FINANCIAL STATEMENTS

ANALYSIS
 Profit & Loss Statement

Opening + Purchases - Closing

Employee cost & other costs

always take as a % of Op. Rev

Anything other than Op.Rev

Forex changes, sale of Interest on various debt
business operations etc instruments, bank charges &
other transaction costs
 Balance Sheet
Equity Capital P&M, Furniture, Fixtures
+ Reserves & Surplus etc
+ Share allocation
money Goodwill, Trade mark,
Patents
Long term debt
+ Current maturity of
LT debt
+ Short term debt
+ Interest accrued
+ Debt like items

All the non-

operational assets &
liabilities
 Cash flow

Include capital
creditors

Includes infusion in
equity

Includes debt raised

and debt redeemed

Separate group
investments from
other investments
Financial Statement Linkages
Ratio Analysis
Gross margin indicate the competitiveness and
market position of the entity within the industry

EBITDA margin is the key critical ratio which

reflects the operational profits of the entity
It is important to understand the driver of this
ratio

PAT margins reflects the profitability of the

entity post factoring external obligation costs

Key ratios which measure the profitability in

relation to the capital deployed by the entity

Assists in understanding whether the returns

are driven via equity or debt or both
Total Debt to EBITDA reflects the debt
repayment ability of the entity

Debt to Equity reflects the % of outside debt

to the equity infused by the promoters

DSCR measures the serviceability of the debt

ICR measures the serviceability of interest

payment by the entity
R-Days helps measure the time taken in days
by the entity to recover its dues from the
customers

I-Days helps measure the amount of working

capital locked in the entity’s stock

P-Days helps measure the time taken in days

by the entity to repay its dues to its suppliers

GCA to sales helps measure the amount of

receivables and stock as a % of sales

NCA to sales helps measure the amount of

net WC position as a % of sales
THANK YOU