Term Paper Accounts Zee Telelevision
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8/8/2019 Term Paper Accounts Zee Telelevision
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TERM PAPERTOPIC- ZEE TELEFILMS
LTD
SUBMITTED TOSUBMITTED BY
SUKHWINDER KAURVINEETH NAIR
ROLL NO - B36
SECTION - RT1001
REG NO- 11002057
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The company was incorporated on 25 th November and itobtained the certificate of commencement of business on5 th January 1983 as empire. it was promoted by the Esselgroup of companies comprising Sanjay badgamia, VansantParekh and Ashok Kothari.
It entered into the business of entertainment softwaresubsequently the name was changed to zee telefilms ltd.The company co- promoted Essel packaging ltd. Thepartnership company of the essel group in 1982. Channelsoperated by zee telefilms are-zee studio, zee cinema, zeenews, zee music, zee caf, zee movies, zee English, zee
smile etc.
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PRODUCT PROFILEThe company produces hindi films,serials, game shows,children programmes etc. the company would alsocommission serials, game shows etc, through directors oncontract basis, purchase rights of Hindi films, serials andother programmes from the producers for apredetermined period. They deal in television
broadcasting .
COMPETITORSStar TV & Sony TV are the competitors of zee televisions .
SHARE PRICEZee stock- INR 293.70
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BRANCHESHeadquarter of Zee televisions are located in Mumbai.
Its branches are in Canada, Hongkong, India, Singapore,South Africa, United Arab Emirates, United Kingdom andUnited States of America.
LISTED ON
Bombay stock exchange and national stock exchange,India
LATEST NEWS
1.Zee TV present- dill se diya vachan.
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2. Corrigendum communication issued to stock exchanges on annual report.
3. Zee Aflum becomes the No 1 movie channel during
Ramadan.4. ZEEL press release for audited results for the yearended March 31 st .
5. Zee entertainment investor newsletter.
COMPARITIVE
P ROFIT & LOSS A/C Profit & Loss account of ZeeEntertainment Enterprises
Mar '08 Mar '09 Mar '10 inc/dec % inc/dec %
12 months 12 months 12 months2008-2009
2008-2009
2009-2010
2009-2010
Income
Sales Turnover 1,041.99 1,210.24 1,278.74 168.2516.1469
88 68.505.66003
44
Excise Duty 0 0 0 0 #DIV/0! 0.00 #DIV/0!
Net Sales 1,041.99 1,210.24 1,278.74 168.2516.1469
88 68.505.66003
44
Other Income 75.77 56.92 106.18 -18.85
-24.8779
2 49.2686.5425
16
Stock Adjustments 48.36 81.96 130.67 33.669.4789
08 48.7159.4314
3
Total Income 1,166.12 1,349.12 1,515.59 18315.6930
68 166.4712.3391
54
Expenditure 0 #DIV/0! 0.00 #DIV/0!
Raw Materials 3.47 4.86 2.69 1.3940.0576
37 -2.17
-44.6502
06
Power & Fuel Cost 0 0 0 0 #DIV/0! 0.00 #DIV/0!
Employee Cost 62.1 92.42 81.46 30.3248.8244
77 -10.96
-11.8589
05
Other Manufacturing Expenses 406.4 581.91 553.65 175.5143.1865
16 -28.26
-4.85642
11
Selling and Admin Expenses 190.65 233.63 0 42.9822.5439
29 -233.63 -100
Miscellaneous Expenses 18.5 18.11 240.51 -0.39
-
2.1081081 222.40 1228.0508
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Preoperative Exp Capitalised 0 0 0 0 0 0 0
Total Expenses 681.12 930.93 878.31 249.810.36676
36 -52.62
-5.65241
21
Operating Profit 409.23 361.27 531.1 -47.96
-11.7195
71 169.8347.0091
62
PBDIT 485 418.19 637.28 -66.81
-13.7752
58 219.0952.3900
62
Interest 20.05 27.51 17.53 7.4637.2069
83 -9.98
-36.2777
17
PBDT 464.95 390.68 619.75 -74.27
-15.9737
61 229.0758.6336
64
Depreciation 10.6 11.92 11.43 1.3212.4528
3 -0.49
-4.11073
83
Other Written Off 0 0 0 0 #DIV/0! 0 #DIV/0!
Profit Before Tax 454.35 378.76 608.32 -75.59
-
16.636954 229.56 60.608301
Extra-ordinary items 0 63.41 31.3 63.41 #DIV/0! -32.11
-50.6387
01
PBT (Post Extra-ord Items) 454.35 442.17 639.62 -12.18
-2.68075
27 197.4544.6547
71
Tax 159.22 132.44 80.8 -26.78
-16.8194
95 -51.64
-38.9912
41
Reported Net Profit 295.12 309.74 558.84 14.624.95391
71 249.180.4222
9
Total Value Addition 677.65 926.07 875.61 248.4236.6590
42 -50.46
-5.44883
22
Preference Dividend 0 0 0 0 #DIV/0! 0 #DIV/0!
Equity Dividend 86.8 86.8 194.68 0 0 107.88124.285
71
Corporate Dividend Tax 14.54 14.54 32.33 0 0 17.79122.352
13
Per share data (annualised) 0 #DIV/0! 0 #DIV/0!
Shares in issue (lakhs) 4,335.67 4,340.07 4,340.07 4.40.10148
37 0 0
Earnings Per Share (Rs) 6.81 7.14 12.88 0.334.84581
5 5.7480.3921
57
Equity Dividend (%) 200 200 400 0 0 200 100
Book Value (Rs) 49.09 53.99 64.97 4.99.98166
63 10.9820.3370
99
ANALYSIS & INTERPRETATION
1.Total income of the firm has increased because of increase in net sales and other income.
2.Stocks were also increased in 2009 and 2010.
3.total expenses have decreased in year 2010 ascompared to 2009.
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4. profit before tax has increased has decreased in 2010as compared to 2009.
COMPARITIVE BALANCE SHEET
Balance Sheet of Zee EntertainmentEnterprises
------------------- in Rs. Cr.
-------------------
Mar '08 Mar '09 Mar '10 inc/dec %inc/dec %
12 mths 12 mths 12 mths2008-2009
2008-2009
2009-2010
2009-2010
Sources Of Funds
Total Share Capital 43.36 43.4 43.4 0.04 0.092251 0 0Equity ShareCapital 43.36 43.4 43.4 0.04
0.092251 0 0
Share ApplicationMoney 0 0 5.5 0
#DIV/0! 5.5
#DIV/0!
Preference ShareCapital 0 0 0 0
#DIV/0! 0
#DIV/0!
Reserves 2,084.89 2,299.602,776.4
3 214.7110.298
39 476.8320.735
35RevaluationReserves 0 0 0 0
#DIV/0! 0
#DIV/0!
Networth 2,128.25 2,343.002,825.3
3 214.7510.090
45 482.33 20.586
Secured Loans 70.87 121.4 58.5 50.5371.299
56 -62.9
-51.812
2
Unsecured Loans 133.39 49.55 60.4 -83.84
-62.853
29 10.8521.897
07
Total Debt 204.26 170.95 118.9 -33.31
-16.307
65 -52.05
-30.447
5
Total Liabilities 2,332.51 2,513.952,944.2
3 181.447.7787
45 430.2817.115
69
Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths
Application Of Funds
Gross Block 162.2 189.82 216.67 27.62 17.02836 26.85 14.14498Less: Accum. 40.08 49.89 58.29 9.81 24.476 8.4 16.837
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Depreciation 05 04
Net Block 122.12 139.93 158.38 17.8114.584
02 18.4513.185
16Capital Work inProgress 6.35 18.33 111.1 11.98
188.6614 92.77
506.1102
Investments 1,349.47 1,349.621,531.9
3 0.150.0111
15 182.3113.508
25
Inventories 236.41 319.48 453.13 83.0735.138
11 133.6541.833
6
Sundry Debtors 408.28 351.68 463.38 -56.6
-13.863
04 111.731.761
83Cash and BankBalance 22.21 110.43 300.29 88.22
397.2085 189.86
171.9279
Total CurrentAssets 666.9 781.59
1,216.80 114.69
17.19748 435.21
55.68265
Loans andAdvances 744.36 663.63 547.37 -80.73
-10.845
56-
116.26
-17.518
8
Fixed Deposits 0.01 0.01 0 0 0 -0.01 -100Total CA, Loans &Advances 1,411.27 1,445.23
1,764.17 33.96
2.406343 318.94
22.06846
Deffered Credit 0 0 0 0#DIV/0
! 0#DIV/0
!
Current Liabilities 384.98 298.94 383.38 -86.04
-22.349
21 84.4428.246
47
Provisions 171.74 140.22 237.96 -31.52
-18.353
32 97.7469.704
75
Total CL &Provisions 556.72 439.16 621.34
-117.56
-21.116
54 182.1841.483
74
Net Current Assets 854.55 1,006.071,142.8
3 151.5217.730
97 136.7613.593
49MiscellaneousExpenses 0.01 0.01 0 0 0 -0.01 -100
Total Assets 2,332.50 2,513.962,944.2
4 181.467.7796
36 430.2817.115
63
ContingentLiabilities 703.48 649.16
1,057.97 -54.32
-7.7216
13 408.8162.975
23
Book Value (Rs) 49.09 53.99 64.97 4.99.9816
66 10.9820.337
1
ANALYSIS & INTERPRETATION
1.Total assets have increased in 2010 because of increase
in its cash balance and investments and inventories.2.total current liabilities and provisions have increasedbecause of increase in current liabilities and loans andadvances.
Common size profit & loss A/C
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Profit & Loss account of Zee EntertainmentEnterprises
Mar '08 Mar '09 Mar '10commonsize%
commonsize%
commonsize%
12 mths 12 mths 12 mths 2008 2009 2010
Income
Sales Turnover 1,041.99 1,210.24 1,278.74 100 100 100
Excise Duty 0 0 0 0 0 0
Net Sales 1,041.99 1,210.24 1,278.74 100 100 100
Other Income 75.77 56.92 106.187.2716628
764.7031993
658.30348624
4
Stock Adjustments 48.36 81.96 130.6763.824732
74143.99156
71123.064607
3
Total Income 1,166.12 1,349.12 1,515.592411.3316
791646.0712
541159.86071
8
Expenditure 0 0 0
Raw Materials 3.47 4.86 2.69 0 0 0
Power & Fuel Cost 0 0 0 0 0 0
Employee Cost 62.1 92.42 81.46 0 0 0Other ManufacturingExpenses 406.4 581.91 553.65
654.4283414
629.6364423
679.6587282
Selling and Admin Expenses 190.65 233.63 046.911909
4540.148820
26 0
Miscellaneous Expenses 18.5 18.11 240.519.7036454
24 7.751573 0
Preoperative Exp Capitalised 0 0 0 0 0 0
Total Expenses 681.12 930.93 878.31 0! 0 0
Mar '08 Mar '09 Mar '10
12months
12months
12months
Operating Profit 409.23 361.27 531.139.273889
3829.851103
9141.5330716
2
PBDIT 485 418.19 637.28640.09502
44734.69782
15600.188359
4
Interest 20.05 27.51 17.5341.459884
233.565153
73 13.4154741
PBDT 464.95 390.68 619.7539.871539
8128.958135
6740.8916659
5
Depreciation 10.6 11.92 11.43 0 0 0
Other Written Off 0 0 0 0 0 0
Profit Before Tax 454.35 378.76 608.32 0 0 0
Extra-ordinary items 0 63.41 31.3 068.610690
3338.4237662
7
PBT (Post Extra-ord Items) 454.35 442.17 639.62111.79872
0575.985977
21115.527860
6
Tax 159.22 132.44 80.8
83.514293
21
56.687925
35 0
Reported Net Profit 295.12 309.74 558.841595.2432
431710.3257
87 232.356243
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Total Value Addition 677.65 926.07 875.61 0 0 0
Preference Dividend 0 0 0 0 0 0
Equity Dividend 86.8 86.8 194.68 0 0 0
Corporate Dividend Tax 14.54 14.54 32.33 0 0 0
Per share data (annualised) 0 0 0
Shares in issue (lakhs) 4,335.67 4,340.07 4,340.07 0 0
Earning Per Share (Rs) 6.81 7.14 12.881.6641008
721.9763611
72.42515533
8
Equity Dividend (%) 200 200 40041.237113
447.825151
2562.7667587
2
Book Value (Rs) 49.09 53.99 64.97244.83790
52196.25590
69370.621791
2
ANALYSIS &INTERPRETATION
1. There is percentage change in total income of the firmas compared to2008 and 2009 in 2010.
2. Total income of the firm has increased because of increase in percentage of net sales and and other income.
3.Earning per share of the firm has also increased ascompared to 2008 and 2009 in 2010 which is 2.42 %.
COMMON SIZE BALANCE SHEET
Balance Sheet of ZeeEntertainment Enterprises
Mar '08 Mar '09 Mar '10commonsize %
commonsize%
commonsize%
12
months12
months12
months 2008 2009 2010
Sources Of Funds
Total Share Capital 43.36 43.4 43.41.85894165
51.72636687
31.47406962
1
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Equity Share Capital 43.36 43.4 43.41.85894165
51.72636687
31.47406962
1
Share Application Money 0 0 5.5 0 0 0
Preference Share Capital 0 0 0
Reserves 2,084.89 2,299.602,776.4
389.3839683
491.4735774
4 94.300717
Revaluation Reserves 0 0 0 0 0 0
Net worth 2,128.25 2,343.002,825.3
395.9615926
793.1999443
195.9615926
7
Secured Loans 70.87 121.4 58.53.03835782
14.82905387
91.98693716
2
Unsecured Loans 133.39 49.55 60.45.71873218
1 1.971001812.05147016
4
Total Debt 204.26 170.95 118.98.75709000
26.80005568
94.03840732
6
Total Liabilities 2,332.51 2,513.952,944.2
3 100 100 100
Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths
Application Of Funds
Gross Block 162.2 189.82 216.676.95391211
17.55063724
27.35911474
6
Less: Accum. Depreciation 40.08 49.89 58.291.71832797
41.98451844
91.97979784
3
Net Block 122.12 139.93 158.38 17.35941325.56611879
35.37931690
4
Capital Work in Progress 6.35 18.33 111.112.9354247
30.72912854
63.77346955
4
Investments 1,349.47 1,349.621,531.9
3 57.855091153.6850228
352.0314240
7
Inventories 236.41 319.48 453.1310.1354769
6 12.708237215.3903893
7
Sundry Debtors 408.28 351.68 463.38 58.0371865 6 54.1746256 7 43.7989735 1
Cash and Bank Balance 22.21 110.43 300.2945.2434304
3204.537877
4462.197937
5
Total Current Assets 666.9 781.591,216.8
028.5916398
731.0899934
8 41.3281526
Loans and Advances 744.36 663.63 547.3731.9125401
926.3977947
118.5912153
9
Fixed Deposits 0.01 0.01 00.00042872
50.00039777
9 0
Total CA, Loans & Advances 1,411.27 1,445.231,764.1
760.5046087
957.4881859
759.9193679
9
Deferred Credit 0 0 0 0 0 0
Current Liabilities 384.98 298.94 383.3816.5050375
111.8911995
413.0213569
5
Provisions 171.74 140.22 237.9624.4129186
35.57765437
88.08222155
8
Total CL & Provisions 556.72 439.16 621.341134.08026
167.6505021
958.7294535
8
Net Current Assets 854.55 1,006.071,142.8
336.6366559
51863.43767
41759.01185
2
Miscellaneous Expenses 0.01 0.01 00.00042872
50.00039777
9 0
Total Assets 2,332.50 2,513.962,944.2
4 100 100 100
Contingent Liabilities 703.48 649.161,057.9
730.1597849
5 25.822311535.9336736
6
Book Value (Rs) 49.09 53.99 64.972.10459976
62.14761630
12.20668901
5
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ANALYSIS & INTERPRETATION
1.Total assets of the firm has increased in respectiveyears to 100%,which is a good sign for the firm.
2.current liabilities of the firm has also increased becauseof increase in loans and advances and current liabilities to59.91%as compared to 57 % in 2009.
BALANCESHEET
TRENDANALYSIS
Balance Sheet of ZeeEntertainment Enterprises
Mar '08 Mar '09 Mar '10trend
%trend
%
12months
12months
12months
2009-2008
2010-2008
Sources Of Funds
Total Share Capital 43.36 43.4 43.4100.0
92100.09
2
Equity Share Capital 43.36 43.4 43.4100.0
92100.09
2
Share Application Money 0 0 5.5 0 0
Preference Share Capital 0 0 0 0 0
Reserves 2,084.89
2,299.6
0
2,776.4
3
110.2
98
133.16
9Revaluation Reserves 0 0 0 0 0
Networth 2,128.252,343.0
02,825.3
3110.0
9132.75
4
Secured Loans 70.87 121.4 58.5 171.382.545
5
Unsecured Loans 133.39 49.55 60.437.14
6745.280
8
Total Debt 204.26 170.95 118.983.69
2458.210
1
Total Liabilities 2,332.512,513.9
52,944.2
3107.7
79126.22
6
Mar '08 Mar '09 Mar '10
12 mths 12 mths 12 mths
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Application Of Funds
Gross Block 162.2 189.82 216.67117.0
28133.58
2
Less: Accum. Depreciation 40.08 49.89 58.29124.4
76145.43
4
Net Block 122.12 139.93 158.38114.5
84129.69
2
Capital Work in Progress 6.35 18.33 111.1288.6
611749.6
1
Investments 1,349.471,349.6
21,531.9
3100.0
11113.52
1
Inventories 236.41 319.48 453.13135.1
38191.67
1
Sundry Debtors 408.28 351.68 463.3886.13
7113.49
6
Cash and Bank Balance 22.21 110.43 300.29497.2
081352.0
5
Total Current Assets 666.9 781.591,216.8
0117.1
97182.45
6
Loans and Advances 744.36 663.63 547.3789.15
4473.535
7
Fixed Deposits 0.01 0.01 0 100 0
Total CA, Loans & Advances 1,411.271,445.2
31,764.1
7102.4
06125.00
6
Deferred Credit 0 0 0 0 0
Current Liabilities 384.98 298.94 383.3877.65
0899.584
4
Provisions 171.74 140.22 237.9681.64
67138.55
8
Total CL & Provisions 556.72 439.16 621.3478.88
35111.60
7
Net Current Assets 854.551,006.0
71,142.8
3117.7
31133.73
5
Miscellaneous Expenses 0.01 0.01 0 100 0
Total Assets 2,332.502,513.9
62,944.2
4107.7
8126.22
7
Contingent Liabilities 703.48 649.161,057.9
792.27
84150.39
1
Book Value (Rs) 49.09 53.99 64.97109.9
82132.34
9
ANALYSIS & INTERPRETATION
1.The networth of the firm has increased to 132.1% in2010 as compared to 2009 because of increase inreserves.
2.secured loans have decreased and unsecured loans haveincreased as a result the total debt of the firm hasincreased which is not good for the company.
3.Fixed deposits have decreased because of increase inloans and advances and current liabilities of the firm.
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Corporate Dividend Tax 14.54 14.54 32.33 100222.352
1
Per share data (annualised) 0 0
Shares in issue (lakhs) 4,335.67 4,340.07 4,340.07100.101
48100.101
5
Earnings Per Share (Rs) 6.81 7.14 12.88104.845
81189.133
6
Equity Dividend (%) 200 200 400 100 200
Book Value (Rs) 49.09 53.99 64.97109.981
67132.348
7
ANALYSIS & INTERPRETATION
1. Total income of the firm has increased because increasein net sales and other income of the firm in 2010.
2. Total expenses of the firm have decreased in 2010because of decrease in employee cost and selling anddistribution expenses.
3. Net profit of the firm has increased in 2010 to 189.36%as compared to 2009.
4. Earnings per share of the firm has increased to 189%in2010 as compared to 2009 because of increase in theearning capacity of the firm.
LIQUIDITY RATIO
1. Current ratio =current assets/ current liabilities
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year 2008 2009 2010current assets 666.9 781.59 1216.8
current liabilities 556.72 439.16 621.34current ratio 1.19 1.77 1.95
ANALYSIS
1. The ideal norm is 2:1 of the current ratio.
(i) In the year 2008 current ratio was 1.19 which is lessthan the standard norm of 2:1which means thecurrent position of the firm is not so good and issatisfactory.
(ii) In the year 2009 the current ratio has decreased ascompared to 2008 but in 2010 it has increased tosome extent but is still less than the standard normof 2:1 which means firms short term obligations isvery weak.
(iii) The reason behind the decrease in currentratio is due to increase in the current liabilities of the firm then the current assets.
2. Quick Assets Ratio =Quick Assets/CurrentLiabilities
Quick assets =Current assets-Inventories
year 2008 2009 2010
current assets 666.9 781.59 1216.8inventories 236.41 319.48 453.13current liabilities 556.72 439.16 621.34
Quick Ratio 0.77 1.05 1.22
ANALYSIS
(i). In 2008 the quick ratio was 0.77 which is very less thanthe standard norm of 1:1.In the year 2009 it has increasedsomewhat to 1.05 which has again increased in 2010 to
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1.22. it means the position of the company is increasingyear by year which is good sign for the company and it isgreater than the standard norm set.
(ii) The increase in the quick ratio of the firm in 2009 and2010 is due to increase in the amount of the inventory andcurrent assets of the firm in the year 2009 and 2010.
3. Absolute liquid ratio =Cash + bank/currentliabilities
year 2008 2009 2010Cash and bank balance 22.21 110.43 300.29
current liabilities 556.72 439.16 621.34Absolute liquid ratio 0.03 0.25 0.48
(i) In the year 2008 the absolute liquid ratio was 0.03which has increased
to 0.25 in the year 2009 and 0.48 in the year 2010.itmeans the ratio has
Increased subsequently which shows the position of the firm is improving year byyear and is more than the standard set of 0.5:1
(ii) The increase in the absolute liquid ratio is due toincrease in the cash and bank balance of the firmwhich has lead to increase in the absolute liquid ratio.
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ACTIVITY RATIO
1. Inventory turnover Ratio =Net sales/Averageinventory
year 2008 2009 2010Net sales 1041.99 1210.24 1278.74Inventory 236.41 319.48 453.13
Inventory turnover ratio 4.4 3.78 2.82
ANALYSIS
(i)In the year 2008 the inventory turnover ratio was4.40 which is greater than the ratio in 2009 and 2010but in 2009 and 2010 it has decreased very muchwhich shows that the firm is going into recession .
(ii) The decrease in the ratio is due to the decrease in the
cost of goods sold in the respective year.(iii)The inventory holding has increased which is agood sign for the company.
2. DEBTORS TURNOVER RATIO =Total sales/TotalDebtors
year 2008 2009 2010 Total sales 1041.99 1210.24 1278.74
Total Debtors 408.28 351.68 463.38Debtor turnover ratio 2.55 3.44 2.75
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ANALYSIS
(i) The higher the debtor turnover ratio better it is forthe company. In the ratio in 2008 was 2.55 which is
less than in the year 2009 and 2010,In the year 2009the debtor turnover ratio has increased, but it hasagain decreased in the year 2010 which is not a goodsign for the company.
(ii) The decrease in the debtor turnover ratio is due toincrease in the number of debtors of the firm.
3. ASSET TURNOVER RATIO = Net Sales/Total Assets
year 2008 2009 2010Net Sales 1041.99 1210.24 1278.74
Total Assets 2332.5 2513.96 2944.24Asset Turnover Ratio 0.44 0.48 0.43
ANALYSIS
(i) The asset turnover ratio of the firm was 0.44 which isless than 2009 but is more than 2010.it means 2009has been a good year for the firm due to increase inthe assets of the firm in 2009.it means the firm hasthe capability to pay of its long term liabilities whichis a good sign for the company.
SOLVENCY RATIO
1. DEBT EQUITY RATIO = Total Debt/ Shareholders fund
Shareholders fund =Equity share + preference share +
reserve & surplus
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year 2008 2009 2010 Total Debt 204.26 170.95 118.9
Shareholders fund 2128.25 2343 2819.83Debt Equity Ratio 0.09 0.07 0.04
ANALYSIS
(i) The debt equity ratio of the firm was 0.09 but it hasdecreased in the year 2009 and 2010 with figures of 0.07 and 0.04 which is a good sign for the firmbecause the lower the debt equity ratio better it is forthe company.
(ii) The decrease in the debt equity ratio is duedecrease in the total debt of the firm.
2. PROPRIETORY RATIO = Shareholders fund/TotalAsset
year 2008 2009 2010shareholders fund 2128.25 2343 2819.83
Total Asset 2332.5 2513.96 2944.24Proprietory Ratio 0.91 0.93 0.95
ANALYSIS
(i)The proprietory ratio of the firm in 2008 was 0.91which has increased in 2009 and 2010 to 0.93 and0.95.
(ii) The increase in the ratio is due to increase in thetotal assets of the firm year by year which is a goodsign for the company.
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PROFITABILITY RATIO
1. GROSS PROFIT RATIO = GROSS PROFIT/ NET SALES100
year 2008 2009 2010
gross profit 1337.03 1617.28 1810.64net sales 1041.99 1210.24 1278.74
gross profit ratio 1.28 1.33 1.41
ANALYSIS
(i) The gross profit ratio of the firm during 2008 was1.28 which has increased in 2009 and 2010 to 1.33and 1.41.
(ii) The increase is due to increase in the gross profitand net sales of the company which means the firm isgoing very high.
3. NET PROFIT RATIO = NET PROFIT/NET SALES100
year 2008 2009 2010net profit 295.12 309.74 558.84net sales 1041.99 1210.24 1278.74
net profit ratio 0.28 0.25 0.43
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ANALYSIS
(i)The net profit ratio in the year 2008 was 0.28 whichhas increased in the respective year of 2009 and 2010
which shows that there is an increase in the net profitof the company.
(ii) The increase in the net profit ratio is due to theincrease in the net profit and net sales of thecompany.
4. OPERATING PROFIT RATIO =OPERATING PROFIT/NETSALES100
year 2008 2009 2010operating profit 409.23 361.27 531.1
net sales 1041.99 1210.24 1278.74operating profit ratio 0.39 0.29 0.41
ANALYSIS
(i)The operating profit ratio in the year 2008 was 0.39which has decreased to 0.29 in 2009 but hasrespectively increased in the year 2010 which meansthe firm is growing in a good position.
(ii) The increase in the ratio is due to the increase in theoperating profit and net sales of the firm.
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2008 2009 201012 months 12 months 12 months
Net Profit Before Tax 456.92 376.19 608.34
Net Cash From OperatingActivities 169.72 181.47 164.24
Net Cash (used in)/from -5.47
109.45 344.03Investing Activities
Net Cash (used in)/fromFinancing Activities -145.92 -202.7 -286.66
Net (decrease)/increase In 18.33
88.22 221.61Cash and Cash Equivalents
Opening Cash & CashEquivalents 3.88 22.21 110.43
Closing Cash & CashEquivalents 22.21 110.43 332.05
ANALYSIS
(i) The net cash from operating activities in the year2008 was 169.72 which has increased in the year2009 to 181.47 but has again decreased in the recentyear to 164.24.
(ii) The decrease in the cash from operating activities inthe recent year is due to increase in the depreciationand reserves of the firm and increase in the currentliabilities as well as the decrease in the currentassets of the firm.
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(iv) The increase in the cash from investing activitiesin the year 2010 is too much than the increase in theyear 2009 because there has been the sale of assetsin large number and fixed assets have beenpurchased, so there is an increase in cash frominvesting activities during the respective years.
(v) The cash from financing activities has gonenegative due to the bank loan borrowed by the firm,non payment of short term borrowing and dividendhas been paid, so the cash generated from financingactivities has gone negative.
(vi) Cash and bank balance of the firm has increasedwhich shows what amount of cash has been outflowed and what amount has inflow into thecompany.
STATEMENT OF CHANGES IN WORKING CAPITAL
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SOURCES OF FUNDS AmountAPPLICATION OFFUNDS Amount
Fund from operation 725.44Purchase of fixedassets 18.45
Issue of share capital 0 Repayment of loan -116.26Raising long termloans -295.14
Increase in workingcapital 528.11
TOTAL 430.3 430.3
ANALYSIS
(I (i) The statement of changes in working capital shows the currethe Current liabilities of the firm for the particular year2009 and 2010, after analysing the current assets
changes in working capital was found which showed a netincrease in the working capital of the firm.
(ii) Adjusted profit and loss account shows theadjustment made to the profit and loss of the firm tofind out the fund from operations which is necessary tomake fund flow statement regarding the firm.(iii) The fund flow statement shows the sources of funds
and application of funds which shows from where thefunds have been provided the total of both the fundsare same which shows that the fund flow statementmade is true.
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