FSA GROUP ASSIGNMENT

Submitted to :
KRISHNA M C
Anirudh Banerjee (1727206) , Akshit Kapoor (1727203),
S Smita (1727259)

INCOME STATEMENT ANALYSIS

Though the net sales of the company have decreased, the contradictory factors being:

 The percentage of materials consumed have increased for such amount of sale by almost
7% as compared to previous year.
 The selling and distribution expenses have also increased.

All the expenses have increased except general and administrative expenses and miscellaneous
expenses. Miscellaneous expenses have drastically reduced by 85.38%.

Though all the expenses have increased the total expenditure has reduced mainly because of this
drastic decrease in miscellaneous expenses.

The reduction in interest expense and the balance sheet both show repayment of debts. This
reduces the financial risk of the company to some extent.

The increase in amount of depreciation and net block of assets in balance sheet shows purchase
of new fixed assets which talks about the expansion plan of the company.

As depreciation is tax deductible this increase in depreciation has resulted in decreased tax
payment and increase in profit after tax as compared to previous year.

The EPS remains the same as, though the profit has increased the amount of share capital has
reduced showing buy back of shares and reduction in number of equity shares.

The inventories have increased as a result of reduced sales.

Though the sales have reduced, the sundry debtors have increased, which calls for the company
to improve its receivables management.
The company has taken measures to expand its operations by way of acquiring new assets,
increasing its selling and distribution expenses but such expenses have no positive reflection on
sales.

Balance Sheet
Share Capital is decreasing from 2016 to 2017 which could mean that company has bought back
it’s own share.

The company has paid it’s unsecured loa which means company is in a stable position that is
why company is paying it’s long term debts.

Because of shortage of funds company is selling off it’s investments and the liquidity position of
company is also decreasing

Debtors have increased marginally which indicates that most of the sales has been made in credit

Total current liabilities is decreasing marginally whereas total current assets is increasing
marginally which means there is some growth of the company in terms of liquidity

Provisions of the company is decreasing and reserves is increasing which indicate company has
transferred it’s provisions into reserves which can imply that company wants to pay dividends.

Work in progress is decreasing which means which means company is converting more of WIP
into inventory as their is a increase in inventory

As company’s profit is declining marginally , the company is increasing contingnent liabilities to

be on the safer side