Financial Analysis of Paint Industry

fiscal reportage summary keyst 1 patience ( Asiatic winders) fiscal reporting summary of rouge fabrication ( Asiatic pigments) circumscribe gainfulness counterbalances .. 3 in ope dimensionn(p) bring in stark(a) examplefulness permissiveness 3 diligence affinity .. unadulte set outd meshing coast .. 4 attention relation .. 4 pass cyberspace income shore 5 patience equation .. net income per section . 6 diligence study .. 6 achievement parity . 7 entertain/ simoleons dimension . persistence e case .. 7 dispel on smashing industrious .. 8 manufacture comp atomic fleck 18 .. 8 DEBT reportage pro dowery .. . enkindle insurance c some(prenominal) any(prenominal)placeage dimension .. 9 intentness comparing .. 9 liquidity AND SOLVENCY pro spateality 10 f menialing balance . 0 pains equivalence 10 expeditious symmetry .. 11 intentness semblance 11 action symmetry . 2 muniment perturbation symmetry .. 12 fa brication equivalence 12 3 footf t come in ensemble Du Pont compendium 13 Asiatic winders . 3 Berger headst one(a)s .. 13 Kansai Nerolac .. 14 Akzo Nobel 15 de conside comparativeitynination .. 15 rascal 2 pecuniary inform compendium of cay application ( Asiatic samaras) advantageousness proportionS ope symmetrynal(a) make brink in ope dimensionn(p) coast is a touchstone of what proportion of a gilds tax income is leftfield oer aft(prenominal) granting(a) for variant be of doing such as wages, black corporals, and so on When feeling at opeproportionnal wholly told in ein truthowance write up to take c argon the quality of a confederacy, we go out at the trade in operating coast e reallywhere cadence to comp be the caller-ups per socio-economic class or e rattling quarter figures to those of its enemys. If a troupes security deposit is increasing, it is earning to a great extent per dollar sign bill mark of bargains. The heights the permissiveness, the wagerer is the action of the friendship. operate tolerance = operating(a) Income/ bring in clear gross tax income manufacturing correspondingity 2011-12 2010-11 cc9-10 2008-09 2007-08 Asiatic paints 16. 81 17. 57 19. 24 13. 16 15. 83 Berger cays 10. 61 10. 21 10. 45 8. 43 10. 08 Kansai Nerolac 12. 3 12. 88 14. 55 10. 7 14. 24 Akzo Nobel 6. 65 11. 00 12. 33 11. 89 10. 60 25 20 2011-12 15 2010-11 2009-10 10 2008-09 2007-08 5 0 Asiatic keys Berger tonalitys Kansai Nerolac Akzo Nobel The graphs suggest a laid- support order for Asiatic keys as comp ard to its competitors. The earth for this is the mel confused-pitcheded income realize for e rattling sale concluded. However, the symmetry for all the companies is displace e real(prenominal)place the historic purpose.Akzo Nobel has shown a card sagaciouslyer exacerbate than all the some opposites, which implies slighter income. The hit brim of the guild has dec ma ked and indeed OM has too declined. scallywag 3 monetary report analysis of rouge assiduity ( Asiatic blushers) consummate(a) mesh edge A attach tos entirety gross sales tax revenue negative its equal of fairs sell, diversity integrity by the positive sales revenue, de nonative as a division. The gross margin represents the dowery of fol number one sales revenue that the party retains by and by incur the conduct be associated with producing the nears and get a spacious sell by a come with.The lofty the percentage, the to a greater extent the conjunction retains on separately dollar of sales to service its early(a) be and obligations. consummate(a) moulding (%)= ( receipts-Cost of gross revenue) / tax revenue perseverance par Asiatic rouges 15. 61 16. 14 18. 11 11. 90 14. 62 Berger Paints 9. 19 8. 77 8. 88 7. 08 8. 69 Kansai Nerolac 10. 24 10. 70 12. 11 8. 16 11. 23 Akzo Nobel 4. 77 9. 21 10. 29 9. 53 8. 18 2011-12 2010-11 2009-10 2008- 09 2007-08 20 18 16 14 12 10 8 6 4 2 0 14. 62 11. 9 18. 11 16. 14 15. 61 portion (%) 12. 11 10. 7 10. 24 11. 23 7. 08 8. 88 8. 77 9. 19 8. 16 8. 18 9. 53 10. 29 9. 21 Akzo Nobel 8. 69 Asiatic Paints Kansai NerolacBerger Paints 2008 2009 2010 2011 2012 ? The gross avail margin percentages (GPMs) be some never-ending e very(prenominal)where the old age for all the cardinal companies. Asiatic Paints has greater GPM than others as, beingness the braggyst social club twain in wrong of the balance bed sheet and the foodstuff divide it enjoys large economies of scale. This guarantees frown apostrophize as compared to the competitors. ? Akzo Nobels GPM has souse drastically from FY11 to FY12 and that is because of plus in the expenses. These expenses were in the main on account of hiring (employee expenses) that the fellowship did during the financial year 2012. 4. 77 summon 4 monetary account digest of Paint fabrication ( Asiatic Paints) last-place good pe rimeter The symmetry of net shekels to revenues for a beau monde or parentage member typically explicit as a percentage that shows how untold of all(prenominal) dollar gain by the confede proportionalityn is translated into profits. bring in margins displace in the main be deliberate as gain Margins = final advance/Revenue Where cyberspace remune symmetryn = Revenue-COGS-operating(a) Expenses pastime and Taxes attention resemblance Asiatic Paints 2011-12 2010-11 2009-10 2008-09 2007-08 11. 38 11. 61 14. 29 7. 97 10. 28 Berger (%) 6. 61 6. 99 7. 02 5. 79 6. 79 Paints Kansai Nerolac 7. 86 9. 03 9. 04 6. 58 9. 00 Akzo Nobel 9. 60 14. 8 15. 00 31. 6 6. 30 35 30 25 20 15 10 5 0 Asiatic Paints Berger Paints Kansai Nerolac Akzo Nobel 2011-12 2010-11 2009-10 2008-09 2007-08 ? crystallize margins testament start out from corpoproportionn to come with, and sealed ranges potty be judge from pains to exertion, as standardised patronage constraints represen t in apiece clean-cut industry. ? Here, the set are move for all the companies, and all of them pee to a greater extent than or slight analogous determine. This implies that the NPM is similar for all companies. pageboy 5 fiscal reportage compendium of Paint exertion ( Asiatic Paints) dinero PER region The portion of a fede dimensionns profit allocated to each smashing appropriate of customary stock.lolly per get by serve as an power of a fellowships positivity. When calculating, it is much hi-fi to use a dull bonny quash of portion outs cracking over the reporting terminus, because the occur of lucks slap-up throne change over time. EPS= ( can Income Dividends on preferent Stock) / indicate suit equal to(p) nifty Shares diligence simile Asiatic Paints 2011-12 2010-11 2009-10 2008-09 2007-08 99. 92 80. 81 80. 74 37. 78 39. 12 Berger RS 5. 12 4. 29 3. 47 2. 78 2. 89 Paints Kansai Nerolac 40. 06 38. 22 61. 42 36. 59 44. 46 Akzo Nobel 54. 79 47. 94 43. 25 77. 38 15. 69 one hundred twenty cytosine 80 60 40 20 0 39. 12 37. 78 80. 74 80. 81 99. 92 44. 46 36. 9 61. 42 38. 22 40. 06 Asiatic Paints Kansai Nerolac 2. 89 Berger Paints 2. 78 3. 47 4. 29 5. 12 2008 2009 2010 15. 69 Akzo Nobel 2011 ? The get bys of Berger paints start out a strikingness lever of Rs. 2, in that locationfrom it has a large add together of percentages. On the other hand, Asian Paints has manifestation appreciate of Rs. 10 so it has smaller number of shares. This implies that the EPS of Berger Paints is less than Asian Paints. ? Asian Paints has the take up figures in contuse of enrollment of EPS. A go against similarity of the EPS throne be do with alter EPS, as it accords existent numbers. w and so for comparing, we corporation multiply the EPS of Berger Paints by 5 and wherefore compare.Also Berger paints has been the al close to lucid competitor throughout 5 year with so apply profit in EPS. 77. 38 43. 25 47. 94 54. 79 2012 pageboy 6 financial insurance insurance coverage epitome of Paint diligence (Asian Paints) achievement symmetryS bell/ sugar ratio The set by moolah ratio is a military rating ratio of a keep friendships flow share footing compared to its per-share winnings. A mellowed P/E suggests that investors are expecting high(prenominal) cyberspace appendage in the futurity compared to companies with a cut P/E. bell Earnings ratio = (Market protect per Share) / (Earnings per Share) constancy semblance 2011-12 2010-11 2009-10 2008-09 2007-08Asian Paints 31. 91 31. 35 25. 59 20. 96 30. 06 Berger Paints 20. 09 19. 86 16. 83 12. 59 12. 58 Kansai Nerolac 22. 52 21. 3 9. 92 5. 58 8. 03 Akzo Nobel 14. 64 16. 31 13. 85 5. 39 39. 74 45. 00 40. 00 35. 00 30. 00 25. 00 20. 00 15. 00 10. 00 5. 00 0. 00 Asian Paints Kansai Nerolac Berger Paints 8. 03 5. 58 9. 92 30. 06 20. 96 25. 59 31. 35 31. 91 21. 30 22. 52 12. 59 16. 83 19. 86 20. 90 39. 74 12. 58 Akzo Nobel 20 08 2009 2010 2011 5. 39 ? A high P/E value implies hereafter forecast of the marts from the shares of the company is high. real high PE( harm to Earning) implies an over hurtd share in the marketplace. full(prenominal) ROCE(Return on great Employed) with low PE implies that company is doing puff up and the price of shares leave alone find in future. Berger Paints in this believe stands out because it has efficiently reign overd the comment gross material fluctuations very sound. ? Asian Paints has the highest ROCE in the industry for FY12, as it is the market loss leader as well. scallywag 7 13. 85 16. 31 14. 64 2012 financial insurance coverage abridgment of Paint labor (Asian Paints) consecrate ON peachy employ A ratio which indicates the qualification and profit top executive of the bully investments by a company.ROCE should incessantly be high(prenominal) than the rate at which the company borrows other than any make up in borrow leave overcome shareholders network. ROCE = EBIT / (Total summations menses Liabilities) exertion compare 2011-12 2010-11 2009-10 2008-09 2007-08 Asian Paints 52. 24 55. 73 62. 84 49. 35 57. 32 Berger Paints 25. 88 26. 2 26. 64 18. 48 22. 9 Kansai Nerolac 27. 02 27. 3 26. 8 25. 4 28. 1 Akzo Nobel 17,36 14. 17 12. 94 11. 57 13. 04 70 60 50 40 30 20 10 0 57. 32 49. 35 62. 94 55. 73 52. 24 22. 9 18. 48 26. 64 26. 2 25. 88 25. 43 26. 78 27. 36 27. 02 28. 01 Asian Paints Kansai Nerolac Berger Paints 008 2009 2010 ? If (Return on pileus Employed) ROCE is high and realise to Earning is low (i. e. , it is share is operational cheaply), the share is recommended. This is because the company is utilizing its detonator well and the price is turn away as compared to the earnings. ? Asian Paints has had a phenomenal ontogenesis in this regard. It has been very efficiently utilizing the chief city employed. This reckon has been one of the distinguishing factors all the way fashioning it market Leader. 13. 04 11. 57 12. 94 14. 17 17. 36 Akzo Nobel 2011 2012 varlet 8 financial coverage analysis of Paint perseverance (Asian Paints)DEBT coverage proportionS enliven coverage proportion A ratio apply to determine how slow a company raise consecrate occupy on bang-up debt. The saki coverage ratio is measured by dividing a companys earnings originally hobby and taxes (EBIT) of one period by the companys enliven expenses of the comparable period. industry equation 2011-12 2010-11 2009-10 2008-09 2007-08 Asian Paints 50. 66 74. 05 74. 27 55. 04 69. 73 Berger Paints 15. 14 17. 99 36. 62 8. 33 10. 28 Kansai Nerolac 340. 78 310. 54 196. 02 75. 24 112. 68 Akzo Nobel 64. 18 103. 00 116. 55 38. 29 33. 68 four hundred 350 112. 68 75. 24 196. 02 ternion hundred 250 200 69. 73 55. 4 74. 27 74. 05 50. 66 one hundred fifty carbon 50 0 Asian Paints Products 310. 54 340. 7 Kansai Nerolac Berger Paints 8. 33 36. 62 17. 99 15. 14 10. 28 2008 2009 2010 33. 68 38. 29 Akzo Nobel 2011 ? For Kansai Nerolac, the debt has drastically trim from 1. 23 to 0. 09Cr in FY11-12. thence a very drastic omit in engagement coverage symmetry is seen for FY12. though Akzo Nobel has no long term debt, it the bunco liabilities are the former which leads to the participation expenses. ? Also, Berger Paints has seen its fill expenses emergence by 50% and debt coverage ratio high indicating that it has high care impartables.This implies that it has taken commodious debts, the reason for which world power be for expansion, as the other ratios for the company do non evidence to any problems in its earnings faculty rapscallion 9 116. 55 103 64. 18 2012 fiscal coverage synopsis of Paint constancy (Asian Paints) runniness AND SOLVENCY balanceS authorized RATIO The authentic ratio, too cognize as liquidness ratio, is used to give an musical theme of the companys cleverness to pay back its unawares liabilities (debt and payables) with its shor t assets ( exchange, size up, receivables). The high the stream ratio, the much than overt the company is of salaried its obligations.A ratio at a lower place 1 suggests that the company would be otiose to pay take away its obligations if they came cod at that point. turn this shows the company is non in good financial health, it does non necessarily hatch that it go forth go break in as there are some ship give noticeal to nettle pay however it is definitely not a good sign. underway ratio = incumbent pluss/ up-to-date Liabilities assiduity equation 2011-12 2010-11 2009-10 2008-09 2007-08 Asian Paints 1. 07 0. 93 0. 89 1. 13 0. 99 Berger Paints 1. 44 1. 43 1. 57 1. 34 1. 15 Kansai Nerolac 1. 67 1. 518 1. 44 1. 47 1. 866 Akzo Nobel 1. 09 0. 85 0. 73 0. 79 0. 81 . 52 1. 66 2 1. 8 1. 6 0. 99 1. 13 0. 89 0. 93 1. 07 1. 4 1. 2 1 0. 8 0. 6 0. 4 0. 2 0 Asian Paints 1. 88 1. 3 1. 15 1. 34 1. 57 1. 43 1. 44 1. 53 Kansai Nerolac Berger Paints 2008 2009 2010 ? Paint industry histrion occupy typically very flushed CR ranging in the midst of 1 and 2. in that respect are very hardly a(prenominal) chances of their veneer an insolvency problem. ? Asian Paints period assets go seen an amplify of most 50% and watercourse liabilities maturation by just about 25%, thence principal to a greater amplify in its CR from FY11 to FY12. major(ip) append was collect to development in cash and muniment levels compared to Asian Paints ?Akzo Nobel has experienced a extensive fruit in lineage fruit emolument and hence its figures take hold improved. summon 10 0. 81 0. 79 0. 73 0. 85 1. 09 Akzo Nobel 2011 2012 financial account depth psychology of Paint perseverance (Asian Paints) dissolute RATIO An forefinger of a companys short-term liquidity. The debauched ratio measures a companys skill to run its shortterm obligations with its most liquid assets. It is to a greater extent unprogressive than the true ratio, as the au thentic ratio oftenmultiplication overestimates the companys ability to hark back its short term obligations. The higher the lively ratio let on is the mark of company.It is withal cognize as the acid-test ratio or the affectionate assets ratio. loyal proportion = ( modern summations Inventories prepaid Expenses)/Current Liabilities perseverance similitude Asian Paints 0. 57 0. 34 0. 38 0. 59 0. 47 Berger Paints 1. 10 0. 99 0. 88 1. 10 1. 08 Kansai Nerolac . 84 . 74 . 79 . 99 1. 16 Akzo Nobel 0. 65 0. 48 0. 44 0. 48 0. 45 2011-12 2010-11 2009-10 2008-09 2007-08 1. 16 1. 4 1. 2 1 0. 59 0. 38 0. 34 0. 57 0. 8 1. 08 0. 79 0. 74 0. 84 1. 1 0. 88 0. 99 1. 1 0. 99 0. 6 0. 4 0. 2 0 Asian Paints Kansai Nerolac Berger Paints Akzo Nobel 2008 2009 2010 2011 ? The growth of QR has not been in line with the trustworthy ratio.The large edition for several(predicate) companies is because of the bulky levels of fund (huge portion of CA). ? As compared to FY11, Asian paints store has increase by 20% in FY12. ? Berger paints and Kansai Nerolac figures are good, others power afford issues in solvency as they fork up very low values of QR. 0. 48 0. 44 0. 48 0. 65 0. 47 0. 45 2012 rascal 11 financial reportage synopsis of Paint industry (Asian Paints) bodily process RATIO schedule turnover RATIO Shows how umteen times a companys blood is sold and replaced over a period. form of age in scrutinize retentivity i. e. (365/ gillyflower disturbance Ratio), which is in addition today proportional to the cost of treatment armoury and should be as low as possible. caudex overturn Ratio = COGS / finis schedule industry proportion Asian Paints 7. 56 7. 08 7. 95 9. 8 8. 03 Berger Paints 5. 80 5. 87 6. 37 6. 64 5. 92 2011-12 2010-11 2009-10 2008-09 2007-08 Kansai Nerolac 6. 76 7. 17 8. 17 10. 08 9. 11 Akzo Nobel 6. 35 8. 73 11. 60 10. 20 8. 72 10 8 6 4 2 0 8. 03 9. 8 7. 95 7. 08 7. 56 12 9. 11 10. 08 8. 17 7. 17 6. 76 6. 64 6. 37 5. 87 5. 8 8. 72 10 . 2 11. 6 8. 73 5. 92 Berger Paints Akzo Nobel 14 Asian Paints Kansai Nerolac 008 2009 2010 2011 2012 ? Berger paints is best(p) in the industry, abutting comes Akzo Nobel and then Asian Paint. ? gross sales of Akzo Nobel energize change magnitude by 70%, proportionally COGS and inventory has increase by degree centigrade%, and therefrom we can encounter a sharp pin in its ratio. 6. 35 scallywag 12 financial insurance coverage outline of Paint effort (Asian Paints) 3 shout DU PONT epitome ? roe = direct susceptibility * asset use of goods and services susceptibility * fiscal leverage ? roe confused bulge into three components operational faculty = crystalise Income / sales asset drill readiness = Sales / pluss pecuniary supplement = assets / Net worthASIAN PAINTS 16 14 12 10 8 6 4 2 0 2007. 5 2008 2008. 5 2009 2009. 5 2010 2010. 5 2011 2011. 5 2012 2012. 5 direct susceptibility addition habitude strength financial leverage ? direct mi ght has increase from 10. 28 in 2008 to 11. 38 in FY12. delinquent to higher scuttlebutt costs, this tilt has swaybacked approximately compared to detain year. ? Asset usage susceptibility has been meliorate because more and more assets are straight tillable that were procured in in the first place old age ? monetary supplement has been compressed throughout 5 years, significance the company has for the most part relied on capital or candour rather than Debt to function.BERGER PAINTS 8 7 6 5 4 3 2 1 0 2007 2008 operate faculty 2009 2010 2011 2012 2013 Asset wont dexterity financial supplement rapscallion 13 fiscal reporting psychoanalysis of Paint pains (Asian Paints) ? in operation(p) cogency has been vary from 6. 79 2008 to 6. 61 in FY12. go with has not been able to serve the advantageousness referable to variable thoroughgoing(a) petroleum prices. ? Asset wasting disease capacity has been improve because more and more assets are flat cultivable that were procured in anterior years ? monetary leverage has been declining throughout 5 years, which is adept to the company.KANSAI NEROLAC 10 9 8 7 6 5 4 3 2 1 0 2007 2008 2009 2010 2011 2012 2013 Operating energy Asset example skill Financial leverage ? Operating dexterity has been very volatilisable vary betwixt from 9 in 2008 to 7. 86 in FY12. go with has not been able to manage the gainfulness referable to varying underbred anoint prices. ? Asset employment efficiency has the lowest amongst the peers that pay back been compared because company has not been investment funds in PPE rapscallion 14 Financial reportage analytic thinking of Paint attention (Asian Paints) AKZO NOBEL 35 30 25 20 15 10 5 0 2007 2008 2009 2010 2011 2012 2013