PARTICULARS OBSERVATION INFERENCE

An increase in trade

receivables shows that the

Sales The revenue from operations company has pushed for

(Profit and Loss Statement) has decreased by 13% credit sales, even after

which the total sales have

come down.

A major chunk financial

activity’s outflow is due to

Interest and financial interest paid. This is risky as

Interest Paid
charges paid is Rs.346.72cr the company needs to pay
(Cash Flow Statement)
in 2017 these fixed obligations even

if it has net loss from

business.

The company seems to have

increased its credit period

(may be in order to improve

Trade receivables have
Trade Receivables sales), but it has not yielded
increased by Rs. ~180cr in
(Balance Sheet) results as sales have come
financial year 2018.
down. It has increased the

working capital requirement

for the business.

Profit Before Tax PBT is negative for both the The major part of expense in

(Profit and Loss Statement) years. both the years is financial,

 energy and freight costs.

This shows there is a huge

scope for improvements in

operations and supply chain

management.

The cash reserves of

company have reduced

Cash and cash equivalents
Cash and cash equivalents drastically. Low liquidity in
has decreased from
(Balance Sheet) a cement business can prove
Rs.53.99cr to Rs.2.58cr
to be too risky as there are

high daily operating costs.

The company's operations seem to be facing a tough time with increases in losses on Y-O-

Y basis. We see that the burden of finance charges have increased, in a time when profit

from operations is not enough to cover these costs. Most of the cash inflow from financing

activities is spent in financial costs. Over this the company is continuously selling its

assets, which is not a good sign for any company.