Accounting for Managers

Assignment 1 PSU heavyweight BHEL has approved the divestment of 5 per cent of government holding in the company. Using the attached financial data of BHEL surface the reason and impact of the divesture. Assignment 2 LNT Finance was one of the most awaited IPO of 2011 .Incorporated in 2008, L&T Finance Holdings is a financial holding company offering a diverse range of financial products and services across the corporate, retail and infrastructure finance sectors as well as mutual fund products and investment management services. Promoted by Larsen & Toubro Ltd, one of the leading companies in India, with interests in engineering, construction, electrical and electronics manufacturing and services, information technology and financial services, L&T Finance Holdings is registered with the RBI as a Systemically Important Non-Deposit Taking Non-Banking Financial Company and has applied for registration as a Core Investment Company. Companys operations are arranged into four business groups the Infrastructure Finance Group, the Retail Finance Group, the Corporate Finance Group and the Investment Management Group. LTFs customer includes individual retail customers as well as large companies, banks, multinational companies and small- and medium-enterprises. Objects of the Issue: 1. Repayment of inter corporate deposit issued by Promoter to the Company; 2. To augment the capital base of L&T Finance and L&T Infra, to meet the capital adequacy requirements to support the future growth in their business; 3. To achieve the benefits of listing on the Stock Exchanges; and 4. For other general corporate purposes including meeting the expenses of the Issue. Issue Detail: Issue Open: Jul 27, 2011 Jul 29, 2011 Issue Type: 100% Book Built Issue IPO Issue Size: Equity Shares of Rs. 10 Issue Size: Rs. 1,245.00 Crore Face Value: Rs. 10 Per Equity Share Issue Price: Rs. 51 Rs. 59 Per Equity Share Market Lot: 100 Shares Minimum Order Quantity: 100 Shares Listing At: BSE, NSE CARE / ICRA has assigned an IPO Grade 5 to L&T Finance IPO. This means as per CARE / ICRA, company has Strong Fundamentals. CARE / ICRA assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.

Using Ratio analysis for L&T Finance Comment upon the concerns for declaring IPO.

Balance sheet
Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Sources of funds
Owner's fund Equity share capital Share application money Preference share capital Reserves & surplus 121.77 368.31 21,356. 18 1,063.0 4 6,098.0 7 29,007. 37 120.44 25.09 18,142. 82 955.73 117.14 12,317. 96 58.47 9,470.7 1 56.65 5,683.8 5

Loan funds
Secured loans Unsecured loans Total 1,102.3 8 5,845.1 5,453.6 0 5 25,089. 18,991. 18 13 308.53 245.40 3,275.4 6 13,113. 17 1,832.3 5 7,818.2 5

Uses of funds
Fixed assets Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments 8,897.0 2 2,220.8 2 6,676.2 0 5,575.0 0 24.59 1,421.3 9 4,129.0 2 1,040.9 785.00 857.66 9 14,684. 13,705. 8,263.7 82 35 2 26,673. 49 21,632. 13 5,041.3 6 25,089. 18 23,834. 71 18,277. 57 5,557.1 4 0.26 18,991. 13 7,235.7 8 23.29 1,727.6 8 5,484.8 1 4,188.9 1 25.90 1,242.4 7 2,920.5 4 2,876.3 0 27.93 1,122.8 3 1,725.5 4

699.00 471.22 6,922.2 3,104.4 6 4 16,496. 48 13,928. 17 2,568.3 1 3.06 13,113. 17 12,049. 35 9,542.1 4 2,507.2 1 9.84 7,818.2 5

Net current assets

35,234. 34 Less : current liabilities & 28,372. provisions 99 6,861.3 Total net current assets 5 Miscellaneous expenses not written 29,007. Total 37 Current assets, loans & advances

Notes:
Book value of unquoted investments Market value of quoted 14,684. 11,771. 7,793.0 6,642.8 2,917.1 82 54 4 2 1 2,033.6 1,258.8 1,403.9 1,289.4

Mar ' 11 investments Contingent liabilities Number of equity sharesoutstanding (Lacs)

Mar ' 10

Mar ' 09

Mar ' 08

Mar ' 07

1 1 2 6 1,647.6 1,719.3 1,371.8 1,013.5 270.22 6 9 6 1 6088.52 6021.95 5856.88 2923.27 2832.71

Profit loss account

Mar ' 11 Mar ' 10 Mar ' 09 Mar ' 08 Mar ' 07

Income
Operating income 43,904. 36,870. 33,856. 24,946. 17,645. 91 19 54 11 29 10,016. 52 17,247. 39 2,379.1 4 306.22 1,873.5 9 -36.25 31,786. 61 5,083.5 8 9,211.2 7 16,115. 56 1,998.0 2 312.10 2,102.0 5 -24.48 29,714. 52 4,142.0 2 7,510.2 9 10,998. 08 1,535.4 4 320.12 1,354.3 7 -11.42 21,706. 88 3,239.2 3 5,199.2 2 7,759.2 0 1,258.2 1 200.84 1,197.9 9 -3.30 15,612. 16 2,033.1 3

Expenses
Material consumed Manufacturing expenses 33,431. 62 2,884.5 Personnel expenses 3 Selling expenses 1,952.3 Adminstrative expenses 9 Expenses capitalised 38,268. Cost of sales 54 5,636.3 Operating profit 7 1,443.1 Other recurring income 3 7,079.5 Adjusted PBDIT 0 Financial expenses 647.37 Depreciation 575.81 Other write offs 23.41 5,832.9 Adjusted PBT 1 1,945.8 Tax charges 6 3,887.0 Adjusted PAT 5 Non recurring items Other non cash 70.84 -4.01

974.59 748.80 477.10 458.56 6,058.1 7 995.37 383.65 30.95 4,648.2 0 1,577.0 2 3,071.1 8 1,347.0 8 -45.13 4,890.8 2 770.00 284.83 21.16 3,814.8 3 1,176.1 9 2,638.6 4 3,716.3 3 501.83 195.94 15.66 3,002.9 0 2,491.6 9 331.46 160.13 2,000.1 0

982.05 601.87 2,020.8 1,398.2 5 3

863.78 139.59 1.24 -21.09 12.21 -5.34

Mar ' 11 adjustments Reported net profit Earnigs before appropriation Equity dividend Preference dividend Dividend tax Retained earnings 3,953.8 8 4,061.1 7 882.84 112.82 3,065.5 1

Mar ' 10 4,373.1 3 4,473.6 3 752.75 110.25 3,610.6 3

Mar ' 09 3,481.3 3 3,585.6 4 614.97 101.83 2,868.8 4

Mar ' 08 2,172.6 5 2,250.8 9 495.32 76.26 1,679.3 1

Mar ' 07 1,394.1 3 1,449.8 3 368.25 53.34 1,028.2 4

Ratios
Mar ' Mar ' Mar ' Mar ' Mar ' 11 10 09 08 07

Per share ratios

Adjusted EPS (Rs) Adjusted cash EPS (Rs) Reported EPS (Rs) Reported cash EPS (Rs) Dividend per share Operating profit per share (Rs) Book value (excl rev res) per share (Rs) Book value (incl rev res) per share (Rs.) Net operating income per share (Rs) Free reserves per share (Rs) 63.84 73.68 65.01 74.85 14.50 92.57 51.00 57.88 72.66 79.54 12.50 84.42 45.05 50.28 59.45 64.67 10.50 70.72 69.13 49.36 76.37 55.01 74.35 49.53 81.59 55.18 17.00 13.00 110.81 71.77

352.76 303.28 212.31 325.87 202.30 352.76 303.66 212.73 326.76 203.29 721.11 612.26 578.06 853.36 622.91 12.83 11.52 8.72 9.89 294.74 205.21 319.09 197.15 13.78 12.74 11.56 9.21 12.23 11.39 10.06 8.50 12.98 12.19 8.54 8.78 11.52 10.61 7.74 8.60

Profitability ratios
Operating margin (%) Gross profit margin (%) Net profit margin (%) Adjusted cash margin (%) Adjusted return on net worth (%) Reported return on net worth

18.09 16.81 21.21 21.21 24.39 18.42 23.95 27.99 22.81 24.48

Mar ' Mar ' Mar ' Mar ' Mar ' 11 10 09 08 07 (%) Return on long term funds (%) 22.62 23.19 25.62 28.73 32.59 0.33 0.33 0.33 0.37 0.43 0.52 0.27 0.37 0.24 0.36

Leverage ratios
Long term debt / Equity Total debt/equity Owners fund as % of total source Fixed assets turnover ratio

74.99 72.86 65.47 72.66 73.42 5.06 1.24 1.24 1.18 28.09 5.20 1.23 1.19 1.15 28.73 6.23 1.30 1.22 0.96 6.01 6.09 1.18 1.09 0.86 6.00 6.21 1.26 1.16 0.93 6.11

Liquidity ratios
Current ratio Current ratio (inc. st loans) Quick ratio Inventory turnover ratio

Payout ratios
Dividend payout ratio (net profit) Dividend payout ratio (cash profit) Earning retention ratio Cash earnings retention ratio 25.15 19.72 20.58 26.29 30.04 21.84 18.01 18.92 23.96 26.97 74.39 71.91 72.84 71.72 69.85 77.81 75.25 75.66 74.40 72.95 2.23 6.35 5.92 1.61 7.41 5.75 1.33 7.52 5.72

Coverage ratios
Adjusted cash flow time total 1.60 1.95 debt Financial charges coverage 10.94 6.09 ratio Fin. charges cov.ratio (post tax) 8.04 5.81

Component ratios
Material cost component (% earnings) Selling cost Component Exports as percent of total sales 14.50 Import comp. in raw mat. 36.78 consumed Long term assets / total Assets 0.38 Bonus component in equity 73.86 capital (%) 26.01 27.51 33.09 30.15 0.83 0.92 1.28 1.13 18.62 21.70 22.67 21.36 54.43 44.34 39.78 49.28 0.42 0.35 0.38 0.30

74.67 76.77 53.71 55.44

Using Ratio analysis for L&T Finance Comment upon the concerns for declaring IPO.

Assignment 3

Paul is planning to start a business in the car service industry, in India, but with a twist in the existing deals. He wants to offer the following bouquet of Services to his customers; 1. Servicing of the car. 2. Pick n drop facility for servicing the car: the car is picked from the customer and the customers are offered a drop-off at their next destination. Again the customer would be either delivered the car, after the car is serviced or they may be picked up from their location, to the workshop, to take delivery of the car. 3. Customers shall be offered a service car, of equivalent esteem as the customers own, for the duration their car is at service. To arrange for the above Paul has to plan for the following assets; 1. Deciding upon the brand , the market segment to cater ( for eg. Maruti, Tata, Honda, BMW ) 2. Location for workshop : could be bought or Leased/ hired/ taken on rent 3. Number of Employees : Service Managers, Customer Service Executives, Technicians, Shop floor Managers, Workers, Cleaning Staff, Drivers, Peons & non technical Staff 4. Machines and Facilities to be purchased, number of cars to be maintained ( how many numbers of different models has to be decided, accordingly they have to insured & serviced) 5. Spare Part Inventory to be maintained, Other consumables (for eg. oil, grease, nuts & bolts, welding requirements ) Research the Pune market for a car brand of your choice. Take a decision on the level of operation ( for eg. You decide to service not more then 100 cars a day) and find the relevant financial data as discussed above. Prepare a variable budget for Paul at 4 different operational capacity and discuss the viability of his business idea under each circumstances. Pls give details of the source of your data for the assignment. E.g. page no and name of publication or business card of contact person etc-..

Human Dynamics Assignment No. 1

Mention any three situations, faced by you or by an employee of any organization, in which attitude, personality and motivation played a major role. Explain each of the situations in detail and provide solutions to handle such situations.

Human Dynamics Assignment No. 2

From a job portal, make a list of 5 job profiles. Each list will consist of the following: 1. Job title 2. Job description 3. Job Specification

4. Suggestions from your side to improve point no. 2 and 3

Human Dynamics Assignment No. 3

Make a list of cultural Dos and Donts (related to corporate world) of the following countries: 1. India 2. U.S 3. UK 4. China 5. Australia 6. Gulf Countries

Managerial Economics Assignments 1. Analyze the trend of inflation from the year 1991 till date. Find the corelation between gold price, crude oil price & price of dollar. Explain the reasons for variations & the impact of that on Indian Economy.

2. Center of development is shifting from developed states to BIMARU states. Critically examine the statement w.r.t. A) HDI B) State domestic product C) Taxation policy of BIMARU states D) SEZ policy of all states E) Political governance.

Which according to you is /are better state for investment? 3. Prepare a Business plan, considering the following information: A) Capital investment one crore to be raised considering internal rates costs of production in detail. B) Indentify the product C) SWOT analysis D) Strategy for functional department. E) Analysis of break even and payback period. F) Special focus on details of different types of costs to be increased in Short Run & Long run & Strategies for cost minimization.

Marketing Management Assignments:-

1. Select a product of your choice which you have been regularly consuming. No two students should select the same product. Describe the factors that influenced you to purchase & consume it. Were you more influenced by these factors or the promotion activities of the seller or the influence of the members of the reference group? Justify your answer.

2. Continue with the same product as in Ass. No. 1 & conduct a mini market survey in the campus about the acceptance level & effective STP of the same. Confirm your findings with those from any retail outlet or mall.

3. Analyze the Distribution Network used by the manufacturers of the same product & compare it with that used by the competitors. Do you think any other network which according to you would be more effective? Justify.

Statistics & Research Methodology Assignment-1

Download the data of closing daily stock market prices of any company from 1st June to 30th June 2010.

I) Describe this sample of 30 data points. Comment on your impressions about data.

II) The closing market price of any day is considered as a) Going up if it is greater than the mean + 0.5 SD. b) Going down if it is less than mean 0.5 SD.
c) Remaining steady if it is between mean + 0.5 Sd.

Classify the collected sample of the prices according to i) going up, ii) going down or iii) remaining steady. Write the table for the classification. III) Calculate the probability of price i) going up ii) going down and iii) remaining steady. Is this conditional probability or a simple probability? IV) It is observed that the status of closing market price of any day depends on the status of the previous day. If yesterdays status of the price is up then using this sample what is the probability that a) Today the price goes up. b) Today the price goes down. c) Today the price remains steady. If yesterdays status of the price is down then what is the probability that a) Today the price goes up. b) Today the price goes down. c) Today the price remains steady. Comment on the conditional probability you have found. Is there any difference between the conditional probabilities of going up, going down and remaining steady and simple probabilities of those events?
V) After 15 days if you find that the closing market price is between mean + 0.5 SD.

What is the probability that

a) Previous day closing price was also between mean + 0.5 SD.(steady)

b) Previous day the closing price was less than mean 0.5 SD.(down) c) Previous day the closing price was more than mean + 0.5 SD.(up) Explain how you have solved the sub-question V. Explain the theorem which is useful for solving this probability

Assignment 2
MATCH STICK COUNT Hypothesize about the number of match sticks in a match box (one specific brand) and test it for 95% confidence. Take a sample size of 30 or more. Sampling has to be random. Write a three page report (Times new roman, 12 font size) on the same assignment comprising of an Executive summary, Objective, Methodology, Sampling frame and detailed procedure.

Assignment -3
Companies from the same sector perform in a similar way. Prove or disprove this claim by collecting data from different companies from specific sector for appropriate time period. This assignment is to be submitted in the following format. 1. The hypothesis to be tested 2. Sector selected 3. Companies selected 4. Time period for data collection 5. Analysis tables 6. Graphs if any 7. Conclusion Hint: i) Use ANOVA ii) Data can be collected from financial newspapers, magazines, internet, CMIE database etc.