.5 billion for

Financial year 2014-2015.• The major production centres for leather and leather products are located

at Chennai, Ambur, Ranipet, Vaniyambadi, Trichi, Dindigul kolkata, Kanpur , Jalandhar , Bengaluru ,Delhi and Hyderabad.

COMPANY OVERVIEWBata India is a footwear manufacturing company incorporated in 1931. The company was earlier known as Bata Shoe Company, later in 1973 the name was changed to the present one.

The company manufactures footwear for men, women and children. The Company manufactures shoes of various quality such as leather, rubber, canvas and PVC shoes.

Bata Group has worldwide presence across 5 continents, serving 1 million customers per day and operating 4,600 retail stores globally.

The Company’s brands include Ambassador, Angry Birds, Bata, Bata Lite, Bata Walks Green, Comfit, Hush Puppies, Marie Claire, Naturalizer, North Star, Power, Sandak, Scholl, Sparx, Sundrops and Sunshine, among others.

Bata India is selected as a POWERBRAND in the POWERBRANDS 2010. The selection is done after an extensive pan India research conducted by Indian Council for Marketing Research to select The Most Powerful Brands in India in the year 2009. 

FINANCIAL ANALYSIS

Financial statement analysis is the process of reviewing and analyzing a company's financial statements to make better economic decisions. Financial statement refers to such statements which tells the profitability and financial position of the business at the end of accounting period.

Financial statement analysis enables investors and creditors to Evaluate past performance of the company Financial position of the company. Liquidity position of the company Predict future performance of the company.

TECHNIQUE OF ANALYSIS

Different techniques of analysis are :1. Horizontal analysis 2. Vertical analysis3. Trend analysis4. Ratio analysis

RATIO ANALYSIS

Objective to locate the weak spots in business To provide deeper analysis i.e. profitability liquidity

solvency etc. For making comparison from different firms in same

industry Preparing plans for future.

Ratio analysis is a useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance. Managers will use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be formed.

CLASSIFICATION OF RATIO ANALYSIS PROFITABILITY RATIO LIQUIDITY RATIO SOLVENCY RATIO CAPITAL MARKET RATIO

PROFITABILITY RATIO

PROFIT MARGIN =

It tells about the % of profit earn bythe firm in any accounting period

2009 2010 2011 2012 2013 20150.00%2.00%4.00%6.00%8.00%

10.00%12.00%14.00%16.00%

Profit Margin Ratio

Year 2009 2010 2011 2012 2013 2015Ratio 6.15% 7.57% 14.64% 9.31% 9.23% 8.58%

ASSETS TURNOVER RATIO

Year 2009 2010 2011 2012 2013 2015

Ratio 3.51 Times 1.76 Times 1.71 Times 1.793 Times 1.643 Times 1.783 Times

It measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company.

=

2009 2010 2011 2012 2013 201500.5

11.5

22.5

33.5

4

Assets Turnover Ratio

RETURN ON ASSET

Year 2009 2010 2011 2012 2013 2015

Ratio 21.64% 13.37% 25.14% 16.70% 15.17% 15.30%

It  shows the percentage of how profitable  a company's assets are in generating revenue.

=

2009 2010 2011 2012 2013 20150.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Return on Asset

RETURN ON EQUITY

Year 2009 2010 2011 2012 2013 2015

Ratio 22.87% 26.03% 46.44% 29.92% 24.75% 24.81%

It measures the efficiency of a firm at generating profits from each unit of shareholder equity.

=

2009 2010 2011 2012 2013 20150.00%5.00%

10.00%15.00%20.00%25.00%30.00%35.00%40.00%45.00%50.00%

Return on Equity

EARNING PER SHARE

Year 2009 2010 2011 2012 2013 2015Ratio 10.46 per

share14.84 per share

35.14 per share

26.7 per share

29.68 per share

35.97 per share

=

2009 2010 2011 2012 2013 20150

5

10

15

20

25

30

35

40

Earnings per Share The earnings per share ratio (EPS ratio) measures the amount of a company's net income that is theoretically available for payment to the holders of its common stock

LIQUIDITY RATIO

CURRENT RATIO

Year 2009 2010 2011 2012 2013 2015Ratio 2.28 : 1 1.94 : 1 2.77 : 1 2.45 : 1 2.46 : 1 2.29 : 1

It is an indication of a firm's market liquidity and ability to meet creditor's demands.

=

2009 2010 2011 2012 2013 20150

0.5

1

1.5

2

2.5

3

Current Ratio

QUICK RATIO

Year 2009 2010 2011 2012 2013 2015Ratio 0.85 : 1 0.98 : 1 1.26 : 1 0.88 : 1 0.90 : 1 0.69 : 1

It measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities. It should be 1:1 or higher.the higher the ratio, the greater the company's liquidity 

=

2009 2010 2011 2012 2013 20150

0.2

0.4

0.6

0.8

1

1.2

1.4

Quick Ratio

DEBTOR TURNOVER

Year 2009 2010 2011 2012 2013 2015

Ratio 42.75Times 45.43 Times 50.07 Times 48.26 Times 43.05 Times 49.27 Times

It used to measure how effective a company is in extending credit as well as collecting debts. 

=

2009 2010 2011 2012 2013 201538

40

42

44

46

48

50

52

Debtor Turnover Ratio

AVERAGE DEBT COLLECTION

Year 2009 2010 2011 2012 2013 2015Ratio 8.42 Days 7.92 Days 7.18 Days 7.45 Days 8.36 Days 7.30 Days

It  indicates the average time taken to collect trade debts.

=

2009 2010 2011 2012 2013 20156.5

7

7.5

8

8.5

9

Average Debt Collection Period

INVENTORY TURNOVER

Year 2009 2010 2011 2012 2013 2015Ratio 3.50 Times 3.91 Times 3.92 Times 3.79 Times 3.49 Times 3.77 Times

It measure for evaluating just how efficient management is at managing company inventory and generating sales from it.

=

2009 2010 2011 2012 2013 20153.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

4

Inventory Turnover Ratio

AVERAGE INVENTORY HOLDING PERIOD

A ratio showing how many times a company's inventory is sold and replaced over a period.

=

Year 2009 2010 2011 2012 2013 2015

Days 102.85 92.07 91.83 94.98 103.15 95.49

2009 2010 2011 2012 2013 201586889092949698

100102104106

Average Inventory Holding Period

SOLVENCY RATIO

DEBT EQUITY RATIO

Year 2009 2010 2011 2012 2013 2015

Ratio 0.07 : 1 0.034 : 1 0.033 : 1 NIL NIL NIL

It used to measure a company's financial leverage It also indicates how much debts company is using to finance its assets.

=

2009 2010 2011 2012 2013 201500.010.020.030.040.050.060.070.08

Debt Equity Ratio

LIABILITY EQUITY RATIO

Year 2009 2010 2011 2012 2013 2015Ratio 0.84 : 1 1.03 : 1 0.71 : 1 0.614 : 1 0.64 : 1 0.60 : 1

=

All Liability = Total Liability – Shareholder’s Equity

It is the ratio between liability of a business towards outsider’s and towards owners

2009 2010 2011 2012 2013 20150

0.2

0.4

0.6

0.8

1

1.2

Liability to Equity Ratio

INTEREST COVERAGE RATIO

Year 2009 2010 2011 2012 2013 2015

Ratio 11.33 Times 19.72 Times 34.11 Times 245.15 Times 218.57 Times 188.16 Times

It measure of a company's ability to meet its interest payments.It determines how easily a company can pay interest expenses on outstanding debt. 

=

2009 2010 2011 2012 2013 20150

50

100

150

200

250

300

Interest Coverage Ratio

CAPITAL MARKET RATIO

PRICE EARNING RATIO

Year 2009 2010 2011 2012 2013 2015Ratio 19

Times24.529Times

15.15Times

32.59Times

35.54 Times

30.62 Times

=

PE ratio shows current investor demand for a company share

2009 2010 2011 2012 2013 201505

10152025303540

Price Equity Ratio

DIVIDEND YIELD RATIO

Year 2009 2010 2011 2012 2013 2015

Ratio 1.50% 1.09% 1.12% 0.68% 0.61% 0.59%

It is a way to measure how much cash flow you are getting for each dollar invested in an equity position.

=

2009 2010 2011 2012 2013 20150.00%0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60%

Dividend Yield Ratio

PRICE TO BOOK RATIO

Year 2009 2010 2011 2012 2013 2015Ratio 3.82Times 5.87 Times 5.95 Times 7.98 Times 8.06 Times 6.92 Times

It used to compare a stock's market value to its book value.It is calculated by dividing the current closing price of the stock by the latest book value per share.

=

2009 2010 2011 2012 2013 20150123456789

Price to Book Ratio

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