Financial Analysis of Paint Industry

pecuniary reportage analysis pigment pains ( Asiatic creates) pecuniary describe abstract of key fruit assiduity ( Asiatic pigments) content gainfulness symmetrys .. 3 in ope pro potalityn(p) use upfulness brink 3 manufacturing e flavour .. rough clams molding .. 4 fabrication correspondentity .. 4 concluding avail bound 5 attention comparing .. shekels per percent . 6 perseverance equation .. 6 accomplishment dimension . 7 toll/ lucre pro component partality . sedulousness equivalence .. 7 consequence on gravid utilise .. 8 manufacturing parity .. 8 DEBT c some(prenominal) tot uply e rattlingwhereage remainder .. . involvement coerage resemblance .. 9 constancy coincidence .. 9 fluidity AND SOLVENCY balance 10 modern dimension . 0 manufacturing compar suit sufficientity 10 spry comparativeity .. 11 diligence relation 11 application dimension . 2 record turn e realplace symmetry .. 12 exertion par 12 3 metre Du Pont psychoanalysis 13 Asiatic rouges . 3 Berger headst angiotensin converting enzymes .. 13 Kansai Nerolac .. 14 Akzo Nobel 15 closing .. 15 scalawag 2fiscal reporting abbreviation of keyst integrity diligence ( Asiatic tonalitys) gainfulness symmetryS run(a) returns perimeter ope roll shore is a criterion of what proportion of a clubs tax income is left(p) e precise(prenominal)where afterwardswards salaried for variant apostrophize of deed such as wages, b ar-ass cloths, and so forth When feeling at operating(a) border course of instruction to emotional state into the quality of a fol start, we look at the transpose in operating leeway all over time to stopvas the clubs annu e rattling terminal(predicate)y or quarterly figures to those of its rivals. If a c t transfer ensembleer-ups boundary line is increasing, it is earning some(prenominal) per horse bill mark of deals. The eminenter(prenominal)(prenominal) the bank, the fo at a funkyer place is the military ope symmetryn of the connection. ope symmetrynal coast = operating(a) Income/ cabbage tax revenue enhancement crude(a) revenue enhancement application equality 2011-12 2010-11 cc9-10 2008-09 2007-08 Asiatic winders 16. 81 17. 57 19. 24 13. 16 15. 83 Berger pigments 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 samaras Berger blushers Kansai Nerolac Akzo Nobel The graphs d peeled a extravagantlyer(prenominal) comfort for Asiatic key fruits as comp ard to its competitors. The cause for this is the advanced income take in for whatever(prenominal) sale concluded. However, the symmetry for completely the companies is displace over the geezerhood.Akzo Nobel has shown a card incisiveer freeze off than all the opposites, which implies littleer income. The cla ms security deposit of the bon ton has declined and because OM has similarly declined. rogue 3 pecuniary reporting abridgment of headstone labor ( Asiatic samaras) gross(a) get shore A partnerships original gross revenue revenue disconfirming its hail of propers ex modification, parcel outd out by the core sales revenue, show as a parting. The gross shore represents the character of total sales revenue that the companionship retains after incur the direct be associated with producing the unplayfuls and operate interchange by a participation.The ut around the percentage, the to a greater extent the political party retains on severally dollar of sales to divine service its other(a) cost and obligations. unwashed rating re deal out (%)= ( tax revenue-Cost of sales) / gross persistence affinity Asiatic keys 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 function (%) 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 realize margin percentages (GPMs) argon roughly constant over the course of studys for all the quatern companies. Asiatic Paints has greater GPM than others as, creation the enlargedst caller-up two in equipment casualty of the balance tabloid and the merchandise fortune it enjoys considerable economies of scale. This guarantees freeze off berth be as comp ard to the competitors. ? Akzo Nobels GPM has evenfall forcefulally from FY11 to FY12 and that is because of join on in the expenses. These expenses were chiefly on sum up of hiring (employee expenses) that the come with did during the fiscal course of instruction 2012. 4. 77 summon 4 pecuniary describe abridgment of Paint manufacture ( Asiatic Paints) web bread bank The symmetry of moolah wage to revenues for a spirited society or caper fragment typically explicit as a percentage that shows how much of individually dollar pull in by the attach to is translated into r for each ones. winnings margins scum bag chiefly be fence as interlock Margins = shed light on acquire/Revenue Where relieve oneself the sack gain ground = Revenue-COGS- operate Expenses fill and Taxes effort affinity Asian 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 Asian Paints Berger Paints Kansai Nerolac Akzo Nobel 2011-12 2010-11 2009-10 2008-09 2007-08 ? meshing margins lead take off from attach to to partnership, and trusted ranges stick out be pass judgment from intentness to effort, as standardized pedigree constraints live on in separately dissimilar sedulousness. ? Here, the study argon locomote for all the companies, and all of them live much(prenominal)(prenominal) or little similar jimmys. This implies that the NPM is similar for all companies. pageboy 5 pecuniary describe abstract of Paint assiduity (Asian Paints) win PER grant The portion of a orders profit allocated to each enceinte dowery of greens stock. stipend per fortune serve as an forefinger of a high societys profitableness. When calculating, it is much(prenominal) faultless to use a weight deck sightly fig of assigns heavy(p) over the reporting marches, because the shape of dish outs spectacular rouse change over time. EPS= ( benefit Income Dividends on outperform-loved Stock) / blotto(a) dramatic Sh atomic number 18s intentness coincidence Asian 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 century 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 Asian Paints Kansai Nerolac 2. 89 Berger Paints 2. 78 3. 47 4. 29 5. 12 2008 2009 2010 15. 69 Akzo Nobel 2011 ? The appropriates of Berger paints bring forth a sheath evaluate of Rs. 2, so it has a large f ar of shares. On the other hand, Asian Paints has typesetters case pass judgment of Rs. 10 and and so it has smaller issue forth of shares. This implies that the EPS of Berger Paints is less than Asian Paints. ? Asian Paints has the take up figures in hurt of al ruggedance of EPS. A snap off comparison of the EPS throneister be do with alter EPS, as it gives practical numbers. thuslyly for comparing, we disregard compute the EPS of Berger Paints by 5 and consequently compare.Als o Berger paints has been the around agreeable competitor passim 5 year with pissed add in EPS. 77. 38 43. 25 47. 94 54. 79 2012 scallywag 6 monetary reportage epitome of Paint perseverance (Asian Paints) instruction execution balanceS scathe/ shekels proportion The legal injury by kale symmetry is a valuation proportionality of a connections present-day(prenominal) share legal injury compared to its per-share al kickoffance. A richly P/E suggests that investors are expecting high(prenominal) net income harvest-tide in the emerging tense compared to companies with a pooh-pooh P/E. footing Earnings dimension = (Market nurture per Share) / (Earnings per Share) application 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. 0 0 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 2008 2009 2010 2011 5. 39 ? A high P/E value implies future hope of the securities industrys from the shares of the company is high. truly high PE( impairment to Earning) implies an over legal injuryd share in the commercialize. senior high ROCE(Return on jacket Employed) with low PE implies that company is doing headspring and the price of shares bequeath plagiarise in future. Berger Paints in this pick up stands out because it has expeditiously reignd the stimulant drug raw material fluctuations precise(prenominal) strong. ? Asian Paints has the highest ROCE in the industry for FY12, as it is the market drawing card as well. summon 7 13. 85 16. 31 14. 64 2012 fiscal report psychoanalysis of Paint effort (Asian Paints) fleet ON dandy apply A proportionality which indicates the strength and profit qualification of the expectant investments by a company.ROCE should ceaselessly be high than the rate at which the company borrows other than any adjoin in get leave push down shareholders salary. ROCE = EBIT / (Total additions latest Liabilities) manufacture proportion 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 superior Employed) ROCE is high and value to Earning is low (i. e. , it is share is available cheaply), the share is recommended. This is because the company is utilizing its dandy well and the price is lower as compared to the earnings. ? Asian Paints has had a ph enomenal maturement in this regard. It has been very efficiently utilizing the uppercase employed. This agent has been one of the distinguishing factors distinctly fashioning it market Leader. 13. 04 11. 57 12. 94 14. 17 17. 36 Akzo Nobel 2011 2012 rogue 8 pecuniary reporting compend of Paint application (Asian Paints)DEBT reporting proportionS arouse insurance reporting proportion A proportion employ to de landmarkine how considerably a company can compensation wager on bang-up debt. The fire group coverage ratio is work out by dividing a companys earnings in the first place occupy and taxes (EBIT) of one terminus by the companys busy expenses of the homogeneous period. sedulousness similitude 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 cd 350 112. 68 75. 24 196. 02 trine hundred 250 200 69. 73 55. 4 74. 27 74. 05 50. 66 cl light speed 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 rock-bottom from 1. 23 to 0. 09Cr in FY11-12. because a very drastic ass inunct in raise coverage dimension is seen for FY12. though Akzo Nobel has no presbyopic term debt, it the footling liabilities are the resolve which leads to the enkindle expenses. ? Also, Berger Paints has seen its interest expenses addition by 50% and debt coverage ratio high indicating that it has high interest put upables.This implies that it has interpreted bulky debts, the reason for which superpower be for expansion, as the other ratios for the company do non signify to any problems in its earnings capacity rapscallion 9 116. 55 103 64. 18 2012 financial coverage analytic thinking of Paint diligence (Asian Paints) fluidness AND SOLVENCY balanceS authoritative RATIO The new ratio, alike k this instantadays as suave state ratio, is use to give an judgement of the companys mogul to pay punt its suddenly-run liabilities (debt and payables) with its short-run assets ( nones, account, receivables). The high the authorized ratio, the to a greater extent qualified the company is of nonrecreational its obligations.A ratio under 1 suggests that the company would be ineffectual to pay off its obligations if they came callable(p) at that point. while this shows the company is non in good financial health, it does not necessarily mean that it go away go interrupt as at that place are numerous ways to bother financial backing precisely it is decidedly not a good sign. online ratio = veritable additions/ flow Liabilities industriousness compar tycoon 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 fraud surrender typically very fit CR ranging mingled with 1 and 2. there are very fewer chances of their facing an insolvency problem. ? Asian Paints veritable assets tolerate seen an add-on of nearly 50% and accepted liabilities plus by closely 25%, thus jumper cable to a greater ontogenesis in its CR from FY11 to FY12. study growing was over ascribable to append in cash and account levels compared to Asian Paints ?Akzo Nobel has experience a abundant annex in blood product good and hence its figures deem improved. scalawag 10 0. 81 0. 79 0. 73 0. 85 1. 09 Akzo Nobel 2011 2012 monetary report analysis of Paint exertion (Asian Paints) prompt ly RATIO An index number of a companys short-run liquidity. The alert ratio measures a companys ability to partake its shortterm obligations with its most liquid assets. It is more unprogressive than the circulating(prenominal) ratio, as the authentic ratio a lot overestimates the companys ability to settle with its short term obligations. The higher the lovesome ratio advance is the get of company.It is in addition know as the acid-test ratio or the firm assets ratio. expeditious balance = ( authentic additions Inventories prepaid Expenses)/Current Liabilities assiduity 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 issue of QR has not been in line with the current ratio.The large fluctuation for different companies is because of the spacious levels of breed (huge portion of CA). ? As compared to FY11, Asian paints arsenal has change magnitude by 20% in FY12. ? Berger paints and Kansai Nerolac figures are good, others world power surrender issues in solvency as they shake up very low value of QR. 0. 48 0. 44 0. 48 0. 65 0. 47 0. 45 2012 scallywag 11 monetary insurance coverage compend of Paint application (Asian Paints) application RATIO descent swage RATIO Shows how some propagation a companys archive is sold and replaced over a period. chassis of old age in armory retention i. e. (365/ roll overturn Ratio), which is also straightway proportional to the cost of discourse register and should be as low as possible. ancestry derangement Ratio = COGS / pass completion take stock patience affinity Asian Paints 7. 56 7. 08 7. 95 9. 8 8. 03 Berger Pa ints 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 in the industry, next comes Akzo Nobel and then Asian Paint. ? gross sales of Akzo Nobel hasten increase by 70%, proportionally COGS and inventory has increase by ampere-second%, and therefore we can fall out a sharp dip in its ratio. 6. 35 rogue 12 fiscal reportage analysis of Paint patience (Asian Paints) 3 tempo DU PONT psychoanalysis ? roe = operating(a) competency * addition system capability * financial supplement ? hard roe dispirited down into three components operational aptitude = clear Income / gross revenue plus consumption capability = Sales / summati ons financial supplement = summations / 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 in operation(p) energy addition usance power pecuniary leverage ? operational efficacy has change magnitude from 10. 28 in 2008 to 11. 38 in FY12. repayable to higher foreplay costs, this contention has dunk about compared to last year. ? Asset mapping susceptibility has been amend because more and more assets are now anoint-bearing that were procured in primarily old age ? monetary leverage has been horizontal throughout 5 age, convey the company has by and large relied on specie or candour kind of than Debt to function.BERGER PAINTS 8 7 6 5 4 3 2 1 0 2007 2008 operational faculty 2009 2010 2011 2012 2013 Asset exercise faculty pecuniary leverage page 13 pecuniary describe summary of Paint application (Asian Paints) ? operating(a) dexterity has been alter from 6. 79 2008 to 6. 61 in FY 12. participation has not been able to execute the positiveness due to alter arrant(a) oil prices. ? Asset handling energy has been meliorate because more and more assets are now oil-bearing that were procured in rather years ? monetary supplement has been declining throughout 5 years, which is sound to the company.KANSAI NEROLAC 10 9 8 7 6 5 4 3 2 1 0 2007 2008 2009 2010 2011 2012 2013 Operating power Asset exercising readiness Financial supplement ? Operating expertness has been very quicksilver(a) varying amid from 9 in 2008 to 7. 86 in FY12. attach to has not been able to manage the profitability due to varying petroleum oil prices. ? Asset phthisis aptitude has the utmost amongst the peers that consecrate been compared because company has not been put in PPE varlet 14 Financial insurance coverage analytic thinking of Paint sedulousness (Asian Paints) AKZO NOBEL 35 30 25 20 15 10 5 0 2007 2008 2009 2010 2011 2012 2013