AID13213: Given below are the financial statements of Safal Enterprises, using the tool of ratio analysis comment on the profitability and liquidity position of the firm for the year 2006-07. Total no. of shares outstanding for the firm is 2.69crores. In the view of growth opportunities in the near future the firm has been maintaining a policy of 45% payout

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Question: Given below are the financial statements of Safal Enterprises, using the tool of ratio analysis comment on the profitability and liquidity position of the firm for the year 2006-07. Total no. of shares outstanding for the firm is 2.69crores. In the view of growth opportunities in the near future the firm has been maintaining a policy of 45% payout.

 

Summarized P & L of Safal Enterprises

For the year ended 31 March

Particulars

2006

2007

( Rs. In crores)

Sales

132.00

144.00

Other income

12.00

15.00

Cost of sales

102.96

110.02

Gross margin

29.04

33.98

Operating expenses

 

 

Administration

12.44

14.36

Selling & distribution

4.42

5.36

Profit before interest & tax (PBIT)

24.18

29.26

Interest

3.00

4.01

Profit before tax (PBT)

21.18

25.26

Provision for taxes

7.94

9.47

Profit after tax (PAT)

13.24

15.79

Balance Sheet of Safal Enterprises

Particulars

31/03/06

31/03/07

(Rs in crores)

Assets

 

 

Fixed assets

31.25

37.50

Current assets

 

 

Inventory

14.56

16.64

Accounts receivable

13.20

15.43

Cash

1.50

1.75

Less: Current liabilities

8.55

11.25

Net current assets

20.71

22.57

Total Assets

51.96

60.07

Liabilities &owners equity

 

 

Share capital

27.00

27.00

Reserves & Surplus

4.96

6.36

Debt(bng term)

20.00

26.71

Total

51.96

60.07

 

 

 

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