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Published by: South Asian Academic Research Journals
ACADEMICIA:A n I n t e r n a t i o n a l
M u l t i d i s c i p l i n a r y
R e s e a r c h J o u r n a l(A Double Bl ind Referred & Reviewed Internat ional Journal)
A PAPER ON FINANCIAL ANALYSIS OF K2K INFRASTRUCTURE PVT
LTD THROUGH COMPARATIVE AND TREND ANALYSIS
Dr. G. Malyadri*; B. Sudheer Kumar**
*Associate Professor,
Department of MBA,
Sreenivasa Institute of Technology and Management Studies (SITAMS),Chittoor, A.P., India.
**Assistant Professor,
Department of MBA,Vaagdevi Institute of Technology and Science (VITS),
A.P., India.
ABSTRACT
Financial management is planning organizing, Directing and controlling various
financial activities of the organization. In order to perform all the managerial
function effective and efficiency, sufficient, past and present information about theform and its operation should be equipped along with this changes overtime. Astatement portion of information required in financial decision-making is found in
financial statements, particularly, the income statements and the balance sheetfinancial statements and the balance sheet financial statement, particularly, the
income statements and the balance sheet financial statements also help inforecasting the financial effects of planning.
KEYWORDS: Financial Statement Analysis, Comparative Income Statement &
Balance Sheet, Comparative Statement Analysis, Common Size Statement Analysis,Trend Analysis.
_________________________________________________________________________
INTRODUCTION
Financial Management emerged as a distinct field of study at the turn of this century. Many
eminent persons defined it in the following ways.
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DEFINITION OF FINANCIAL MANAGEMENT
1. ACCORDING TO GUT HMANN AND DOUGHAL: Business finance can broadly be
defined as the activity concerned with planning, rising, controlling and administering of used inthe business.
2. ACCORDING TO BONNEVILE AND DEWEY: Financing consists is the rising,providing and managing of all the money, capital or funds of any kind to be used in connection
with business.
TYPES OF FINANCIAL ANALYSIS
The process of financial analysis may be classified based on the nature of information used andas the basis of methodology of operation.
1. ON THE BASIS OF NATURE OF INFORMATION USED:
A. EXTERNAL ANALYSISThe information used is that which is freely available to any body published financial statementare an example of such information. There is no access to internal records of an organization
with increasing emphasis on disclosers in recent timer the quality of external analysis is likely toimprove in the future.
B) INTERNAL ANALYSIS
The source of information is internal analysis is the internal for use of mgt. For other internal
needs of the organizations.
2. ON THE BASIS OF METHODOLOGY OF OPERATION:
A) HORIZONTAL ANALYSIS
It involves analysis and review of financial statements; pertaining to a number of years. An
attempt is made to identify the periodical trend of various items in the financial statementpercentage Increases/Decreases is calculated for all such item. Alternatively base years are
indexed to that of base period.
TRENDS ANALYSIS: -It is also known as dynamic analysis.
VERTICAL ANALYSIS: - Vertical analysis involves anglicizing a single set offinancial statement, by expressing various items of the statement, as a percentage of aparticulars item. Quantitative relationship is established among great various items at a
particular data. It is also known as Static analysis (or) structural analysis.
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TECHNIQUES OF FINANCIAL STATEMENT ANALYSIS
A. Comparative statement analysis.B. Common Size Statement Analysis.C. Trend analysis.D. Fund flow analysis.E. Cash flow analysis.F. Ratio analysis.A. COMPARATIVE STATEMENT ANALYSIS
The comparative financial statements are statements of the financial position at different periodof time. The elements of financial position are shown in a comparative form so as to give an
idea of financial position at two or more periods. Any statement prepared in a comparative formwill be covered prepared in a comparative form for financial statements (Balance sheet and
income statement) are prepared in comparative form of financial analysis purposes.
A.COMPARATIVE BALANCE SHEETSThe comparative balance sheet analysis is the study of the trend of the same items, group ofitems and computed items in two or more balance sheets of the same business enterprise an
different dates. The changes in periodic balance sheet items reflect the conduct of a business.
B.INTERPRETATION OF COMPARATIVE BALANCE SHEETWhile interpretation comparative balance sheet the interpretation is expected to study thefollowing aspects.
1)Current financial position and liquidity position,2)Long-term financial position,3)Profitability of the concern,4)For studying current financial position or short term financial position of a concern oneshould see the working capital in both the years. The excess of current assets over currentliabilities will give the figures of working capital.
5)The increase in working Capital will mean improvement in the current financial position ofthe business. An increase in current assets accompanied by the increase in current liabilities of
the same amount will not show any improvement in the short-term financial position.
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6)The long term financial position of the concern can be analyzed by studying the changes infixed assets, long term liabilities and capital the proper financial policy of the concern will be
finance fixed assets by the issue of either long term securities such as debentures, bonds, loansfrom financial institution on issue of fresh share capital. An increase in fixed assets should be
compared to the increase in long-term loans and capital.
7)The next aspect to be studied in a comparative balance sheet question is the profitabilitybalance sheet question is the profitability of the concern. The study of increase or decrease inretained earnings, various resources and surplus etc. Will enable the interpretation to see
whether the profitability has improved or not.
8) After studying various assets and liabilities an opinion should be formed about the financialposition of the concern are cannot say if short term financial position is good then long termfinancial position is good then long term financial position will also be good or vice-versa.
B. COMMON SIZE STATEMENT ANALYSIS
A common size statement facilitates comparison of financial statements of not only a single firmover a time period but also comparison of financial statements of different companies offinancial statements of different companies for any given time. Under this method, all the times
of the statement are presented as percentages or rations of a particulars item. Therefore, Even ifthe absolute figures relates to a vastly. Different scale of operations, a common base for
comparison is created.
In case of common size income statement, all items are presented as a percentage of net sellers.
A common size balance sheet shows each item as a Percentage of total asset or total liabilities.A common size statement helps in determining the relative efficiency and sounders of a firm and
helps in understanding its financial strategy.
C. TREND ANALYSIS
Trend analysis involves computations of index number of the movements of the various financialitems in the financial statements for a no. of periods. It helps in understandings the nature and
rate of movements in various financial factors however; conclusion should not be drawn on thebasis of a single trend. Trends of related items should be carefully studied. Due weighted
should be given to extraneous factors such as govt. policy, economic policy, economicconditions etc, as they can affect the trend significantly.
POINTS TO BE NOTED
1. The accounting policies for the entire period should be uniform.2. Trend values must be read along with absolute values.3. Non-Financial factors should be considered while interpreting the trend.
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D. FUND FLOW ANALYSIS
A funds flow statements is a statement which explain the various sources from which funds were
raised and the user to which these funds were put. (The reader may notice that this definition offunds flow statement comes disconcertingly close to the definition of a balance sheet. Since
liabilities and assets are themselves sources and user of funds.
Respectively even a balance sheet itself may be considered a form of funds flow statement one
would notice that in fact the balance sheet of most companies are increasingly being expressed inthe Sources of funds and Application of funds formats.
The major differences, however, between a true fund flow statement and a balance sheet lies inthe fact that the former capturer the movements in funds. While the latter merely presents a
static picture of the sources and user of funds an account of this property a funds flow statementwould enable one to see how the business financed its fixed assets, built up the inventory,
discharged its liabilities, paid its dividends and taxes and so on. Similarly it would enable one tosee how the business managed to meet the above capital or revenue expenditure was it by raising
additional capital or loans from public? Was it by stretching the trade creditors or by incurringsome other liabilities.
E. CASH FLOW ANALYSIS
Cash flow analysis involves the preparation of a cash flow statement from one period to another.
The term cash includes cash and bank balance. This statement is very much similar to thestatement of funds flow statement focuses attention cash instead of working capital.
F. RATIO ANALYSIS
Ratios are well known and widely used tools of financial analysis. A ratio gives themathematical relationship between one variable and another. Though the computation of a ratioinvolves only a simple arithmetic operation, its interpretation is a difficult exercise. The analysis
of a ratio can disclose relationship as well as basis of comparison that reveal conditions of theratio.
The usefulness of ratios is ultimately dependent on their intelligent and skill interpretation.
REVIEW OF LITERATURE
1. ENVIRONMENTAL AND FINANCIAL PERFORMANCE LITERATUREDonald P.Cram, on March 27 , 2000
The study reviews the growing literature relating corporate environmental performance tofinancial performance. The researchers seek to identify achievements and limitation of this
literature and to highlights areas for further research. This studys primary interest is to assess theadequacy of the literature in informing corporate managers how, when, and where to make pro-
environment investments that will be pay off with financial returns for long-term shareholders.
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To do so, we create a conceptual framework that maps the influence of regulators, public healthscientists, environmental advocates, consumers, employees, and other interested parties
interested in influencing corporate actions that effect the environment.
2. IMPLICATIONS FOR FINANCIAL PERFORMANCE AND CORPORATESOCIAL RESPONSIBILITY
Philippe Jacquart, Catherine Ramus & John Antonakis, on may 23, 2004
This study investigated whether CEO implicit motives predict corporate social performanceand financial performance. Using longitudinal data on 258 CEOs from 118 firms, and
controlling for country and industry effects, we found that motives significant predicated bothfinancial performance (Tobins Q & the CAPM) and social responsibility. In general, need for
and responsibility disposition were positively predictive whereas need for achievement andaffiliation were negatively predictive of outcomes. Contrary to previous theorizing, corporate
social responsibility had no link to financial performance. Our findings suggest that executivecharacteristics have important consequences for corporate level outcomes.
NEED OF THE PAPER
Financial analysis is a process of identifying the strength and weakness of the company to
establishing the relationship between the balance sheet and profit &loss account.
The financial data can be used to analyze the firm past performance and assess in presentfinancial strength.
Hence the present study is made to analyze the financial health of the company.
OBJECTIVES
1. To study the financial statements of K2K Infrastructure pvt., ltd.2. To evaluate the financial efficiency through suitable tools.3. To analyze the sales, stock and profit of the company.METHODOLOGY
The research methodology used for this study includes both primary & secondary sources of
data. However most of the study is conducted based on secondary sources.
TYPE OF RESEARCH:
This study is an analytical one which is based on the existing facts & figures and the method ofthe study is descriptive.
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NATURE OF DATA
1. Primary sources of data were collected through interviews and meetings or discussions with
executives and top managers in the financial departments of this company itself.
2. Secondary sources of data were collected for this study and they are from annual reports,
official websites, books & journals.
TOOLS USED
1. Comparative income statement &
2. Balance sheet and
3. Trend Analysis are the tools used for the analysis and Bar charts are used in it.
DATA ANALYSIS AND INTERPRETATION
FINANCIAL STATEMENT ANALYSIS
Financial statement analysis is defined as the process of identifying financial strengths and
weakness of the firm by properly establishing relationship between the items of the balance sheetprofit and loss account.
There are various methods or techniques that are used in analyzing financial statements, such ascomparative statements, common size percentages and trend analysis.
COMPARATIVE INCOME STATEMENT
The comparative income statement summarizes and compares income and expenses across twoor more specified time periods. You can use to compare your companys performance withprevious years.
This comparison helps you to measure your companys progress and to make future projections.
COMPARATIVE BALANCE SHEET
A comparative balance sheet is designed to show financial differences between severalaccounting periods. A balance sheet is a detail account of everything lost and gained financially
during a certain time, containing both physical and abstract data.
A comparative balance sheet is useful because a business can instantly compare profits and
losses between different time periods. Most businesses use comparative balance sheets to helpincrease profits and functionality of a company.
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TREND ANALYSIS
Trend analysis is a form of comparative analysis that is often employed to identify current and
future movements of an investment or group of investments. The process may involve comparingpast and current financial ratios as they related to various institutions in order to project how long
the current trend will continue. This type of information is extremely helpful to investors whowish to make the most from their investments. The process of a trend analysis begins with
identifying the category of the investments that are under considerations. Once the focus isestablished, the investors take a long at the general performances for the category over the last
couple of years. After identifying past and present factors that are maintaining a current trend inperformance, the investor can analyze each factor and project which factors are likely to continue
exerting influence on the direction of the investment. Assuming that all or most of the factorswill continue to exerting influence for the foreseeable future, the investor can make an informed
decision on whether to buy or sell a given assets.
A Trend Analysis may be used to identify and project upswings in the performance of a stock or
commodity to identify the potential for an upcoming downturn in value. By comparing the
financial ratio of the past with the present and identifying key factors that helped the investmentto arrive at the current point, it is possible to use the process of trend analysis to project futureworth and adjust the components of the financial portfolio accordingly.
ANALYTICAL PART OF FINANCIAL STATEMENT ANALYSIS
COMPARATIVE INCOME STATEMENT & BALANCE SHEET
COMPARATIVE INCOME STATEMENT [2007 & 2008]
TABLE NO: 1: COMPARATIVE INCOME STATEMENT OF K2K
INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-08
PARTICULARS MARCH-31 INCREASE / DECREASE
2007 2008 AMOUNT PERCENTAGE
Net sales
Cost of goods sold
Gross profit(A)
Operating expenses
Employee benefit
Depreciation &amortization expenses
68,51,329,288
45,85,338,729
83,47,962,546
55,32,852,108
1,49,66,33,258
94,75,13,379
21.84
20.66
22,65,990,559 28,15,110,438 54,91,19,879 24.23
1,25,70,58,350
11,35,52,319
1,59,39,73,597
13,60,39,414
33,69,15,247
2,24,87,095
26.80
19.80
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Total operating
expenses(B)
Operating income(A-B)
Non Operating income
Other income
Non Operating expenses
Other expenses
Profit Before interest &
tax
Interest (finance cost)
Profit Before Tax
Tax
Provision for taxadjustments
Profit after tax
1,37,06,10,669 1,73,00,13,011 35,94,02,342 26.22
8,95,379,890
20,74,78,708
60,71,93,931
(39,97,15223)
29,46,986.80
10,50,165,43
11,89,98,685
(6,64,879)
1,08,50,97,427
26,03,9887
73,92,60,892
(47,89,210,05)
36,30,471,71
115,873,834
14,35,34,982
(1,17,66,272)
18,97,17,537
5,28,61,179
13,20,66,961
7,92,05,782
6,83,48,491
1,08,57,291
2,45,36,297
5,11,801
21.19
25.48
21.75
19.81
23.19
10.34
20.62
76.98
(1,33,17,271) (2,64,84,476) 3,98,01,747 298.87
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008
INTERPRETATION
From the above table-3.1, it shows that the comparative Income Statement of K2K Infra
Structure PVT. LTD., for the years 2007 & 2008. By comparing the year 2008 with 2007 ofIncome & Expenditure, the sales have increased 21.84 percent while the cost of goods sold has
increased by 20.66 percent and the operating expenses have increased to 26.22 percent. Duringthe year 2007, it reflects a favorable impact on net profit because costs increased at a faster rate
than sales.
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COMPARATIVE BALANCE SHEET [2007 & 2008]
TABLE NO: 2: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD.AS AT 31-03-08
ASSETS
PARTICULARS MARCH 31ST INCREASE /DECREASE
2007 2008 AMOUNT PERCENTAGE
Fixed Assets
(Net Block)
Investments
Current Assets:
Inventories
Trade Receivables
Cash & cash equivalents
Short term loan & advance
Other current Assets
Total current assets
Total Assets
69,23,09,273
44,07,775,965
25,99,100,130
31,78,530,958
12,06,12,411
58,52,60,974
71,84,22,727
72,01,927,200
84,42,79,601
53,35,118,006
31,39,146,500
39,06,745,071
19,58,68,794
67,71,47,529
86,39,30,154
87,82,838,048
15,19,70,328
92,73,42,041
54,00,46,370
72,82,14,113
7,52,56,383
9,18,86,555
14,55,07,427
15,80,910,848
21.95
21.04
20.79
22.91
0.62
15.70
20.25
21.95
12,30,201,244 22,56,075,207 10,25,873,963 83.39
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,
for the years 2007 & 2008. By comparing the year 2008 with 2007 of Assets, the fixed assetshave increased to 21.95 percent and the current assets have increased by 21.95 percent. Finally,
the total assets were increased at 83.39 percent.
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COMPARATIVE INCOME STATEMENT [2007 & 2008]
TABLE NO: 3: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD.AS AT 31-03-08
LIABILITIES
PARTICULARS MARCH-31 INCREASE/ / DECREASE
2007 2008 AMOUNT PERCENTAGE
Capital and reserves
Long term loans
Current liabilities
Short term borrowings
Trade payables
Other current liabilities
Short term provisions
Total current liability
Total liabilities
4,20,23,35,965
73,89,63,023
1,36,79,49,161
1,53,88,84,602
2,30,00,82,244
14,13,03,065
53,48,21,90,720
5,12,96,78,006
89,62,96,370
1,59,50,59,953
1,90,10,78,783
2,85,37,58,835
17,23,20,811
6,52,22,18,382
92,73,42,041
15,73,33,347
22,71,10,792
36,21,94,181
55,36,76,591
15,80,17,746
4,69,59,97,234
22.07
21.29
16.60
23.54
24.07
111.83
87.80
12,30,201,244 22,56,075,207 10,25,873,963 83.39
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2008
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,
for the years 2007 & 2008. By comparing the year 2008 with 2007 of Liabilities, the capital &reserves have increased to 22.07 percent and the current liabilities have increased by 87.80
percent. Finally, the total assets were also increased at 114.78 percent.
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COMPARATIVE INCOME STATEMENT [2008 & 2009]
TABLE NO: 4: COMPARATIVE INCOME STATEMENT OF K2K
INFRASTRUCTURE PVT LTD., FOR THE Y.E.31-03-09
PARTICULARS MARCH-31 INCREASE / DECREASE
2008 2009 AMOUNT PERCENTAGE
Net sales
Cost of goods sold
Gross profit(A)
Operating expenses
Employee benefitDepreciation &
amortization expenses
Total operating
expenses(B)
Operating income(A-B)
Non Operating Incomes
Other income
Non Operating
expenses
Other expenses
Profit Before interest &tax
Interest (finance cost)
Profit Before TaxTax
Provision for taxadjustments
Profit after tax
83,47,962,546
55,32,852,108
97,05,770,402
64,20,176,870
13,57,807,856
88,73,24,762
16.27
16.04
28,15,110,438 32,85,593,532 47,04,83,094 16.71
15,93,973,59713,60,39,414
18,54,620,46215,70,22,574
26,06,46,8652,09,83,160
16.3515.42
17,30,013,011 20,11,643,036 28,16,30,025 16.28
10,85,097,427
26,03,39,887
73,92,60,892
(47,89,21,005)36,30,47,171
11,58,73,834
14,35,34,982(11,76,672)
12,73,950,496
30,03,95,218
76,65,82,432
(46,61,87,214)42,21,47,873
4,40,39,341
16,56,22,07224,14,734
18,88,53,069
40,055,331
27,321,540
(94,51,08,219)5,91,00,702
(71,834,493)
22,087,09012,38,062
1740.
15.38
3.69
-197.3416.28
-61.99
15.39105.22
10,16,380,524 (11,91,67,667) (11,35,548,521) -11.72
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2008 & 2009
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INTERPRETATION
From the above table, it shows that the comparative Income Statement of K2K Infra Structure
PVT. LTD., for the years 2008 & 2009. By comparing the year 2009 with 2008 of Income &Expenditure, the sales have increased 16.27 percent while the cost of goods sold has increased by
16.04 percent and the operating expenses have increased to 16.28 percent. During the year 2009,it reflects a favorable impact on net profit because costs increased at a faster rate than sales.
COMPARATIVE BALANCE SHEET [2008 & 2009]
TABLE- 5: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD.AS AT 31-03-09
ASSETS
PARTICULARS MARCH-31 INCREASE / DECREASE
2008 2009 AMOUNT PERCENTAGE
Fixed Assets
(Net Block)
Investments
Current Asset
Inventories
Trade Receivables
Cash & cash equivalents
Short term loan & advance
Other current Assets
Total current assets
Total Assets
84,16,75,454
53,27,118,006
31,39,146,500
39,06,745,071
19,58,68,794
67,71,47,529
86,39,30,154
87,82,838,048
84,16,75,454
56,33,118,006
31,39,146,500
39,06,745,071
19,58,68,794
67,71,47,529
86,39,30,154
87,82,838,048
(30,60,00,000) -5.74
14,95,163,151 15,25,763,151 (30,600,000) -2.05
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2008 & 2009
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INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,
for the years 2008 & 2009. By comparing the year 2009 with 2008 of Assets, the fixed assetshave decreased to nil percent and the current assets have in decreased by 00.00 percent. Finally,
the total assets were decreased at -2.05 percent.
TABLE- 6: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD., AS AT 31-03-09
LIABILITIES
PARTICULARS MARCH-31 INCREASE / DECREASE
2008 2009 AMOUNT PERCENTAGE
Capital and reserves
Long term loans
Current liabilities
Short term borrowings
Trade payables
Other current liabilities
Short term provisions
Total current liability
Total liabilities
51,21,678,006
89,62,96,370
15,95,059,953
19,01,078,783
28,53,758,835
17,23,20,811
65,22,218,382
51,29,678,006
89,62,96,370
15,95,059,953
1,90,10,78,783
2,85,37,58,835
17,23,20,811
6,52,22,18,382
(80,00,000) -0.15
14,95,163,151 15,25,763,151 (30,600,000) -2.05
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2008 & 2009
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2008 & 2009. By comparing the year 2009 with 2008 of Liabilities, the capital &reserves have decreased to -0.15 percent and the current liabilities have decreased by 0.00
percent. Finally, the total assets were also increased at 900.64 percent.
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INTERPRETATION
From the above table, it shows that the comparative Income Statement of K2K Infra Structure
PVT. LTD., for the years 2009 & 2010. By comparing the year 2010 with 2009 of Income &Expenditure, the sales have increased 38.86 percent while the cost of goods sold has decreased
by -78.02 percent and the operating expenses have increased to 36.78 percent. During the year2010, it reflects a favorable impact on net profit because costs increased at a faster rate than
sales.
COMPARATIVE BALANCE SHEET [2009 & 2010]
TABLE-8: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD.AS AT 31-03-10
ASSETS
PARTICULARS MARCH-31 INCREASE / DECREASE
2009 2010 AMOUNT PERCENTAGE
Fixed Assets
(Net Block)
Investments
Current Assets
Inventories
Trade Receivables
Cash & cash equivalentsShort term loan & advance
Other current Assets
Total current assets
Total Assets
98,17,20,466
13,78,25,496
35,33,891,27
9
43,10,168,687
22,77,54,411
67,11,01,778
84,33,64,691
95,86,280,846
10,72,102,792
16,84,53,384
40,94,756,008
48,81,317,284
22,94,77,61332,02,35,507
69,63,34,622
10,22,212,103
90,382,326
30,627,888
56,08,64,729
57,11,48,597
17,23,202(35,08,66,271)
(14,70,30,069)
63,58,40,188
9.21
22.22
15.87
13.25
0.76-52.28
-17.43
6.63
10,70,582,68
1
22,62,768,219 11,92,185,538 111.36
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2009 & 2010
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,
for the years 2009 & 2010. By comparing the year 2010 with 2009 of Assets, the fixed assets
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have increases to 9.21 percent and the current assets have in increased by 6.63 percent. Finally,the total assets were increased at 111.36 percent.
TABLE-9: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD.AS AT 31-03-10
LIABILITIES
PARTICULARS MARCH-31 INCREASE / DECREASE
2009 2010 AMOUNT PERCENTAGE
Capital and reserves
Long term loans
Current liabilities
Short term borrowings
Trade payablesOther current liabilitiesShort term provisions
Total current liability
Total liabilities
5,13,76,78,006
4,56,67,531
1,85,47,20,876
2,20,12,54,3993,27,11,14,92220,03,73,037
7,52,74,63,234
5,17,76,78,006
2,57,41,711
1,96,68,81,070
2,69,04,22,0433,99,35,84,9052,94,19,00,378
11,59,27,884
4,00,00,000
(1,99,25,820)
11,21,60,194
48,91,67,64472,24,69,983
2,74,15,27,341
4,66,53,25,162
0.78
-43.63
6.05
22.2222.09
1368.21
54.01
10,70,582,681 22,62,768,219 11,92,185,538 111.36
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2009 & 2010
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2009 & 2010. By comparing the year 2010 with 2009 of Liabilities, the capital &
reserves have decreased to 0.78 percent and the current liabilities have increase by 54.01 percent.Finally, the total assets were also increased at 318.49 percent.
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COMPARATIVE INCOME STATEMENT [2010 & 2011]
TABLE-10: COMPARATIVE INCOME STATEMENT OF K2K INFRASTRUCTURE
PVT LTD., FOR THE Y.E.31-03-11
PARTICULARS MARCH-31 INCREASE / DECREASE
2010 2011 AMOUNT PERCENTAGE
Net salesCost of goods sold
Gross profit(A)
Operating expenses
Employee benefit
Depreciation &amortization expenses
Total operating
expenses(B)
Operating income(A-
B)
Non Operating
Income
Other income
Non Operating
expenses
Other expenses
Profit Before interest
& taxInterest (finance cost)
Profit Before Tax
TaxProvision for tax
adjustments
Profit after tax
13.47.74.58,8921,41,09,34,525
15,32,66,57,8321,00,59,46,476
184,91,98,940(40,49,88,049)
13.72-28.70
1,20,66,52,437 1,43,20,71,135 1,30,04,05,892 1086.81
2,57,51,67,308
17,64,20,242
294,90,53,759
19,99,09,366
37,38,86,451
2,34,89,124
14.52
13.31
2,75,15,87,550 3,14,89,63,125 39,73,75,575 14.44
(1,54,49,35,113)
41,02,71,136
1,02,30,31,156
(61,27,60,020)
57,54,27,601
4,03,32,41922,73,36,211
(38,14,909)
(1,71,68,91,990)
46,62,17,200
1,18,52,62,677
(71,90,45,477)
65,10,54,092
6,79,91,38525,78,82,058
(37,66,942)
3,26,18,27,103
5,59,46,064
16,16,31,521
1,33,18,05,497
7,86,26,491
2,76,58,9663,05,45,847
(47,967)
-211.13
13.64
15.80
217.34
13.73
68.5813.44
-1.26
(18,31,88,883) (18,61,23,731) (36,93,12,614) -201.60
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2010 & 2011
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INTERPRETATION
From the above table, it shows that the comparative Income Statement of K2K Infra Structure
PVT. LTD., for the years 2010 & 2011. By comparing the year 2011with 2010 of Income &Expenditure, the sales have increased 13.72 percent while the cost of goods sold has decreased
by -28.70 percent and the operating expenses have increased to 14.44 percent. During the year2011, it reflects a favorable impact on net profit because costs increased at a faster rate than
sales.
COMPARATIVE BALANCE SHEET [2010 & 2011]
TABLE-11: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD., AS AT 31-03-11
ASSETS
PARTICULARS MARCH-31 INCREASE / DECREASE
2010 2011 AMOUNT PERCENTAGE
Fixed Assets
(Net Block)
Investments
Current Assets
InventoriesTrade Receivables
Cash & cash equivalentsShort term loan &
advance
Other current Assets
Total current assets
Total Assets
1,07,21,02,792
16,84,53,384
4,09,47,56,0084,88,13,17,284
22,94,77,61332,02,35,507
69,63,34,622
1,02,22,12,103
1,50,23,89,536
19,14,24,300
4,63,04,04,5545,56,96,78,732
26,07,70,01543,20,85,803
89,35,62,071
1,17,86,50,118
43,02,86,744
2,29,70,916
53,56,48,54668,83,61,448
3,12,92,40211,18,50,296
19,72,27,449
15,64,38,015
9.21
22.22
15.8713.25
0.76-52.28
-17.43
6.63
1,51,25,26,189 8,26,54,89,737 67,52,963,548 446.47
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2010 & 2011
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2010 & 2011. By comparing the year 2011 with 2010 of Assets, the fixed assets
have increases to 40.13 percent and the current assets have in increased by 15.30 percent.Finally, the total assets were increased at 26.94 percent.
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TABLE-12: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD., AS AT 31-03-11
LIABILITIES
PARTICULARS MARCH-31 INCREASE / DECREASE
2010 2011 AMOUNT PERCENTAGE
Capital and reserves
Long term loans
Current liabilities
Short term borrowingsTrade payables
Other current liabilities
Short term provisions
Total current liability
Total liabilities
5,17,76,78,006
1,00,17,95,484
1,96,68,81,0702,69,04,22,043
3,99,35,84,905
29,49,00,378
8,94,57,88,396
5,42,76,78,006
1,83,26,08,504
2,57,60,01,2163,05,72,97,776
4,14,04,37,393
27,82,95,882
1,00,52,03,227
25,00,00,000
83,08,13,020
60,91,20,14636,68,75,733
14,68,52,488
(1,66,04,496)
1,10,62,43,871
0.78
-43.63
6.0522.2
22.09
1368.21
12.37
1,51,25,26,189 8,26,54,89,737 67,52,963,548 446.47
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2010 & 2011
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,for the years 2010 & 2011. By comparing the year 2011 with 2010 of Liabilities, the capital &
reserves have decreased to 4.83 percent and the current liabilities have increase by 12.37 percent.Finally, the total assets were also increased at 446.47 percent.
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INTERPRETATION
From the above table, it shows that the comparative Income Statement of K2K Infra Structure
PVT. LTD., for the years 2011 & 2012. By comparing the year 2012with 2011 of Income &Expenditure, the sales have increased 25.25 percent while the cost of goods sold has increased by
31.42 percent and the operating expenses have increased to 28.47 percent. During the year 2012,it reflects a favorable impact on net profit because costs increased at a faster rate than sales.
COMPARATIVE BALANCE SHEET [2011 & 2012]
TABLE-14: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD.AS AT 31-03-12
ASSETS
PARTICULARS MARCH-31 INCREASE / DECREASE
2009 2010 AMOUNT PERCENTAGE
Fixed Assets
(Net Block)
Investments
Current Assets
InventoriesTrade Receivables
Cash & cash equivalentsShort term loan &
advance
Other current Assets
Total current assets
Total Assets
1,50,23,89,536
19,14,24,300
4,63,04,04,5545,56,96,78,732
26,07,70,01543,20,85,803
89,35,62,071
1,17,86,50,118
1,70,56,64,858
19,14,29,300
5,12,25,44,8875,86,34,80,854
8,19,02,61648,00,80,455
1,35,17,98,396
1,28,99,80,721
20,32,75,322
5,000
49,21,40,33329,38,02,122
(17,88,67,399)4,79,94,652
45,82,36,325
1,17,21,15,709
13.53
0.02
10.635.27
-2.6211.11
51.28
994.46
6,49,63,08,360 6,67,54,21,215 17,91,12,855 27.58
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2011 & 2012
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,
for the years 2011 & 2012. By comparing the year 2012 with 2011 of Assets, the fixed assetshave increases to 13.53 percent and the current assets have in increased by 994.46 percent.
Finally, the total assets were increased at 10.95 percent.
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TABLE-15: COMPARATIVE BALANCE SHEET OF K2K INFRASTRUCTURE PVT
LTD., AS AT 31-03-12
LIABILITIES
PARTICULARS MARCH-31 INCREASE / DECREASE
2011 2012 AMOUNT PERCENTAGE
Capital and reserves
Long term loans
Current liabilities
Short term borrowingsTrade payables
Other current liabilitiesShort term provisions
Total current liability
Total liabilities
5,42,76,78,006
6,34,27,127
2,57,60,01,2163,05,72,97,776
4,14,04,37,39327,82,95,882
1,00,52,03,227
5,43,16,21,283
6,76,45,165
3,03,62,04,2853,79,34,14,229
4,89,59,94,8463,59,34,314
1,17,61,54,767
(4,88,45,15,723)
42,18,038
46,02,03,06973,61,16,453
75,55,57,453(24,23,61,568)
1,07,56,34,445
-89.99
6.50
17.8624.08
18.25-87.09
1070.07
6,49,63,08,360 6,67,54,21,215 17,91,12,855 27.58
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2011 & 2012
INTERPRETATION
From the above table, it shows that the comparative Balance Sheet of k2k Infrastructure Pvt Ltd.,
for the years 2011 & 2012. By comparing the year 2012 with 2011 of Liabilities, the capital &reserves have decreased to -89.99 percent and the current liabilities have increase by 1070.07
percent. Finally, the total assets were also increased at 27.58 percent.
TREND ANALYSIS
TREND ANALYSIS [20072012]
TABLE- 16: STATEMENT SHOWING TREND PERCENTAGES OF K2K
INFRASTRUCTURE PVT LTD., FROM 2007-2012
YEA
RS
SALES STOCKS PROFIT BEFORE TAX
AMOUNT PERCENTAGE
AMOUNT PERCENTAGE
AMOUNT
PERCENTAGE
20082009
20102011
2012
8,34,79,62,546
9,70,57,70,402
13,47,74,58,
100116.26
138.86113.72
125.35
3,13,91,46,500
3,53,38,91,279
4,09,47,56,
100112.57
115.87113.08
110.63
11,58,73,834
4,40,39,341
4,03,32,4
10038.01
91.58168.57
121.61
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892
15,32,66,57,832
19,21,20,03,939
008
4,63,04,04,554
5,12,25,44,887
19
6,79,91,385
8,26,82,452
Source: Annual Report from K2K Infrastructure Pvt Ltd.., for the years 2007 & 2012
INTERPRETATION
From the above Table-4.16, it shows that the Trend Percentages of K2K., from the years 2007-2012. By analyzing the years from 2007 to 2012 of Trend Percentages, the sales have increased
to 125.35 percent over the five year period while the stock fluctuates up to 2010 & has increasedby 110.63 percent in 2012 and the Profit before Tax is fluctuating & have increased to 121.61
percent in 2012. The trend look different if evaluated after five years. The trend percentages forprofit appear to be higher because the base year amount is much smaller than the other balances
and also fluctuates.
CHART-17: TREND PERCENTAGES OF K2K INFRASTRUCTURE PVT LTD.,FROM THE YEARS 2007-2012
5. FINDINGS
The sales factor is gradually increasing from the year 20008 to 2012.
The stock is also maintained in a satisfactory level. But it holds more in 2012.
There is a fluctuation in the profit and also huge loss occurred in 2011. The assets must be utilized efficiently. There is a decreasing trend in the liabilities.
0
20
40
60
80
100
120
140
160
180
2007-2008 2008-2009 2009-2010 2010-2011 2011-2012
Percentages
Years
Trend Percentage
SALES
STOCK
PROFIT BEFORE TAX
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The share holders fund is increasing gradually. So that it initiates the share holders toinvest more in the company.
The company also maintains the reserves in the satisfactory level to meet thecontingencies.
6. CONCLUSION:
The above analysis and the interpretation done with the help of the tools like Comparative
Income Statement & Balance Sheet & Trend Analysis. The sales, stock, profit before tax,current assets, current liabilities and all the financial factors are strong enough to increase the
profit in future also.
This study shows that the overall financial performance of K2K Infrastructure Pvt Ltd.,
is to the mark during the year 2012 in comparison to the rest of the past four years. Theirfinancial growth is optimum even a loss occurred during the year 2008 and they had a tax benefit
in the year 2009.
At last, I conclude that by doing this project work, I got a view about the K2K
Infrastructure Pvt Ltd., a major producer of construction materials in the country. The industryacts as a manufacturer, distributor and has acquired a worldwide reputation for its innovative
skills, the reliability of its products and the quality of its services. From the financial statementanalysis the companys overall position is good and also the performance of the company is
satisfactory.
7. REFERENCE
BOOKS
1. Annual report of K2K infrastructure Pvt Ltd., from 20072012.2. Pandey I.M. 1997, Financial Management, Vikas Publishing House Private Limited,
New Delhi.
3. Sharma R.K. Shashi and K.Gupta 1996, Management Accounting and FinancialManagement.
4. Prasanna Chandra, Financial Management Theory & Practice, Tata McGraw-Hillpublishing Company Limited, New Delhi.
WEBSITES
www.k2kinfra.net
www.investpedia.com
www.wikipedia.com
www.moneycontrol.com
http://www.k2kinfra.net/http://www.investpedia.com/http://www.wikipedia.com/http://www.wikipedia.com/http://www.investpedia.com/http://www.k2kinfra.net/