Projected Financial Statement of Ashok Leyland for the 2013-14

This assignment is concerned with the financial statements which I have prepared for the company Ashok Leyland. Financial statement provides information about the financial position, changes and performance in financial position which is helpful in taking economic decisions. Financial statements prepared should be reliable, relevant and comparable. Reported assets and liabilities, income and expense is related to an organizations financial position. Financial statements are useful to the owners and managers, prospective investors, employees and financial institutions.

Statement showing five years Profit & Loss account of Ashok Leyland From March 2009 to 2013 and projected Profit & Loss account for the year 2013-2014

Particulars Sales COGS EBIT INTEREST EBT TAX PAT DIVIDEND

March09 7972.52 6671.79 722.28 83.63 638.65 168.84 469.81 199.77

Growth Percentage -22.63 -21.92 -49.36 88.09 -67.36 -89.07 -59.56 -33.41

March10 6168.99 5209.34 365.75 157.3 208.45 18.45 190 133.03

Growth Percentage 76.79 20.86 76.79 -35.25 161.35 556.37 122.99 50.004

March11 7436.18 6295.83 646.63 101.85 544.78 121.1 423.68 199.55

Growth MarchGrowth MarchPercentage 12 Percentage 13 53.4 11407.15 16.68 13309.59 51.4 9532 14.54 10917.69 53.21 990.73 -4.59 945.22 85.49 188.92 35.11 255.25 47.18 801.81 -13.95 689.97 40.79 170.5 -27.27 124 49.006 631.31 -10.35 565.97 33.34 266.07 0 266.07

CAGR 0.107933801 0.10351357 0.055274546 0.250030849 0.015578407 -0.059867063 0.037944737 0.058993094

Budgeted 14746.14463 12047.81907 997.466606 319.0703741 700.7186333 116.5764842 587.4455826 281.7662925

SALES V/S COGS

100
200

EBT V/S PAT

100 0

50 0 -50 Mar 09-10 (%) Mar 10-11 (%) Sales Mar 11-12 (%) COGS Mar 12-13 (%)

Mar 09-10 (%) Mar 10-11 (%) Mar 11-12 (%) Mar 12-13 (%) -100 EBT PAT

Statement showing five years Balance Sheet of Ashok Leyland

Particulars Sources of funds Share Capital Net Worth Liabilities Long term liabilities Current liabilities Assets Fixed assets Current assets Total

MarchGrowth 09 Percentage 133.03 2148.98 NIL 61.65

March10 133.03 3473.89

Growth MarchGrowth MarchGrowth MarchPercentage 11 Percentage 12 Percentage 13 NIL 5.25 133.03 3656.3 NIL 8.38 133.03 3962.96 115.04 6.28

CAGR

Budgeted

286.07 4211.77 0.14405

286.07 4818.49

887.5 2196.49

121.07 0.49

1961.98 2207.29

16.23 36.03

2280.45 3002.68

16.56 16.74

2658.19 3505.26

-9.88 38.004

2395.53 0.21968 4837.41 0.17105

2921.79 5664.87

2942.44 1644.3 3036.48

68.34 44.43

4953.27 2374.91

21.51 19.97

6018.63 2849.22

11.19 25.43

6691.89 3573.64

7.21 -2.24

7174.3 0.19513 3493.56 0.16267 6607.3 0.16824

8574.21 4061.87 7718.89

79.02 5435.87 9.21 5936.75 11.53 6621.15 -0.21 From March 2009 to 2013 and projected Balance Sheet for the year 2013-2014

LONG TERM LIABILITIES V/S CURRENT LIABILITIES

150 100 50 0 -50 Mar 09-10 (%) Mar 10-11 (%) Mar 11-12 (%) Mar 12-13 (%) Long term liabilities Current liabilities

FIXED ASSETS V/S CURRENT ASSETS

150 100 50

0
Mar 09-10 (%) -50 Fixed assets Current assets Mar 10-11 (%) Mar 11-12 (%) Mar 12-13 (%)

Analysis of Profit & Loss Account From the above prepared statements and charts following assumptions have been taken which affects the political, economic, social, technical, environmental and legal factors of the company. Here we can see that in the year 2009-10 the sales growth rate was declining due to overall slowdown in industrial and construction activity and the resultant caution among the transporters. Thereafter it increases tremendously in 2010-11 and 2011-12 as the Indian economy achieved a high growth rate of 8% and increase in the demand of Medium & Heavy Commercial Vehicles (M&HCVs). But again in 2012-13 the Indian Economy experienced a low growth rate of 5%-5.5% resulted in lower GDP and lower growth rate of sales. So by looking at the growth rate I assume CAGR at around 10% with the hope of slight increase in GDP of 6%. From the chart showing comparison between COGS and sales, it is analyzed that during 2010-11 due to change in Indian government auto policy there is increase in cost of raw material and due to this there is vast difference in sales and COGS. The second major change that took place is increase in the interest rate during 2009-10 as company had taken a loan for expanding the segment of Light Consumer Vehicles and Commercial Vehicles in 2009-10. Due to this there is decrease in the overall profitability of the company. With the increase in the interest rate company has not enough funds to pay the tax and so Profit after Tax decreases in 2009-10. But thereafter there is improvement in the interest rate, resulted in improvement in Profit after tax.

As Profit after tax increases for the projected year 2013-14 as compared to 2012-13 company is paying reasonable dividend to all its shareholders. It suggests good reputation and goodwill of company in the automobile industry.

Analysis of Balance Sheet Share Capital: - The share capital remains constant from 2009 to 2012. It increases in 2013 as company has diluted more funds in the market and now there is no further scope of inviting more investors to invest in the company and therefore the budgeted value is expected to be remain same only. Net Worth: - As companys overall profitability will increase we can say that there will be increase in growth of net worth or book value as long as these earnings are not distributed to the shareholders and retained in the business. Long term liabilities: - As companys long term liability is increasing from 2009 to 2013 as it is making profit and doing expansion there is chance of increase in liabilities in the future also. Current liabilities:-As company is giving more credit period to its customers during the year 2010 to 2013 we can say that there is a possibility of increase in the future. In this case company has to stop borrowings from other countries and reduce the exports to some extent. Fixed assets: - Companys fixed assets is increasing constantly which means company is doing proper utilization of its assets and funds and doing long term planning for investment purpose. So we can say there is scope of increase in the value of fixed assets. Current assets: - Companys current assets is increasing constantly due to increase in sales and profitability. So by increasing the current assets there is increase in inventories and as I have already mentioned in the assignment 1 that company is looking for a long term investment in the commercial vehicles there is scope of increase in the value of current assets in the future also.

Conclusion Looking at the companys future prospects and objectives of long term planning we can say that company will be able to sustain in the present environment for a long period of time. Notes:-

1) CAGR = (Ending Value/Beginning Value)1/n 1 2) Budgeted Value = Ending Value * (1+ CAGR) References:1) http://en.wikipedia.org/wiki/Ashok_Leyland (for history) 2) http://www.scribd.com/doc/36935129/ASHOK-LEYLAND (for PESTEL ANALYSIS) 3) www.moneycontrol.com (for balance sheet and profit & loss)