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A study on Analysis of Financial Statements of Bharti Airtel

1.1

Finance:-

Financial management is that managerial activity which is concerned with the planning and control of firms financial resources. As a separate activity or discipline it is of recent origin. It was a branch of economics till 1890 still today it has no unique body of knowledge of its own and draws heavily on economics for its theoretical concepts. The subject of financial management is of immense interest to both academicians and practicing managers. It is of great interest to academicians, because the subject is still developing and are still certain areas where controversies exist for which no enormous solution have been reached as yet. The most crucial decision of the firm are those which relate to finance and an understanding of the theory of financial management provides than with conceptual and analytical insights to make those decisions skillfully.

1.2

Meaning Of Finance:-

Finance is rightly been termed as master key providing accretes to are sources required for running business activities. Finance is the management of monetary affairs of a company.

1.3

Definition of Finance:-

Ray G Jones and Dean Dudely observe that the word finance come indirectly from Latin word Finis. In simple words Finance is economics and Accounting. Economics is proper utilization of scare resources and accounting Economics is proper utilization of scarce resources and Accounting is keeping a record or tract of things. Kenneth Ridgeley and Ronald Bums Accent, Financing is the process of organizing the flow of funds so that a business can carry out its objectives in the most efficient manner of meeting its obligation as they are due

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A study on Analysis of Financial Statements of Bharti Airtel

1.4

Scope Of Finance:-

What is finance? What are firms financial activities? How are they related to firms other activities? There exists an inseparable relation between finance on one hand and on the other. Almost all kinds of business activities directly or indirectly involved the acquisition and use of funds. E.g.: recruitment and promotion of employees, buying of machines, advertising, sales promotion activities requires outlay of cash and therefore affect financial resources. Finance functions or decision includes investment decision,

finance decision, dividend decision, and liquidity decision. A firm performs functions simultaneously and continuously in the normal course of business. They do not necessarily occur in a sequence. Finance functions call for skillful planning control and execution of firms attitudes.

1.5

Functions Of Finance:-

There are three major functions of finance: a) b) c) Investment decision Financing decision Dividend decision. a) Investment decision: Investment decision relates to selection of asset in which funds will be inverted by a firm. The assets that can be acquired by a firm may be long term asset and short term assets. b) Financing decision: Financing decision is concerned with financing mix or capital structure the mix of department and equity is known as capital structure. Determination of the proportion of equity and debt is the main issue in financing to share holders and also financial risk.
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A study on Analysis of Financial Statements of Bharti Airtel

c)

Dividend decision:

A firm may distribute its profits or retain the balance with it the decision depends upon the preference of the shareholders and investment opportunities available to the firm. Dividend decision has a strong influence on the market price of share. Therefore, the dividend policy is too determined in terms of its impact on shareholders value. The optimum dividend policy is one. Which maximize the value of shares and wealth of shareholders the financial manager should determine the optimum payout ratio that is the proportion of net profit to be paid out to shareholders? The financial manager should also consider those factors. This determines the dividend policy in practice.

1.6

Financial Management:-

Financial management is a part of managerial activity, which is mainly concerned with the planning, and controlling of financial resources of a firm. Prof Solomon defines Financial management is concerned with efficient use of an important economic resource is capital funds.

1.7

Importance Of Financial Management:-

Financial management is that managerial activity which is concerned with the planning and control of firms financial resources. As a separate activity or discipline it is of recent origin. It was a branch of economics till 1890 still today it has no unique body of knowledge of its own and draws heavily on economics for its theoretical concepts. The subject of financial management is of immense interest to both academicians and practicing managers. It is of great interest to academicians, because the subject is still developing and are still certain areas where controversies exist for which no enormous solution have been reached as yet. The most crucial decision of the firm are those which relate to finance and an understanding of the theory of financial management provides than with conceptual and analytical insights to make those decisions skillfully.
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A study on Analysis of Financial Statements of Bharti Airtel

1.8

Objectives Of Financial Management:-

The term objective reforms to a goal or decision criterion for taking financial decisions. There are two objectives: a) b) Profit maximization Wealth maximization

a)

PROFIT MAXIMIZATION:

The term profit maximization is deep rooted in the economic theory. It is needed that when pursue the policy of maximizing profits societys resources are efficiently utilized. The firms should undertake those actions that would pursue profits and drop those actions that would decrease profits. The financial decisions should be oriented to the maximization of profits. Profits provides yardstick for measuring the economic performance of firms. It makes allocation of resources to profitable and desirable areas. It also ensures maximum social welfare. On these grounds profit maximization serves as criteria for financial decision. b) WEALTH MAXIMISATION:

Wealth maximization or value maximization or net present Value maximization provides an appropriate and operationally feasible decision criterion for financial management decisions. It provides an unambiguous measure of what financial management should seek to maximize in making investment and financing decisions. It satisfies the three requirements of a

suitable criterion namely precise, time value of money and quality of benefits. In wealth maximization criterion the benefits associated with assets are measured in terms of cash flows rather than accounting profits. The cash flows are a precise concept with definite meaning. It overcomes the deficiencies associated with accounting profits.

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A study on Analysis of Financial Statements of Bharti Airtel

Research Design:Research design of study is a conceptual structure a sketch or plan laid out for conducting the study. It is considered as a blue print of the final copy of the project where it shows the activities undertaken while doing the study. It constitutes the steps taken beginning with of collection of clarifying it. Analyzing, interpreting, processing and finally putting it is an actual form.

2.1
1. 2. 3. 4.

Objectives of the Study:To ascertain the overall profitability of the company. To analyze trends on the basis of ratios for consecutive 4 years. To gain insight as to how a financial statement can be use to predict future. To analyze working capital funds with the help of ratios.

2.2

Scope of Study:-

The scope of the study is limited to Bharti Airtel and is an attempt to find out the financial position during past 4 years from the Annual report of the company with special reference to financial analysis.

2.3 Methodology:No series assumptions so far were made as to limit the usefulness of the study was made at any stage. However the following assumptions were made A study period of four years (2008-2011) Objectives of the study and the research design as agreed upon by the company and the researcher are sufficient, accurate and correct portray true state affairs of Ratio analysis of the company. Published information from the company is accurate and true.

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A study on Analysis of Financial Statements of Bharti Airtel

2.4 Research Design:Research design means a search of facts, answers to question and solution to problems. The data are analyzed through ratio analysis common size balance sheet, comparative balance sheet and fund flow analysis. It is a prospective investigation. Research is a systematic logical study of an issue or problem through scientific method. It is a systematic and objective analysis and recording of controlled observation that may lead to the development of generalization, principles, resulting in prediction and possibly ultimate control of events there are various designs, which are descriptive and helpful for analytical research.

2.5 Data Source:This study makes extensive use of secondary data collected in the forms of annual reports. The nature of secondary data collected was both qualitative and quantitative in nature. Considering the above plan, research plan for the study is essentially a combination of qualitative and quantitative aspects. The secondary sources of data can be divided in to mainly two parts.

Internal

Accounting section Finance section HRD department Miscellaneous records

External

Information for published materials like, Annual reports of the company Balance sheets and profit and loss accounts Magazines

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A study on Analysis of Financial Statements of Bharti Airtel

There was also primary data, which was through discussions held with the concerned company officials from finance department. The primary data was obtained through survey method i.e. personal interview method.

2.6

Techniques of Analysis:-

The data are analyzed through ratio analysis common size balance sheet, comparative balance sheet and fund flow analysis.

2.7 1.

Limitations Of The Study:The study is limited to Bharti Airtel and the finding need not apply in similar sense to other firms.

2. 3.

The inferences that have been framed only on the basis of financial statement. Based on the limited information it is not possible to arrive at a proper conclusion.

4.

Limitations of Financial analysis.

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A study on Analysis of Financial Statements of Bharti Airtel

3.1 HISTORY AND BACKGROUND OF THE COMPANY:Sunil Bharti Mittal founded the Bharti Group. In 1983, Sunil Mittal was into an agreement with Germany's Siemens to manufacture the company's push-button telephone models for the Indian market. In 1986, Sunil Bharti Mittal incorporated Bharti Telecom Limited (BTL) and his company became the first in India to offer push-button telephones, establishing the basis of Bharti Enterprises. This first-mover advantage allowed Sunil Mittal to expand his manufacturing capacity elsewhere in the telecommunications market. By the early 1990s, Sunil Mittal had also launched the country's first fax machines and its first cordless telephones. In 1992, Sunil Mittal won a bid to build a cellular phone network in Delhi. In 1995, Sunil Mittal incorporated the cellular operations as Bharti Tele-Ventures and launched service in Delhi. In 1996, cellular service was extended to Himachal Pradesh. In 1999, Bharti Enterprises acquired control of JT Holdings, and extended cellular operations to Karnataka and Andhra Pradesh. In 2000, Bharti acquired control of Sky cell Communications, in Chennai. In 2001, the company acquired control of Spice Cell in Calcutta. Bharti Enterprises went public in 2002, and the company was listed on Bombay Stock Exchange and National Stock Exchange of India. In 2003, the cellular phone operations were rebranded under the single Airtel brand. In 2004, Bharti acquired control of Hexagon and entered Rajasthan. In 2005, Bharti extended its network to Andaman and Nicobar.2009; Airtel launched its first international mobile network in Sri Lanka. In 2010, Airtel began operating in Bangladesh. Today, Airtel is the largest cellular service provider in India and fifth largest in the world.

3.2 Type of Organizational Structure:The organizational structure that existed till recently concentrated on the hierarchy of the operations (not services) inside the company as a whole. The structure depicts the corresponding operation/region of different in-charges and hence it didn't hold anyone responsible for each of its services. So, the company found it better to restructure its organizational chart and it came into implementation from 1 August. The transformed organizational structure will have two distinct Customer Business Units (CBU) with clear
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A study on Analysis of Financial Statements of Bharti Airtel

focus on B2C (Business to Customer) and B2B (Business to Business) segments. Bharti Airtel's B2C business unit will comprehensively service the retail consumers, homes and small offices, by combining the erstwhile business units Mobile, Telemedia, Digital TV, and other emerging businesses (like M-commerce, M-health, M-advertising etc.). The B2C organization will consist of Consumer Business and Market Operations.

3.3 BOARD OF DIRECTORS:Sunil Bharti Mittal Ajay Lal Chua Sock Koong Lord Evan Mervyn Davies N Kumar Pulak Prasad Rakesh Bharti Mittal Tan Yong Choo Manoj Kohli Akhil Gupta Craig Ehrlich Hui Weng Cheong Nikesh Arora Rajan Bharti Mittal Chairman and Managing Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director Joint Managing Director and CEO Non Executive Director Non Executive Director Non Executive Director Non Executive Director Non Executive Director

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A study on Analysis of Financial Statements of Bharti Airtel

Salim Ahmed Salim Tsun-Yan Hsieh

Non Executive Director Non Executive Director

3.4 AWARDS AND ACHIVEMENTS:Airtel has won the Most Preferred Cellular Service Provider Brand award at the CNBC Awaaz Consumer Awards in Mumbai. This is 6th year in a row that Airtel has won the award in this category. This year, the awards were based on an exhaustive consumer survey done by The Nielsen Company. Over 3,000 consumers, spanning 19 cities and 16 states in India, rated brands across different categories to choose brands which delivered true value for money. Bharti Airtel has received the prestigious Business world-FICCI-SEDF Corporate Social Responsibility Award 2009-2010. The FICCI Socio Economic Development Foundation (FICCI-SEDF) and Business world CSR award was instituted in 1999 to recognize exemplary responsible business practices by the Indian industry.

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A study on Analysis of Financial Statements of Bharti Airtel

Financial Analysis:
Financial analysis is the analysis of financial statement of a Company to assess its financial health and soundness of its management. Financial Statement Analysis involves a study of the financial statements of a company to ascertain its prevailing state of affairs and the reasons thereof. Such a study would enable the public and the investors to ascertain whether one company is more profitable than the other and also to state the causes and factors that are probably responsible.

Ratio Analysis:Ratio analysis is a powerful tool of financial analysis. A ratio is defined as the indicated quotient of two mathematical expressions as relationship between two or more things. In financial analysis, a ratio is used as a bench mark for evaluating the financial position and performance of a firm. The absolute accounting figures

reported in the financial statement do not provide a meaningful understanding of the performance and financial position of a firm. An accounting figure conveys For

meaningful message when it is related to some other relevant information.

example Rs 5 corer net profit may look impressive but the firms performance can be said to be good or bad only when the net profit figure is related to firms investments. The relationship between two accounting figures expressed mathematically is known as financial ratio. A ratio quantitative relationship, which can be in turn used to make a qualitative judgment.

Classification of Ratios:Ratios may be classified in a number of ways keeping in view the particular purpose. Ratios indicating profitability are calculated on the basis of the profit and loss account; those indicating financial position are computed on the basis of balance sheet. This classification is rather crude and unsuitable to determine the profitability
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A study on Analysis of Financial Statements of Bharti Airtel

and financial position of business. To achieve these purpose ratios may be classified as 1. 2. 3. 4. 5. 6. Liquidity Ratios Return On Investments Ratios Solvency Ratios Efficiency or Turnover Ratios Profitability Ratios Capital Market Ratios

Liquidity Ratios:i. ii. iii. iv. v. vi. vii. Current Ratio Quick or Acid Test Ratio Debtors Ratio Debtors Turnover Ratio Creditors Ratio Creditors Turnover Ratio Inventory Holding Period

viii. Inventory Turnover Ratio

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A study on Analysis of Financial Statements of Bharti Airtel

4.1

Current Ratio (Working Capital Ratio)


=
Table: 4.1 Current Ratio (2008 to 2012)

Current Assets Current Liabilities


(Rs in CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

CURRENT ASSETS 8439.39 10466.63 10021.39 13730.10 23957.90

CURRENT LIABILITIES 14362.33 14466.89 13638.30 16732.40 17842.70

RATIO 0.59 0.73 0.73 0.82 1.34

Analysis: The current ratio of the company for the year 2007-08 is 0.59, 2008-09 is 0.73,
2009-10 is 0.73, 2010-11 is 0.82 and 2011-12 is 1.34, the current ratio has increased by 23.73% in the year 2008-09, and in 2009-10 it remains constant. There was increase positive value is found by 12.33% in year 2010-11 and increased by 63.41% in the year 2011-12.

Interpretation: From the above table we can indicate that the current assets are very less
compared to current liability of the company. The company doesnt have enough current assets in meeting their liabilities. So, the company cant meet immediate emergencies. The company needs to increase current assets in order to meet its short-term obligation. We can conclude that the ratio isnt favorable as the current asset is less than the current liabilities.

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A study on Analysis of Financial Statements of Bharti Airtel

4.2 Quick (Acid Test or Liquid) Ratio:


= Quick Assets Current Liabilities Table: 4.2 Quick Ratio (2008 to 2012) (Rs in CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

QUICK ASSETS 8382.53 10404.48 9994.15 13695.70 22866.90

CURRENT LIABILITIES 14362.33 14466.89 13638.30 16732.40 17842.70

RATIO 0.58 0.72 0.73 0.82 1.28

Analysis: The quick ratio of the company for the year 2007-08 is 0.58, 2008-09 is 0.72,
2009-10 is 0.72, 2010-11 is 0.82, and 2011-12 is 1.28. The quick ratio has increased by 24.14 % in the year 2008-09 and the year 2009-10 is increased by 1.39% there is increased positive value is found by 12.33% for the year 2010-11 and increased by 56.10% in the year 2011-12.

Interpretation: As per as quick ratio is concern whether a firm has enough short-term
assets to cover its immediate liabilities without selling inventory. Here, Bharti Airtel review that in 2008-09 increase their assets and then after very small percentage increase. That point of Time it has not enough asset to cover its liabilities. Company ideal ratio is 1.5 so is below the ratio. This is not good for company should be improving that point.

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A study on Analysis of Financial Statements of Bharti Airtel

4.3

Debtors Turnover Ratio


= Credit Sales Avg. Debtors
Table: 4.3 Debtors Turnover Ratio (2008 to 2012)
(Rs in CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

CREDIT SALES 25761.11 34048.32 35609.54 38015.80 41,603.80

AVG. DEBTORS 2097.49 1515.76 2327.52 2240.39 2134.50

RATIO 12.28 22.46 15.30 16.97 18.45

DAYs 30 16 24 23 18

Analysis: The debtors turnover ratio of the company for the year 2007-08 is 12.28 times,
2008-09 is 22.46 times, 2009-10 is 15.30 times, 2010-11 is 16.97 times, and 2011-12 is 18.45 times the debtors turnover ratio has increased by 82.90% in the year 2008-09, and in 2009-10 it decreased by 31.88%. There was increase positive value is found by 10.92% in year 2010-11 and increased by 8.72% in the year 2011-12.

Interpretation: Higher turnover signifies speedy and effective collection. Lower turnover
indicates sluggish and inefficient collection leading to the doubts that receivables might contain significant doubtful debts. Receivables collection period is expressed in number of days. Here the company in 1st year 1month to collection & after decline then after increase. Company does not maintain lower collection period.

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A study on Analysis of Financial Statements of Bharti Airtel

Return On Investments Ratios:i. ii. iii. iv.


Return On Net Worth Earnings Per Share (EPS) Cash Earnings Per Share (CEPS) Return On Capital Employed

4.4 Return on Net Worth


PAT Preference Dividend Net Worth
Table: 4.4 Return On Net Worth (2008 to 2012)

x 100
(RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PAT PREFERENCE DIVIDEND 6244.19 7743.84 9426.15 7716.90 5266.00

NET WORTH 20241.49 27643.97 36737.18 44111.60 49429.60

RATIO 30.85 28.01 25.66 17.49 10.65

Analysis: The return on net worth of the company for the year 2007-08 is 30.85, 2008-09 is
28.01, and 2009-10 is 25.66, 2010-11 is 17.49, and 2011-12 is 10.65. The return on net worth has decreased by 9.21% in the year 2008-09, and decreased by 8.39% in the year 2009-10 and again decreased by 31.84% in the year 2010-11 and again decreased by 39.11% in the year.

Interpretation: As per as net worth ratio states the return that shareholders could receive
on their investment in a company. Here the company continuous declines year by year this not well for company. But actually is right because bank rate is low like 12 % is good for investors.

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A study on Analysis of Financial Statements of Bharti Airtel

4.5 .09
PAT No. Equity Shares
Table: 4.5 Earnings Per Share (2008 to 2011) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PAT 6244.19 7743.84 9426.15 7716.90 5266.00

NO. OF EQUITY SHARES 189.79 189.82 379.75 379.75 379.75

RATIO 32.90 40.79 24.82 20.32 13.87

Analysis: The earnings per share of the company for the year 2007-08 is 32.90, 2008-09 is
40.79, and 2009-10 is 24.82, 2010-11 is 20.32, and 2011-12 is 13.87. The earnings per share has increased by 23.98% in the year 2008-09, and decreased by 39.15% in the year 2009-10 and again decreased by 18.13% in the year 2010-11 and again decreased by 31.74% in the year 2011-12.

Interpretation: As per as EPS ratio is concern the portion of a company's profit allocated
to each outstanding share of common stock. Earnings per share serve as an indicator of a companys profitability. Here the company shows high profitability so it is good for

company as well as investor.

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A study on Analysis of Financial Statements of Bharti Airtel

4.6 Return on Capital Employed


PBIT Capital Employed
Table: 4.6 Earnings Per Share (2008 to 2011) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PBIT 9450.20 11194.72 8747.65 7599.87 7514.80

CAPITAL EMPLOYED 56009.10 41776.10 35357.53 26811.63 11565.07

RATIO 16.87 26.80 24.74 28.35 0.64

Analysis: The return on capital employed of the company for the year 2007-08 is 16.87,
2008-09 is 26.80, and 2009-10 is 24.74, 2010-11 is 28.35 and 2011-12 is 0.64. The return on capital employed has increased by 58.87% in the year 2008-09, and decreased by 7.69% in the year 2009-10 and increased by 14.59% in the year 2010-11 and again decreased by 97.74% in the year.

Interpretation: It is expressed as a percentage and can be very revealing about the


industry a company operates in, the skills of the management and occasionally the general business climate. Here, the company continuous increases efficiency. It is good for the company.

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A study on Analysis of Financial Statements of Bharti Airtel

Solvency Ratios:i. ii. iii. iv. v. vi. vii.


Net Asset Value (NAV) Debt Equity Ratio Int. Coverage Ratio Debt Service Coverage Ratio Proprietary Ratio Total Assets to Debt Ratio Liabilities to Equity Ratio

4.7 Net Asset Value


Net Worth No. Equity Share
Table: 4.7 Net Asset Value (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

NET WORTH 20241.49 27643.97 36737.18 44111.60 49429.60

NO. OF EQUITY SHARES 189.79 189.82 379.75 379.75 379.75

RATIO 106.65 145.63 96.74 116.16 130.16

Analysis: The return on net asset value of the company for the year 2007-08 is 106.65,
2008-09 is 145.63, and 2009-10 is 96.74, 2010-11 is 116.16, and 2011-12 is 130.16. The net asset value has increased by 36.55% in the year 2008-09, and decreased by 33.57% in the year 2009-10 and again increased by 20.01% in the year 2010-11, and again increased by 12.05% in the year 2011-12.

Interpretation: The net asset value in companies is the book value deducting liabilities
and intangible assets from the total assets. For companies, the net asset value is always used

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A study on Analysis of Financial Statements of Bharti Airtel

in market book ratio or price book ratio to compare the net asset value of the company with its market value. Here condition of company is good due to high profitability.

4.8 Debt Equity Ratio


Long Term Debt Share Holder Fund
Table: 4.8 Debt Equity Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

LONG TERM DEBT 6570.43 7713.65 5038.92 11897.50 14129.40

SHARE HOLDER FUND 20241.49 27643.97 36737.18 44111.60 49429.60

RATIO 0.32 0.29 0.14 0.27 0.28

Analysis: The debt equity ratio of the company for the year 2007-08 is 0.32, 2008-09 is
0.29, and 2009-10 is 0.14, 2010-11 is 0.27, and 2011-12 is 0.28. The debt equity ratio has decreased by 9.38% in the year 2008-09, and decreased by 51.72% in the year 2009-10, increased by 92.29% in the year 2010-11 and again increased by 3.70% in the year 2011-12.

Interpretation: A measure of a company's financial leverage calculated by dividing its


total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets. Here the company ratio so good in the current situation as to the previous years. This is good for the company.

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A study on Analysis of Financial Statements of Bharti Airtel

4.9 Proprietary Ratio


Proprietary Fund Total Asset
Table: 4.9 Proprietary Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PROPRIETARY FUND 20241.49 27643.97 36737.18 44111.60 49429.60

TOTAL ASSET 26811.84 35357.62 41776.12 56009.10 63559.00

RATIO 0.75 0.78 0.88 0.79 0.78

Analysis: The proprietary ratio of the company for the year 2007-08 is 0.75, 2008-09 is
0.78, and 2009-10 is 0.88, 2010-11 is 0.79, and 2011-12 is 0.78. The proprietary ratio has increased by 4.00% in the year 2008-09, and increased by 11.54% in the year 2009-10 and decreased by 10.23% in the year 2010-11 and again decreased by 1.27% in the year 2011-12.

Interpretation: Proprietary Ratio refers to a ratio which helps the creditors of the
company in seeing that their capital or loans which the creditors have given to the company are safe. Ideal ratio is <1 so Here company has all year is <1 so it is good for company.

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A study on Analysis of Financial Statements of Bharti Airtel

4.10 Total Asset to Debt Ratio


Total Asset Long Term Debt
Table: 4.10 Total Asset to Debt Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

TOTAL ASSET 26811.84 35357.62 41776.12 56009.10 63559.00

LONG TERM DEBT 6570.43 7713.65 5038.92 11897.50 14129.40

RATIO 4.08 4.58 8.29 4.71 4.50

Analysis: The total assets to debt ratio of the company for the year 2007-08 is 4.08, 200809 is 4.58, and 2009-10 is 8.29, 2010-11 is 8.71, and 2011-12 is 4.50. The total asset ratio has increased by 12.25% in the year 2008-09, and increased by 81.00% in the year 2009-10 and decreased by 43.18% in the year 2010-11 and again decreased by 4.46% in the year 2011-12.

Interpretation: As per as the total asset to debt ratio to debt ratio is concern ratio
between asset & long term debt. In the ratio total asset more than long term debt. So here company total asset is high in 2009-10 but company cant maintain that so improve that point is actually it is good.

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A study on Analysis of Financial Statements of Bharti Airtel

4.11 Liabilities to Equity Ratio


Total Liabilities Share Holders Equity
Table: 4.11 Liabilities to Equity Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

TOTAL LIABILITIES 26811.84 35357.62 41776.12 56009.10 63559.00

SHARE HOLDERS EQUITY 20241.49 27643.97 36737.18 44111.60 49429.60

RATIO 1.32 1.28 1.14 1.27 1.28

Analysis: The liabilities to equity ratio of the company for the year 2007-08 is 4.08, 200809 is 4.58, and 2009-10 is 8.29, 2010-11 is 8.71, and 2011-12 is 1.28. The liabilities to equity ratio has decreased by 3.03% in the year 2008-09, and decreased by 10.94% in the year 2009-10 and increased by 11.40% in the year 2010-11 and again increased by 0.79% in the year 2011-12.

Interpretation: The liability to equity ratio is the relationship between the capital
contributed by creditors and the capital contributed by shareholders. It also shows the extent to which shareholders' equity can fulfill a company's obligations to creditors in the event of liquidation. Here the company increases their equity year by year. Ideal ratio is 1 here company is work on more than 1 so it is good for the company.

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A study on Analysis of Financial Statements of Bharti Airtel

Efficiency Ratios or Turnover Ratios:i. ii. iii.


Fixed Assets Turnover Ratio Net Worth Turnover Ratio Working Capital Turnover Ratio

4.12 Fixed Assets Turnover Ratio


Net Sales Net Block of Fixed Asset
Table: 4.12 Fixed Assets Turnover Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

NET BLOCK OF FIXED ASSET 19030.65 25013.36 28024.97 40700.80 43984.30

RATIO 1.35 1.36 1.27 0.93 0.94

Analysis: The fixed asset turnover ratio of the company for the year 2007-08 is 1.35, 200809 is 1.36, and 2009-10 is 1.27, 2010-11 is 0.93, and 2011-12 is 0.94. The fixed asset turnover ratio has increased by 0.70% in the year 2008-09, and decreased by 6.62% in the year 2009-10 and again decreased by 26.77% in the year 2010-11 and increased by 1.07% in the year 2011-12.

Interpretation: Ratio measures a company's ability to generate net sales from fixed-asset
investments - specifically property, plant and equipment (PP&E) - net of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed assets to generate revenues. Here the companys decline the use of the asset continues decline. This is not good for the company.

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A study on Analysis of Financial Statements of Bharti Airtel

4.13 Net Worth Turnover Ratio


Net Sales Net Worth
Table: 4.13 Net Worth Turnover Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

NET WORTH 20241.49 27643.97 36737.18 44111.60 49429.60

RATIO 1.27 1.23 0.97 0.86 0.84

Analysis: The net worth turnover ratio of the company for the year 2007-08 is 4.08, 200809 is 4.58, and 2009-10 is 8.29, 2010-11 is 8.71, and 2011-12 is 0.84. The net worth turnover ratio has decreased by 3.15% in the year 2008-09, and decreased by 21.14% in the year 2009-10 and decreased by 11.34% in the year 2010-11 and again decreased by 2.32% in the year 2011-12.

Interpretation: As per as Net worth Turnover Ratio is concern it show the


relationship between the net worth & net sales. Ideal ratio is 1.5 but company is not performance better in this case ratio is continues decline. It is not good for the company.

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A study on Analysis of Financial Statements of Bharti Airtel

4.14 Working Capital Turnover Ratio


Net Sales Working Capital
Table: 4.14 Working capital Turnover Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

WORKING CAPITAL (-)5922.94 (-)4000.26 (-)3616.91 (-)3002.30 6115.20

RATIO (-)4.35 (-)8.51 (-)9.85 (-)12.66 6.80

Analysis: The working capital turnover ratio of the company for the year 2007-08 is -4.35,
2008-09 is -8.51, and 2009-10 is -9.85, 2010-11 is -12.66, and 2011-12 is 6.80. The working capital turnover ratio has decreased by 95.63% in the year 2008-09, and decreased by 15.75% in the year 2009-10 and again decreased by 28.53% in the year 2010-11 and increased by 153.71% in the year 2011-12.

Interpretation: The working capital turnover ratio concern to increasing ratio indicates
that working capital is more active; it is supporting, comparatively, higher level of production and sales; it is being used more intensively. Here company is not performing well due to negative working capital. This is not good for company.

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A study on Analysis of Financial Statements of Bharti Airtel

Profitability Ratios:i. ii. iii. iv. v. vi. vii.


Gross Profit Ratio Profit Before Depreciation, Interest & Tax Ratio (PBDIT) Profit Before Interest & Tax Ratio (PBIT) or Operating Profit Ratio Profit Before Tax Ratio (PBT) Net Profit or Profit After Tax Ratio (PAT) Defective Tax Rate Operating Ratio

4.14 PBDIT Ratio


PBDIT Net Sales
Table: 4.14 PBDIT Ratio (2008 to 2012)

x 100
(RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PBDIT 10766.45 11953.93 15084.80 13643.90 13430.80

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

RATIO 41.79% 35.11% 42.36% 35.89% 32.28%

Analysis: The PBDIT ratio of the company for the year 2007-08 is 41.79%, 2008-09 is
35.11%, and 2009-10 is 42.36%, 2010-11 is 35.89%, and 2011-12 is 32.28%. The PBDIT ratio has decreased by 15.98% in the year 2008-09, and increased by 20.65% in the year 2009-10 and decreased by 15.27% in the year 2010-11 and again decreased by 10.05% in the year 2011-12.

Interpretation: Financial metric used to assess a company's profitability by comparing its


revenue with earnings. More specifically, since PBDIT is derived from revenue, this metric would indicate the percentage of a company is remaining after operating expenses. Here high ratio indicate good position in market this is good for company.
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A study on Analysis of Financial Statements of Bharti Airtel

4.15 PBIT or Operating Profit Ratio


PBIT Net Sales
Table: 4.15 PBIT Ratio (2008 to 2012)

x 100
(RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PBIT 7333.80 8568.83 10986.88 9032.30 7514.80

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

RATIO 28.47% 25.17% 30.85% 23.76% 18.06%

Analysis: The PBIT ratio of the company for the year 2007-08 is 28.47%, 2008-09 is
25.17%, and 2009-10 is 30.85%, 2010-11 is 23.76%, and 2011-12 is 18.06%. The PBIT ratio has decreased by 11.59% in the year 2008-09, and increased by 22.57 in the year 200910, decreased by 22.98% in the year 2010-11 and decreased by 23.98% in the year 2011-12.

Interpretation: As per as ratio is concern a higher operating margin means that the
company has less financial risk. Here company has average high ratio so the company is a good position.

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A study on Analysis of Financial Statements of Bharti Airtel

4.16 PBT Ratio


PBT Net Sales
Table: 4.16 PBT Ratio (2008 to 2012)

x 100
(RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

PBT 6879.70 8088.52 10652.75 8747.40 6989.70

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

RATIO 26.71% 23.75% 29.92% 23.00% 16.80%

Analysis: The PBIT ratio of the company for the year 2007-08 is 26.71%, 2008-09 is
23.75%, and 2009-10 is 29.92%, 2010-11 is 23.00% and 2011-12 is 16.80%. The PBT ratio has decreased by 11.08% in the year 2008-09, and increased by 25.99% in the year 2009-10 and again decreased by 23.12% in the year 2010-11 and decreased by 26.97% in the year 2011-12.

Interpretation: As per as ratio is concern a higher interest margin means that the
company has less financial risk. Here company has average high ratio so the company is a good position.

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A study on Analysis of Financial Statements of Bharti Airtel

4.17 Net Profit Ratio


Net Profit Net Sales
Table: 4.17 Net Profit Ratio (2008 to 2012)

x 100
(RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

NET PROFIT 6244.19 7743.84 9426.15 7716.90 5266.00

NET SALES 25761.11 34048.32 35609.54 38015.80 41603.80

RATIO 24.24% 22.74% 26.47% 20.30% 12.66%

Analysis: The net profit ratio of the company for the year 2007-08 is 24.24%, 2008-09 is
22.74%, and 2009-10 is 26.47%, 2010-11 is 20.30% and 2011-12 is 12.66. The net profit ratio has decreased by 6.19% in the year 2008-09, and decreased by 16.40% in the year 2009-10 and again decreased by 23.31% in the year 2010-11 and decreased by 37.63% in the year 2011-12.

Interpretation: This ratio is a measure of the overall profitability net profit is arrived at
after taking into accounts both the operating and non-operating items of incomes and expenses. The ratio indicates what portion of the net sales is left for the owners after all expenses have been met. Here the company high profit in year 2009-10 then decline. This is not good for company. Company should be maintaining the NP ratio.

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A study on Analysis of Financial Statements of Bharti Airtel

Capital Market Ratios:i. ii. iii. iv. v.


Price Earnings Ratio (PE Ratio) Market Price to NAV Ratio Market Capitalization Ratio Yield to Investor Price to Book Ratio

4.18 Price Earnings Ratio


Market Price of a Share Earnings per Share
Table: 4.18 Price Earnings Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

MARKET PRICE OF A SHARE 420.00 508.30 174.60 270.70 273.30

EARNINGS PER SHARE 32.90 40.79 24.82 20.32 15.09

RATIO 12.77 12.46 7.03 13.32 18.11

Analysis: The net profit ratio of the company for the year 2007-08 is 12.77, 2008-09 is
12.46, and 2009-10 is 7.03, 2010-11 is 13.32 and 2011-12 is 18.11. The net profit ratio has decreased by 2.43% in the year 2008-09, and decreased by 43.57% in the year 2009-10 and increased by 89.47% in the year 2010-11 and again increased by 35.96%.

Interpretation: The P/E looks at the relationship between the stock price and the
companys earnings. Here the company has a high P/E ratio in last year it suggests that stock is undervalued and investor can earn from it.

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A study on Analysis of Financial Statements of Bharti Airtel

4.19 Market Price to NAV Ratio


Market Price of a Share NAV
Table: 4.19 Market Price to NAV Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

MARKET PRICE OF A SHARE 420.00 508.30 174.60 270.70 273.30

NAV 106.65 145.63 96.74 116.16 130.16

RATIO 3.94 3.49 1.80 2.33 2.10

Analysis: The market price to NAV ratio of the company for the year 2007-08 is 3.94,
2008-09 is 3.49, and 2009-10 is 1.80, 2010-11 is 2.33 and 2011-12 is 2.10. The market price to NVA ratio has decreased by 11.42% in the year 2008-09, and decreased by 48.42% in the year 2009-10 and increased by 29.44% in the year 2010-11 and decreased by 9.87% in the year.

Interpretation: As per as this ratio is concern the investment potential of a share. It also
offers opportunity to the company to buy back its own shares from the market. Hear the company has higher ratio represent the ability to buy own shares in the market. Ideal ratio is 2 so all year is above the 2.

32 | P a g e S. R. Luthra Institute Of Management

A study on Analysis of Financial Statements of Bharti Airtel

4.20 Market Capitalization Ratio


Market Price of a Share x Total No. of Shares
Table: 4.20 Market Capitalization Ratio (2008 to 2012) (RS IN CRS.)

YEAR 2007-08 2008-09 2009-10 2010-11 2011-12

MARKET PRICE OF A SHARE 420.00 508.30 174.60 270.70 273.30

TOTAL NO. OF SHARES 189.97 189.82 379.75

RATIO 79787.40 96485.15 66304.35

379.75 102798.33 379.75 103785.67

Analysis: The market capitalization ratio of the company for the year 2007-08 is 79787.40,
2008-09 is 96485.15, and 2009-10 is 66304.35, 2010-11 is 102798.33 and 2011-12 is 103785.67. The market capitalization ratio has increased by 20.93% in the year 2008-09, and decreased by 31.28% in the year 2009-10 and increased by 55.04% in the year 2010-11 and increased by 0.96% in the year 2011-12.

Interpretation: The ratio provides a base for total valuation of a company based on the
market price of its equity. It immensely helpful in negotiating mergers, takeover, acquisition ect. Hear the company perfume well in market but decline way so company should be improve & take expansion strategy.

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A study on Analysis of Financial Statements of Bharti Airtel

Multi Step Profit & Loss Account

(RS IN CRS.)

Particulars
Gross Sales Less: Excise duty Net Sales -Administrative, Selling and Other Expenses + other income (operating) Profit Before Depreciation Interest and Tax - PBDIT

C.Y.

P.Y.

(2011-12) (2010-11) 41603.80 38015.80 41603.80 27843.50 329.50 13430.80 38015.80 24590.10 218.20 13643.90

Profit Before Depreciation Interest and Tax - PBDIT -Depreciation -Amortisation -Impairment Operating Profit PBIT

13430.80 5916.00 7514.80

13643.90 4193.70 417.90 9032.30

Operating Profit PBIT -Interest & Finance Charges +Other Income (Non-Operating) Profit Before Tax & Extra Ordinary Items - PBTEOT

7514.80 1199.30 6315.50

9032.30 296.70 8735.60

Profit Before Tax & Extra Ordinary Items - PBTEOT +/ - extra ordinary items Profit Before Tax for the year PBT-Y +/ - Prior year adjustments Profit Before Tax

6315.50 17.50 6333.00 6333.00

8735.60 11.8 8747.40 8747.40

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A study on Analysis of Financial Statements of Bharti Airtel

Profit Before Tax Provision for tax: Current income tax +/ - deferred income tax liability + fringe benefit tax +/ - tax adjustments for previous year Total Income Tax Profit After Tax NP/PAT

6333.00 1226.20 1067.00 5266.00

8747.40 1007.60 1030.50 7716.90

Analysis and Interpretation:


It equally, and probably, more to study analysis the profitability of the company at different step or at intermediate levels, of business activities, in relation to net sales. It may be observed that in case of Bharti Airtel profit has decline at every intermediate stage. However, since absolute figures are not amenable to further analysis.

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A study on Analysis of Financial Statements of Bharti Airtel

Horizontal Analysis:Horizontal Profit & Loss Acc of Bharti Airtel for the year 2010-11 & 2011-12:
(RS IN CRS.)

Particular Sales (-) Administrative, Selling and Other Expenses


PBDIT (-) Depreciation & Amortization PBIT (-) Interest Expenses PBT (-) Income Tax PAT

2011-12 (C. Y.) 41603.80

2010-11 (P. Y.) 38015.80

Increase/ Decrease 3588.00

Increase/ Decrease (%) 9.44

27843.50 13760.30 5916.00 7844.30 545.90 7298.40 1067.00 6231.40

24590.10 13425.70 4611.60 8814.10 308.50 8505.60 1030.50 7475.10

3253.40 334.60 1304.40 (-)969.80 237.40 (-)1207.20 (-)196.10 (-)1243.70

13.23 2.50 28.28 (-)11.00 76.95 (-)14.19 (-)15.99 (-)16.64

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A study on Analysis of Financial Statements of Bharti Airtel

Horizontal Balance Sheet of Bharti Airtel for the year 2010-11 & 2011-12:
(RS IN CRS.)

Particular Sources of Funds:Owned Funds: Share Capital Reserves & Surplus

2011-12 (C. Y.)

2010-11 (P. Y.)

Increase/ Decrease

Increase/ Decrease (%)

1898.80 47530.80 49429.60

1898.80 42212.80 44111.60

0.00 5318.00 5318.00

0.00 21.17 12.05

Loan Funds: Secured Loans Unsecured Loans 2.90 14126.40 14129.30 Total Application of Funds:1.)Fixed Assets Gross Block Less: depreciation Net Block Capital work in progress 2.)Investments 3.)Current Assets, Loans & Advances Inventories Sundry Debtors Cash & Bank Balance Fixed Deposit Loans & Advances 32.10 2134.50 159.20 322.60 23957.90 34.40 2375.80 126.60 7.20 11186.10 (-)2.3 (-)270.82 32.60 315.4 12771.80 26.28 (-)6.69 25.75 43.80 114.17
37 | P a g e S. R. Luthra Institute Of Management

17.10 11880.40 11897.50 56009.10

(-)14.20 2246.00 2231.80 7549.80

(-)83.04 18.90 18.76 13.48

63558.90

70450.30 (-)26466.0 43984.30 1072.50 12337.80

61437.50 (-)20736.7 40700.80 6497.60 11813.00

9012.80 5729.30 3283.50 (-)5425.10 524.80

14.67 27.62 8.07 (-)83.45 4.44

A study on Analysis of Financial Statements of Bharti Airtel

Less: Current Liabilities Provisions Net Current Assets: 4.) Miscellaneous Exp. Profit & Loss Account Total

(-)17145.2 (-)697.50 6115.20 63559.00

(-)16104.8 (-)627.60 (-)3002.30 56009.10

1040.4 69.90 614.61

6.46 11.13 (-)303.68

7549.90

13.48

Analysis and Interpretation of Bharti Airtel:Profit & loss account


1. Net sales growth by 9.44% 2. Increase in expenses like Administrative, Selling and Other Expenses by 13.23% this is very high to camper to sales growth so it is not good for the company. 3. Depreciation & Amortization even increase by 28.28% that shows that company noncash charges increase not well for the company. 4. Interest Expenses is decline by 76.95% this is good for the company.

5. Decline in income tax by 15.99% due to low profit margin. This is not good for company. 6. Decline in PAT by 16.64% is not good for company.

Balance Sheet
1. Total asset / liabilities up by 13.48% 2. Net worth up by 12.05% 3. Lone fund also decreased by 13.48% this shoe the company good will in the market to give lone.

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A study on Analysis of Financial Statements of Bharti Airtel

Vertical Analysis:Vertical Profit & Loss Acc of Bharti Airtel for the year 2010-11 & 2011-12:
(RS IN CRS.)

Particulars

Sche dule

Current Year (2011-12) Inner Outer Column Column 41603.80 329.50 41933.30

Previous Year (2010-11) Inner Outer Column Column 38015.80 218.20 38234.00 24585.50 296.70 4193.70 417.90 (-)7.20

Income Sales Less: return Other Income Expenditure Administrative, Selling and Other Expenses Interest & Finance Charges Depreciation Impairment loss on fixed assets Adjustment due to (increase) / Decrease in stock of finished goods & W.I.P Provision for contingencies Profit Before Taxation Provision for Income Tax Profit After Taxation

27843.50 1199.30 5916.00 (-)2.30

34961.10 6989.70 1067.00 5730.00

29510.20 8747.40 1030.50 7716.90

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A study on Analysis of Financial Statements of Bharti Airtel

Vertical Balance Sheet of Bharti Airtel for the year 2010-11 & 2011-12:
(RS IN CRS.)

Particulars I Sources of funds 1.) Shareholders Funds: a.) Capital b.) Reserves & Surplus 2.) Loan Funds a.) Secured Loans b.) Unsecured Loans Total II Application of Funds 1.) Fixed Assets a.) Gross Block b.) less: depreciation c.) Net Block d.) Capital work-in progress 2.) Investments 3.) Current Assets, Loans & Advances: a.) Inventories b.) Sundry Debtors c.) Cash And Bank Balances d.) Fixed Deposit e.) Loans And Advances Less: Current Liabilities and Provisions a.) Liabilities b.) Provisions Net Current Assets: 4.) a.) Miscellaneous Expenditure b.) Profit and Loss Account Total

Schedule No.

Current Year (2011-12)

Previous Year (2010-11)

1898.80 47530.80 2.90 14126.50 63559.00

1898.80 42212.80 17.10 11880.40 56009.10

70450.30 (-)26466.00 43984.30 1072.50 12337.80 32.10 2134.50 159.20 322.60 23957.90

61437.50 (-)20736.70 40700.80 6497.60 11813.00 34.40 2375.80 126.60 7.20 11186.10

17145.20 697.50 6115.20 63559.00

16104.80 627.60 (-)3002.30 56009.10

40 | P a g e S. R. Luthra Institute Of Management

A study on Analysis of Financial Statements of Bharti Airtel

Analysis and Interpretation:


1. Income is increase as camper to previous year due to sales increase. 2. Expenditure more than the previous year this bed for company thats way decline in profits margin. 3. Share holders fund is increase as camper to previous year this good for the company. 4. In application of fund is not proper managed by the company because net working capital is in negative but we show the some improvement in this. So, this not good for the company. 5. As all aspect of the vertical analysis part over all company tries to increase his performance by increases of his efficiency.

41 | P a g e S. R. Luthra Institute Of Management

A study on Analysis of Financial Statements of Bharti Airtel

Vertical Analysis:Common size Profit & Loss Acc of Bharti Airtel for the year 2010-11 & 2011-12:
(RS IN CRS.)

Particulars

Sales (-)Selling, Administrating & Other Expenses PDBIT (-)Depreciation & Amortization PBIT (-)Interest PBT (-)Income Tax PAT

Current Year Previous Year (2011-12) (2010-11) Amount % Amount % 41603.80 100 38015.80 100 27843.50 66.92 24371.90 64.11 13760.30 5916.00 7844.30 545.90 7298.40 1067.00 6231.40 33.07 13643.90 14.22 4599.80 18.85 9044.10 1.31 296.70 17.54 2.56 14.98 8747.40 1030.50 7716.90 35.89 12.10 23.71 0.78 23.01 2.71 20.30

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A study on Analysis of Financial Statements of Bharti Airtel

Common size Profit & Loss Acc of Bharti Airtel for the year 2010-11 & 2011-12:
(RS IN CRS.)

Particulars Sources of funds 1.) Shareholders Funds: a.) Capital b.) Reserves & Surplus 2.) Loan Funds a.) Secured Loans b.) Unsecured Loans Total Application of Funds 1.) Fixed Assets a.) Gross Block b.) less: depreciation c.) Net Block d.) Capital work-in progress 2.) Investments 3.) Current Assets, Loans & Advances: a.) Inventories b.) Sundry Debtors c.) Cash And Bank Balances d.) Fixed Deposit e.) Loans And Advances Less: Current Liabilities and Provisions a.) Liabilities b.) Provisions Net Current Assets: 4.) a.) Miscellaneous Expenditure b.) Profit and Loss Account Total

Current Year (2011-12)

Previous Year (2010-11)

1898.80 47530.80 2.90 14126.50 63559.00

2.99 74.78 0.00 22.22 100

1898.80 42212.80 17.10 11880.40 56009.10

3.39 75.37 0.03 21.21 100

70450.30 (-)26466.00 43984.30 1072.50 12337.80 32.10 2134.50 159.20 322.60 23957.90

110.84 61437.50 (-)41.64 (-)20736.70 69.21 40700.80 1.69 6497.60 19.41 11813.00 0.05 3.36 0.25 0.51 37.69 34.40 2375.80 126.60 7.20 11186.10

109.69 (-)37.02 72.67 11.60 21.09 0.06 4.24 0.23 0.01 19.97

17145.20 697.50 6115.20 63559.00

26.97 1.10 9.62

100

16104.80 627.60 (-)3002.30 56009.10

28.75 1.12 (-)5.36

100

43 | P a g e S. R. Luthra Institute Of Management

A study on Analysis of Financial Statements of Bharti Airtel

Analysis and Interpretation:


1. As camper to sales to other selling and administrative & other expense cover 64.11% & 66.92% respectively for 2010-11 & 2011-12. cover the large amount of revenue so thats not good for the company and mostly affected the company performance. 2. Hear that profitability of company s performance that sows as per profit before tax is as camper to sale is 23.01 & 17.54 respectively 2010-11 & 2011-12.that shows that company profit margin is low than capitalization rate that is 23.77% but is not good for the company as well as investor. 3. According to reserve & surplus is 75.37% & 74.78% respectably to 2010-11 & 201112. Thats show hat company is not maximize use of their funds in implication is not proper meaner. 4. Company fixed asset is very high i.e. 72.67% & 69.21 % respectively 2010-11 & 2011-12. it shows that company bare low fix cost during operation that is good for the company. 5. As camper the total asset to investment that 21.09 % & 19.41 % respectively in 201011 & 2011-12 hear the company sales there in current year by same proportion this not good for the company. 6. Overall performance of the company that better could in next year by that increasing performance by sale and low cost that should be improving that.

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A study on Analysis of Financial Statements of Bharti Airtel

Trend Analysis:Particulars Sales Index PBDIT Index PBIT Index PBT Index PAT Index Share Holders Fund Index Total Debt Index Net Block Index Net Current Assets Index Total Assets/Total Liability Index 2011-12 41603.80 1.61 13760.30 1.28 7844.30 1.07 7298.40 1.06 6231.40 1.00 49429.60 2.44 14129.40 2.14 43984.30 2.31 6115.20 1.02 63559.00 2.37 2010-11 38015.80 1.48 13643.90 1.27 9032.30 1.23 8747.40 1.27 7716.90 1.24 44111.60 2.18 11897.50 1.81 40700.80 2.14 (-)3002.30 0.50 56009.10 2.09 2009-10 35609.54 1.38 15084.80 1.40 10986.88 1.50 10652.75 1.55 9426.15 1.51 36737.18 1.81 5038.92 0.77 28024.97 1.47 (-)3616.91 0.61 41776.12 1.56

(RS IN CRS.)

2008-09 34048.32 1.32 11953.93 1.11 8568.83 1.17 8088.52 1.18 7743.84 1.24 27643.97 1.37 7713.65 1.17 25013.36 1.35 (-)4000.26 0.67 35357.62 1.32

2007-08 25761.11 1 10766.45 1 7333.80 1 6879.70 1 6244.19 1 20241.49 1 6570.34 1 19030.65 1 (-)5922.94 1 26811.80 1

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A study on Analysis of Financial Statements of Bharti Airtel

Trend Analysis and Interpretation:


1. In sale continuously increase. This is good performance of the company that is currently company is market leader in telecom industry. 2. As per as profit after tax is concern high profit sow the high performance of the company hear the company 2009-10 is very high but company should be maintain that profitability.

3. Share holders fund continuous up by creating the good image in the market thats shows the goodwill of the company. 4. Total debt of the company is in year 2009-10 is very low as camper the base year of 2007-08 this is good for company but in year 2011-12 is very high so that not maintain by the company.

5. net current asset of the company is in negative that not good for the company 6. Total asset/ total liability of the company is continues increasing that shows that turnover year by year thats good for the company.

46 | P a g e S. R. Luthra Institute Of Management

A study on Analysis of Financial Statements of Bharti Airtel

CONCLUSIONS:The company has been doing their activity effectively and efficiently. The company has a sound long term solvency. The company can rise from the financial crush it is in right now by taking proper steps to increase its sales of production and to minimize cost by maximize utilization of resources. A already known there is a thin line between profitability and liquidity and the company lost two years made a profit has very low and another two making better profit. This shows the company in a good position and the management of the company has much as better so that does way maintain the market leadership.

47 | P a g e S. R. Luthra Institute Of Management

A study on Analysis of Financial Statements of Bharti Airtel

RECOMMENDATIONS:1. The company should maintain an adequate cash and bank balance in order to meet the emergency requirements. 2. The current ratio of the company has decreasing year to year. The company must utilize their current asset accurately. 3. The sales of the company go on increasing better to increase sales for more profit in future. 4. Net profit of the company has decreased when compare to last year. Better to decrease the unnecessary expenses of the company to increase the profit. 5. The Net working capital of the company has negative. Shows excess of current liabilities over current assets. It must positive for future years. 6. Loans of the company increasing in year 2010 compare to previous year, it shows that the profit was distributed to the interest, better it should not the same for next year. 7. 8. Better to maintain the same amount of fixed assets in future for full utilize fixed assets. Allowing debt for long period by company shows it is not strict in its debt collection. Better it should collect its debt as early. 9. Better to maintain high return on share holders investments.

10. Better to curtail the debenture interest to avoid paying interest. 11. For the smooth operation of the company if must make sure that it is made liquid in the coming year, because right now a lot rests on the operation of the business.

48 | P a g e S. R. Luthra Institute Of Management