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COMPANY PROFILE

Luxottica is a global leader in the design, manufacture and distribution of fashion, luxury and
sports eyewear with high technical and stylistic quality.
Among its core strengths, a strong and well-balanced brand portfolio includes iconic
proprietary brands such as Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples and Alain
Mikli, as well as highly attractive and prestigious licenses including Giorgio Armani, Burberry,
Bulgari, Chanel, Dolce&Gabbana, Michael Kors, Prada, Ralph Lauren, Tiffany & Co., Versace
and Valentino.
Luxottica's international expansion has developed its geographic footprint worldwide. The
Groups global wholesale distribution network covers more than 150 countries and is
complemented by an extensive retail network of approximately 7,400 stores, with LensCrafters
and Pearle Vision in North America, OPSM and LensCrafters in Asia-Pacific, GMO in Latin
America and Sunglass Hut worldwide.
One of the Groups competitive advantages is the vertically integrated business model built
over the years, covering the entire value chain: design, product development, manufacturing,
logistics and distribution.
Product design, development and manufacturing take place in Luxotticas six production
facilities in Italy, three factories in China, one in Brazil and one facility in the United States
devoted to sports and performance eyewear. Luxottica also has a small plant in India serving
the local market.

Mission & Strategy


Luxottica's mission is to protect the eyes and enhance the look of women and men in the
world, creating the best possible eyewear to satisfy its clients and interpret consumer tastes and
aspirations. The Group pursues this mission ethically and responsibly, engaging all of its energy,
skill and experience, keenly aware of how essential glasses are to the well-being of consumers,
allowing them to work, read and communicate their personal style.
Each collection, each pair of glasses is the result of an ongoing R&D process which combines
passion, innovation and creativity with the latest technology and master craftsmanship.
Luxotticas spirit of excellence stands out in the way of working, at all levels and in all
geographical areas.
Luxottica is open-minded toward new ideas and ways of viewing, different models and cultures,
in an effort to continuously improve and maximize the companys potential in increasingly
competitive global markets.
Luxotticas long-term strategy is to continue to expand in the eyewear and eye care sectors by
growing its various businesses, whether organically or through acquisitions. The Company will
continue to focus on the following strategic pillars: vertical integration, design and technological
innovation, brand portfolio management, market expansion, financial discipline and the
development of talented and committed employees.
Building strong brands that create enduring relationships with consumers is key to how
Luxottica plans to sustain its business in the future. In this direction we continue to invest to
strengthen and balance our portfolio with the acquisition of new brands and the addition of new
licensing agreements,in order to continually attract a wide range of consumers around the world
with different tastes and lifestyles.
Luxottica is committed to maintaining and strengthening its position in the markets in which it
operates. It also focuses on evaluating opportunities to further penetrate emerging markets, a
key driver of its long-term growth strategy. Luxottica aims at increasing its market expansion
through stronger retail distribution while consolidating its wholesale network and further growing
its presence in e-commerce, department stores and travel retail.

CASHFLOW ANALYSIS
Introduction
Cash flow statement [CFS] provides information about the historical changes in cash by
classifying cash flows during the period from operating activities, financial activities and
investing activities of a concern. It shows the summary of cash flow on account of these
activities.
Operating activities as the principal revenue-production activities of the enterprise These
activities determines the net profit or loss of a concern. Operating Activities refer to the
operations of a business of purchasing, sales etc. Sales generate cash; purchase and
expense use up the cash. Net profit leads to net increase in cash.Net increase in cash
from operating activities is the main source of cash inflow.
Investing activities as the acquisition and disposal of long tern assets and investments.
Acquiring and selling of a subsidiary or other concerns should be shown as Investing
Activity. Investing Activities of acquisition of fixed assets, long term investing reduces the
cash and indicate cash outflow. Investing activities of disposal of fixed assets etc increase
the cash inflow.
Financial activities as the activities resulting in the changes in the size and composition of
the owners capital and borrowing of the enterprise. Owners capital includes preference
capital in case of a company. Financial Activities such as issue of shares, taking a loan
from Bank, sale of fixed assets etc. increase the amount of cash available and form the
source of cash inflow. Financial activities such as repayment of preference capital or
repayment of loan reduce the amount of cash and indicates cash outflow.

Cash Flow Statement


Year ended March 31, (Ra. In Million)
Table Cash Flow Statement
2015

2014

2013

2012

2011

5359
1166
-595
1690
-2802
-771
-174

3,978
1,078
457
125
-2,118
-588
-10

3,096

2,456.24

1971.85

688
65
35
-1,069
-238
-8

342.62
92.45
56.12
715.15
35.59
109.8

-11885
-5157
-1565
6182
28518
-5459
23059

-7,633
-299
-1,120
5,445
32,303
-4,252
28,051

-6,991
-1,033
-317
6,150
24,102
-4,543
19,559

4,433.69
311.74
455.23
4,180.42
20,456.00
2,354.70
18,101.30

-3670.41
-359.89
-281.5
2748.13
-594
-1568.36
-2162.36

-14226
479
-

-13,005
149
-

-7927
113
-

6,465.43
168.98

-4100.97
121.86

231684

123,579 59,047

70,145.11

-10706.5

250013
150
-32790
2490

122042
-650
-6608
2,118

52,043
-2,777
923
-

66,383.54 48.06
285.3
617.99
-465.27
254.15
777.85

Net cash generated by/(used in) Investing


-25568
C. Cash flows from financing activities:
Proceeds from exercise of Employee Stock

-19533

16672

144035.2

-14039.7

Option
Share application money pending allotment
Interest paid on borrowings

9,458
35
-125

4,704
63
-35

2,576.58
12.05
56.12

238.6

A. Cash Flow from Operating Activities


Adjustments for :
Depreciation and amortizations
Amortizations of stock compensation
Unrealized foreign exchange Net
Interest on borrowings
Dividend/interest Net
(Profit)/Loss on sale of investments
Gain on sale of fixed assets
Working Capital Changes :
Trade and other receivable
Loans and advances
Inventories
Trade and other payables
Net cash generated from operations
Direct taxes paid
Net cash generated by operating activities
B. Cash flows from investing activities:
Acquisition of property, fixed assets
Plant and equipment(Inc. advances)
Proceeds from sale of fixed assets
Purchase of investments
Proceeds
on
sale/from

maturities

Investments
Inter-corporate depo sit
Net payment for acquisition of Business
Dividend/interest income received

-132.77
-762.41
-107

on

541
40
-1690

Dividends paid (including distribution tax


Proceeds/(repayment) of long term
Proceeds/(repayment) of short term
Proceeds from issuance of shares

-12632
-74970
110641

-8,875
142
1825

-3,998
-268
-200

7,575.76
432.43

-262.36
463.02

Subsidery
Net cash generated by financing Activities
Net increase in cash and cash equivalents

55
21985

35
2495

266

266.19
-5209

147.53
-12954.5

During the period


Cash and cash equivalents at the Beginning of

19476

11013

3154

2469.95

-958.77

the period
Effect of translation of cash balance
Cash and cash equivalents at the end of Period

19822
-28

8858
-49

5714
-10

3242.7
0.92

4210.08
-8.61

39270

19822

8858

5713.57

3242.7

by

*includes Rs. 7,278 Million in a restricted designated bank account for payment of interim
dividend
Interpretation of Cash Flow Statement
Overall Cash flow Statement shows that cash has been generated through Operating activity is
Rs 23059 , 28051 , 19559, 18101, -2162.36 and in the years 2015-16, 2014-15, 2013-14, 201213 and 2011-12 respectively. So major part of cash inflowing is Operating department.
Investment Activity Shows Cash Outflow and borrowing activities takes a little part in increasing
cash.

Operating Activities : Profit before tax is increased by Rs. 25038.17 Million and Net Cash
generated by Operating activity is increased by Rs. 25221.36 Million because,

Depreciation and amortizations are increased by Rs. 3387.15 Million in between


four year.

Trade and other receivable are also increased by Rs. 8214.59 Million in between
four year.

Investing Activities : Net Cash outflow from investing activities is Rs. 11528 Million
because,

Company has increased its plan and equipment worth Rs.10625 Million in
between four year.

Investment is also increase worth Rs. 220977 Million in between four year.

From this inference that these investments has been met out of the cash from
Operations or borrowings.

Investments in Fixed Assets could be part of Companys plan of expansion or


modernization.

Financial Activities: From the section on cash flow from Financial Activities company
think to proceeds in both short term and long term borrowings with proceeds from
exercise of employee stock option.

OBJECTIVES OF THE STUDY


CONCEPTUAL :-( Cash Flow Analysis)
To prepare a cash flow analysis and interpretation by applying various mathematical and
Cash flow tools and techniques.

FACTUAL :-( Analysis of facts (results) derived from the Cash Flow technique
The present earning capacity or profitability of the Luxottica

The short-term liquidity and long-term solvency.


The Cash flow stability of a business.
To analyze different ratios so to judge the availability and effective usage of Cash
flow.

RESEARCH METHODOLOGY

Research Methodology is a systematically solve the research problem. It has many


dimensions and research methods constitute a part of the research methodology.

Thus when we talk about research methodology, we do not only talk of the research
methods but also consider the logic behind the methods. We use in context of our research
study, so that research results are capable of being evaluated either by researcher himself
or by others.

To effectively carry out in research, I would use the following research process, which
consists of series of actions or steps.
Research comprises of the following steps:-

1. Formulating the research Problem.


2. Research design & Sample Design.
3. Analysis of data gathered
4. Data analysis comparison
5. Graphics and interpret
1 FORMULATING THE RESEARCH PROBLEM
This is the first step under which the problem is stated in general way and then ambiguities i.e.
understanding and rephrasing the problem thoroughly and rephrasing the same into a
meaningful terms from an analysis point of view.
The research problem under the present project was to study data of various funds. For this
research process was to be formulated and the execution of which would result in the desired
data.
2. PREPARING THE RESEARCH DESIGN
The function of research design is to provide for the collection of relevant evidences with
minimal expenditure of efforts, time and money.
Research Design

Type of research

Sample design
TYPE OF RESEARCH

The type of research under present is an analytical research. In analytical research; we use
tact's or information already available, and analyze these to make a critical evaluation of the
material. Hence the same would be done.

In this project I had collected facts, data, and information.


SAMPLE DESIGN

A sample design is a definite plan determined before any data is actually collected for obtaining
a sample. Researcher must select a sample design, which should be reliable and appropriate
for his report.
3. OBSERVATIONAL DESIGN (COLLECTION OF DATA)
Observational design relates to the condition under which the observations are to be made.
Observational design in respect to research. There are several ways of collecting the
appropriate data, which differ considerably in context of money, time cost and other resources at
the disposal of the researcher.

Data can be obtained from two important sources:

Primary data

Secondary Data

Primary data
Primary data are the data that are collected afresh and for the first time. Thus happens to be in
character. Primary data are collected by the following ways:a)

Observation

b)

Interview

c)

Schedule

d)

Questionnaire

Secondary Data
Secondary data are the data that are already collected and are only analyzed by
different sources these sources are as follows:

Corporate magazine

Manuals of various companies

Books, journals, newspaper

Employment exchange
The secondary data would be collected from Cash flow statement, journal of national

repute, books of national and international author as well as the annual report of the company.
In addition to this internet access will make the study more effective and meaningful.
CONCLUSION AND RECOMMENDATION
Cash flow analysis is analysis of Cash flow statements of and enterprise. Cash flow
statement reorganized collection of data according to logical and constituent accounting
procedures. How ever Cash flow statements in their traditional from giving historical data and
information are of little us to these who use them to draw certain conclusion.
Cash flow appraisal is scientific evaluation of profitability and Cash flow strength of any
business concern. Cash flow appraisal techniques include ration analysis common size analysis

trend analysis, fund flow analysis etc. these techniques may be applied in the Cash flow
appraisal of any entity and LUXOTTICA Ltd. is no exception to it.

PROFITABILITY
The measurement of profitability is a tool of overall measurement of efficiency an overall
study profitability of LUXOTTICA has been Dade in relation to sales operating assets capital
employed and its net worth.
By analysis the working result i.e. Profit and loss account of LUXOTTICA. It was found that
the net profit before interest and tax of the LUXOTTICA is showing increasing trends. This is
very good for LUXOTTICA. The increase in the profits is nearly 24% more then previous year

the reason is good sales growth between years. For this following suggestion should be
considered.
Proper cost control is required and cost control technique should be adopted for it.
Operating expenses, admn. Expenses should be specially considered to be reduced.

Cash flow is the biggest items of balance sheet that must have demanded a large
amount of maintaining cost. So efficient Cash flow management should be done. Cash
flow should be reduced extent that would help to recover blocking money in Cash flow.

The service staff should be given proper training and better environment for work.
Proper advertisement and sales promotion is required.

Dairy has to pay large fix interest charged. Hence long term borrowing should be
reduced so that the earning is satisfactorily earmarked with them.

REFRENCES

I.M.Pandey, (1978), Cash flow management, Ninth addition, UBS Publication New Delhi.
Van

Horn,(2002),Cash flow Management and Policy,12th edition, Publisher Dorling

Kindersley India ltd.

Horne

Wwachonicz, J.R.Bhaduri (2005), Fundamentals and Cash flow management,

12th edition, Pearson publisher.

MY

Khan, P.K.Jain (1981), Cash flow Management,5th edition, Publisher Mc graw hill

companies.

Cash flow statement for the year ended 2007-08 as obtained from LUXOTTICA
Annual-Report 2006-07 of LUXOTTICA
Study module on Cash flow management
Cash flow dailies.
Economic Times
Business Standard

Business Magazines
Business India
Business World

Internet Portals:

www.Luxottica.com

www.wikipedia.com