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K.K.Parekh Institutes of management studies

( AMRELI )

Presented by: Hirani Vijay (05)

Bhalala Mahesh (27)

Guided ByMr. Nilesh Movaliya

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1 Overview of the company

2 Company profile

3 Products

4 Why financial analysis important for company5 Financial statement analysis

6 Ratio analysis

7 Conclusion

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MRF (Madras Rubber Factory) is Indias No.1 tyre manufacturingcompany. It was started in the year 1946 by K M Mammen Mappillai

as a small toy ballon unit. Much later in November 1960 it ventured

in manufacturing of tyres. The company entered a technical

collaboration woth Tire & Rubber company, USA.

Currently MRF exports tyres to over 65 countries including America,

Europe, Middle East, Japan, and Pacific region. It presently has

overseas offices in Dubai, Vietnam and Australia.

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Tyres - It manufactures various tyres for passenger cars, two-wheelers, trucks, buses, tractors, light commercial vehicles and off

the road tyres.

Conveyor belts- It manufactures conveyor belts with wide range ofgrades. It has a range of applications in industries like mining, ports,

thermal power plants, cement plants, fertiliser, steel, etc. It exportsthe products to 15 countries.

It also operates retreading systems for tyres that enhances roadgrip, provides greater mileage and many others features.

MRF Tyres & Services is one stop shop providing range tyres.

Currently it operates 90 franchisees across the country.

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(i) success of Promotion Depends on Financial Administration

(ii) Smooth Running of an Enterprise.

(iii) Financial Administration Co-ordinates Various Functional

Activities.

(iv) Focal Point of Decision Making.

(v) Determinant of Business Success.

(vi) Measure of Performance.

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Financial statement analysis

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Pat 212.29 338.92 250.23 137.43 163.99

No of share 4241143 4241143 4241143 4241143 4241143

EPS 500.55 799.12 590.01 324.04 386.66

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(2) Dividend per share

Formula: profit distributed / no. of share

(crore)

Profitdistributed

10.60 21.20 10.60 8.48 8.48

No.of share 4241143 4241143 4241143 4241143 4241143

DPS 25.00 50.00 25.00 20.00 20.00

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(3) Book value per share:

Net operating income per share:

Formula : operating income / no.of share

2011 2010 2009 2008 2007

5,417.81 3,986.38 3,210.03 2,642.66 2,325.20

year 2011 2010 2009 2008 2007

Operating

income9,716.54 7,462.74 5,679.57 5,060.81 4,410.22

No.of share 4241143 4241143 4241143 4241143 4241143

NOIPS 22,910.19 17,596.06 13,391.60 11,932.66 10,398.66

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(4) Operating margin ratio:

Formula : COGS + operating expenses

sales

year 2011 2010 2009 2008 2007

COGS 279.83 868.63 690.63 424.56 431.68

sales 3337.89 7755.61 5560.66 4908.21 4215.68

Operating

margin (%)8.37 11.20 12.42 8.65 10.24

( ) f

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(5) Net profit margin:

Formula: PAT / sales

year 2011 2010 2009 2008 2007

Pat 212.29 338.92 250.23 137.43 163.99sales 3337.89 7755.61 5560.66 4908.21 4215.68

NPM % 6.36 4.73 4.50 2.80 3.89

(6)

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(6)Return on investment ratio:

Formula: EBIT / net assets

Return on long term fund:

year 2011 2010 2009 2008 2007

EBIT 580.21 581.87 461.31 273.10 302.41

N A 6286.13 2903.54 2509.84 2227.56 1819.55

ROI 9.23 20.04 18.38 12.26 16.62

2011 2010 2009 2008 2007

17.04 24.72 28.34 16.86 23.29

(7) D b i i

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(7) Debt-equity ratio:

Formula: total debt / net worth

Fixed assets turnover ratio:

Formula: sales / fixed assets

2011 2010 2009 2008 2007

0.65 0.56 0.21 0.85 0.61

2011 2010 2009 2008 2007

FATR2.55 2.22 2.09 2.10 2.16

(8) C i

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(8) Current ratio:

Formula : CA / CL

Year 2011 2010 2009 2008 2007

CA 3,160.49 2,117.25 1,695.98 2,003.71 1,562.93

CL 2,525.78 1,378.38 1,410.14 1,299.52 940.72

CR 1.25 1.54 1.20 1.54 1.66

(9) Q i k i

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(9) Quick ratio:

Formula: CA Inventory / CL

year 2011 2010 2009 2008 2007

CA-Inventoyr 1616.50 978.65 1029.40 1000.63 856.05

CL2,525.78 1,378.38 1,410.14 1,299.52 940.72

Quick ratio 0.64 0.71 0.73 0.77 0.91

(10) I t ti

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(10) Inventory ratio:

Formula : COGS / Avg Inventory

Year 2011 2010 2009 2008 2007

COGS 279.83868.63 690.63 424.56 431.68

Avg Invetory 38.07 113.10 67.91 69.71 56.58

Inventory

turnover ratio7.35 7.68 10.17 6.09 7.63

(11) Di id d t ti

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(11) Dividend payout ratio:

Formula : equ. Div / PAT

year 2011 2010 2009 2008 2007

Equ div 423 2365 1208 960 946

Pat 212.29 338.92 250.23 137.43 163.99

1.99 6.98 4.83 6.98 5.77

(12) O ti l

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(12) Operetig leverage:

Formula: contribution / EBIT

year 2011 2010 2009 2008 2007

c 1718.55 6285.92 4313.96 3841.67 3304.75

EBIT 580.21 581.87 461.31 273.10 302.41

O L 2.96 10.80 9.35 14.07 10.92

(13) Fi i l l

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(13) Financial leverage:

Formula : EBIT / EBT

year 2011 2010 2009 2008 2007

EBIT 580.21 581.87 461.31 273.10 302.41

EBT 487.19 518.77 392.39 206.85 253.17

F L 1.19 1.12 1.17 1.32 1.19

(14) Combine le erage

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(14) Combine leverage

formula : OL * FL

year 2011 2010 2009 2008 2007

O L 2.96 10.80 9.35 14.07 10.92

F L 1.19 1.12 1.17 1.32 1.19

C L 3.52 12.09 10.94 18.57 12.99

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Company overall performance is good andfluctuation occur in sales, expenses, profits,and price a year by year.

The small changes are big impact on financialperformance.

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Thank you