FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

CHAPTER 1

INTRODUCTION

INTRODUCTION

Finance helps Company to grow and develop during good and bad term as finance
acts as the life blood to the business as it is concerned with meeting the financial needs and
over all objectives of the company. Finance carries out activities such as proper planning,
controlling and utilizing the funds in the business. Finance mainly involves cash transactions
directly or indirectly.

The financial performance is very important for the stake holders, as it provides
insight data. The Ratios help an individual to understand the company’s performance with its
competitor’s performance.

During this period of internship, I got a real time experience which was completely
different when compared to the theoretical study. It was a wonderful part of study life to see
how every individual works in the organization in order to achieve the organization goals and
how to overcome from the problems faced within the company with the change in technology
based on the working condition in the organization.

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1.2 TOPIC CHOSEN FOR THE STUDY:

“Financial Performance Analysis at Bharat Electronics Ltd”

1.3 NEED FOR THE STUDY:

The purpose of Financial Performance Analysis is carried out in order to understand

the financial statement and to judge the profitability of the firm. Before taking the decision
the financial analyst analyses the financial statement with the help of various tools of analysis
in order to make the judgment.

1.4 OBJECTIVE OF THE STUDY:

 To understand budgetary statements by Bharat Electronics Limited.

 To contemplate those progress in assets and liabilities of the company
 To analyze those change in financial condition over the period of 5 years.
 To investigate the company’s profitability.
 To examine the financial wellbeing of the company using ratio analysis.

1.5 SCOPE OF THE STUDY:

The study enables the overall Financial analysis of Bharat Electronics Limited with
the help of Annual Report of 5 years from 2015-16 to 2019 -2020 the research serves to
analyze the financial execution of the company in terms of financial wellbeing.

1.6 RESEARCH METHODOLOGY

Research methodology is the systematic method of collecting the information based

on a particular topic, which will help to understand the problem with specific objective.

Sources of Data:

 Primary Data
 Secondary Data

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Primary Data: Under this Data the information is original in character. The primary data
under this research are collected with the help of face to face interaction with the
professionals, and direct observation.

Secondary Data: Under Secondary Data the information’s are readily available which are
not collected for the first time, the secondary data under this research are collected with the
help of internet, Annual Report of Bharat Electronics and magazines related to financial
Accounting.

1.7 LITERATURE REVIEW

T.S Reddy and Y. Hari Prasad Reddy

In Management Accounting has expressed that the statement reveals about the
ventures and is identified as Balance Sheet and the statement introducing the outcome is
identified as Profit and Loss Account.

Jae k. Shim & Joel G. Siegel,

Outlines the principle and Problems of Financial Accounting, has made clear that the
examination and elucidation of Financial Statements is an approach for persistent indication
of Financial Statement data so as to make future prediction of earnings, interest to be paid
and debt maturity of present and future years.

Susan Ward

in Financial Ratio Analysis for execution Check highlights that the financial analysis
practicing the ratio among primary value is to sustain the investors to improve high number
of companies’ financial statement.

MY Khan & P.K Jain

In Financial Management has cleared that financial statement bring a view of

financial area and undertakings of the company and hence many things can be taken into
consideration about the organization from financial statement as worthless performance
report and is beneficial to financial analysis.

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1.8 LIMITATIONS OF THE STUDY

1. The analysis and interpretation was done based on the internet sources and Annual
report.
2. Due to lockdown situation I was unable to carry out the project as expected by me.

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CHAPTER-2

INDUSTRIAL PROFILE

2.1 INTRODUCTION:

The Indian economy had seen an inversion from past quite some time Furthermore
need started picking up to ended up a standout among those few economies in the universe
for financial development possibility. Similarly to those economy overview the years
acquires out, the genuine horrible down home items, concerning illustration communicated
through the reconsidered technique to estimating national pay toward those Central Statistics
office (CSO), is relied upon to develop eventually by 8.1 furthermore 8.5% over 2019-20,
Similarly 7.4% during the previous year. That change in the gross domestic product figure
additionally matches for decay in global product cost. This needs a supportive effect looking
into expansion What's more monetary deficit. The being anticipated should decline as 3.9%
of GDP in the year 2019-20 starting with 4.1% in the past. Looking into India’s outer front,
there need likewise a few amazing upgrades as seen in surge in the country’s remote trade
reserves, Strength in the rupee-dollar return price

India’s security nature’s domain is characters by a complex transaction for territorial

furthermore worldwide imperative challenges. The size and key area of the particular nation
spot toward those focal point of the security element affected simultaneously eventually by
perusing those certain drives of the territorial furthermore worldwide connectivity on the
person side and also toward unfriendly results emerging from situations that cannot be
predicted, unsteadiness and measures the risk of security in parts of the quick enlarged
surrounding. Similarly as our nation looks for accomplish comparative national development
and improvement in home, India’s defiance also strategies and rules aim at giving a
undisturbed territory perusing to those total range from claiming the worldwide of standard
and non-standard safety tests faced eventually by nation. Equipped by the standard about
fabricating quality through those standards from maintaining building strength with the help
of the principles of strategic sovereignty and self-reliance, our nation looks for idea or ability
to seek after a valuable building arrangement with surroundings and other countries in
national and worldwide community to promote safety and dependability. The present defence
budget enters in the backdrop of the optimistic macroeconomic views few noticeable
upgrades previously in key indicators of the Indian economy. There is an expansion in

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defence budget from ₹ 2,29,000 Crores to ₹ 2,46,727 Crores which is an expansion of

7.74%constrant with past plan. The revenue budget has expanded to13.2% same time money
plan stayed unaltered towards ₹94,588 Crores. Similarly, as contrasted with reconsidered
money plan for 2019-20, there is an increase of 15.4%.The Capital budget, impart for
contracts officially marked (conferred liabilities) has a major share of the capital budget. This
provides a fine execution income flow to those undertakings generally constantly executed
eventually personated by BEL. However, this abandons less money plan for those fresh
undertakings. Army keeps on being most amazing stakeholder with an estimated allotment of
₹1,30,874 Crores. The Air Force goes an inaccessible second for allotment of ₹56,658
Crores, followed eventually by the Navy force (₹ 40,529 Crores), Defence innovation work
association and production line.

The legislature is giving excellent emphasis on “Make in India” activity and with a
goal for Defence industry. The FD in defence is expanded from 26% to 49% , it is anticipated
to show interest from foreign national defence organizations to provide technologies to Indian
industry. Also, there have been quite a few accentuations with respect to mankind resources
ability development, special universities to catering to the defence industry. This gives a
positive impact on the organization, as it provides greater deal for stress on the indigenous
improvement from claiming items. BEL generally attempted to do Indigenization from
claiming design and manufacture to decrease equipment costs and less dependent on the
remote provider to provide spare parts and different support exercises.

On the worldwide front, there is an expansion over defence investing by 1.7%, yet all
the investment in North America and Europe has come down. This makes Indian defence
business sector attractive to those organizations from North America and Europe. Those
effects from claiming these progressions around Indian defence business and on BEL
necessities on making seen in the close to future, as this could make all more chances for tie-
ups and getting worldwide results on Indian business sectors. Increased focus on the Indian
defence market also brings in more competition from Indian and worldwide Players and BEL
is readied on manage the competition and help those development focus.

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2.2 COMPANY PROFILE:

Company Name : Bharat Electronics Limited.

Place of Establishment : Bengaluru

Year of Establishment : 1954

Location of the registered office : Bengaluru

Industrial Products : Radars

Communication Transmitters

Electro-Optic Products.

Subsidiary Company : Bharat Electronics Optronic Devices Limited, Pune

Bharat Electronics Limited, Bengaluru

E-mail Address : [Link]

Identity Number of company : L32309KA1954GO1000787

Bharat Electronics Limited (BEL) was established at Bengaluru in 1954, by the

government of India under the ministry of defence. Bharat Electronics Limited is an elite
group of responsibility of public sector, and has been granted the status of Navarathna status
by the Government of India. Bharat Electronics locked in previously in design, fabricate &
supply of Strategic Electronics items fundamentally for the defence and non-defecnce
necessities.

Bharat Electronics is outsourcing different items and services in order to supply

defence forces such as Electronic segments & Sub-systems, Agreement Services etc., need
aid continuously procured from MSMEs. The organization has built system to channelize to
transfer from claiming waste produced throughout those fabricate from claiming items
alternatively supplied through sanctioned recyclers, waste metal, re-used oil, solvents also
copper bearing Etchants are send to authorize recycler for reusing and furthermore
improvement. Waste water is been recycled and been used for the production purpose.

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Bharat Electronics has successfully improved its contribution in the field of civilian
Electronics the most visible being the solar-powered LED-based traffic signals, GPS-based
fish finder, telemedicine system and motherboard. Outsourcing movement in the organization
is legislated towards well-established technique. Likewise Quality, Conveyance and Cost are
important.

BEL has wide network offices and service centers in places such as –

 Bengaluru (Karnataka) started in the year 1954

 Ghaziabad (Uttar Pradesh) started in the year 1974
 Panchkula (Haryana) started in the year 1985
 Kotdwara (Uttarakhand) started in the year 1986
 Pune (Maharashtra) started in the year 1979
 Navi Mumbai (Maharashtra) started in the year 1986
 Hyderabad (Telangana) started in the year 1986
 Machilipatnam (Andhra Pradesh) started in the year 1983
 Chennai (Tamil Nadu) started in the year 1985

As well as overseas offices in

 New York
 Singapore

2.3 VISION AND MISSION

VISION:

To be a best company in the world for professional hardware

MISSION:

Helps maintain friendly relationship with their clients with the help of quality, technology
and innovation in the zone of defence and professional hardware

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QUALITY POLICY:

Bharat Electronics has achieved by giving trust to the Quality, Technology and
Innovation. This emphasizes on controlling and observing of all discriminating operational
furthermore benefits of the business executions such as on time delivery, methodology cycle
time, Manufacturing Yield, measurable methodology control, consistence determination and
unwavering quality. All Units of the company are surroundings to administration framework
through ISO 14001affirmation.

Bharat Electronics organized a survey in order to identify the perception of the

customers on the quality of the products offered by the company with the help of through
outer officers and Indian Market Surveying department.

2.4 PRODUCTS
 Secure phone without camera for making secure calls and SMS as per the requirement
of Army
 Hand held Digital Compass for infantry soldier as it gives accurate target information.
 Under Vehicle Scanning System for recording the underside image of any four
wheeler

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2.5 AREAS OF OPERATION:

Overseas Offices in places such as:-

 Singapore
 New York

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2.6 INFRASTRUCTURE FACILITIES:

The organization has continuously improving the infrastructure by makeover by

evolving wants of the products and technology. Particular groups in the units examine those
innovation progressions that take place and recognize the new forms within in the world
market. This empowers the organization to keep up the foundation for global measures.

Bharat Electronics Limited has a good infrastructure facility with 700 acres of land in
Bengaluru. Being a public sector undertaking it has an excellent infrastructure and working
environment with new machineries based on the new technology which would make the
workers work easy.

The company provides Canteen facility, Baby crèche, transportation facility,

Quarter’s facilities, Co-operative societies, Medical facilities, water and electricity,
Environment Development, Special re-habitation and drug addicts, leave facilities, uniform
for all the workers to maintain equality, school facilities to the children’s of Employee, well
equipped indoor and outdoor stadium.

The company has 9,703 employees out of which 3,822 employees are hired on
contractual basis, and 1,997 permanent women employees and 234 permanent employees
with disabilities. The company has employees association which is been recognized by the
management.

Exceptional activities for Scheduled Castes and Scheduled Tribe workers and to
workers children’s with a perspective to support and also encourages financially to merit
children of SC/ST workers, Management has instituted a scholarship in the name of Late
Prime Minister Shri Jawaharlal Nehru to seek after expert courses also Diploma/ courses
including ITI confirmed courses.

An investigation facility Centre has been set off for the upliftment of the children of
Scheduled Castes and Scheduled Tribe employees and more exceptional activities is been
provided for workers with disabilities by providing appliances.

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2.7 COMPETATORS’ INFORMATION

BEL manufactures products for Defence as well as Civilian markets. some of

competitors of different products are as follows:

Defence

 Larsen & Toubro (L&T)

 TATA
 Mahindra & Mahindra

Set top boxes

 Bharti
 Pagarities
 LG
 Samsung

Electronic voting machine

 Electronic corporation of India (ECI)

Heavy Equipment’s

 Bharat Earth Movers Limited (BEML)

Solar

 Tata BP solar
 Bharat Heavy Electronicals Limited (BHEL)

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2.8 SWOT ANALYSIS:

The SWOT Analysis is the tool used to understand the strengths, weaknesses,
opportunities and treats of the company in order to make proper decisions.

Strengths:

 Great Image, beliefs and morals

 Solid multi layered in-house R&D bringing about innovation organization and new
product improvement.
 Dedications fill in power with useful framework and manufacturing facilities.
 Wide range of product with Defence and legislature agencies.
 Solid relationship with solid product support network.
 Dynamic development from household and outside country collaborators.
 Monetarily sound with constant benefit making.

Weaknesses:

 Gaps in few new innovation regions

 Hazard disinclined.

Opportunities:

 Developing resistance with security needs

 Counterbalance chances
 Developing chances for Maintenance, Repair, and furthermore upgrade projects for
resistance.
 Developing showcase for countries protection, smart city elements, solar power plant

Threats:

 Fast transformation in technology

 Challenge in sourcing couple of critical technologies.

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2.9 FUTURE GROWTH AND PROSPECTS

Government’s more stresses ahead on “Make in India” activity in Defence sector by

providing an incredible opportunity to the organization to intensify it indigenization attempts
and to upgrade circumstances in national Defence division.

supported by a sound request book and requests in pipeline, the organization is

focusing on those turnover for over ₹7,40,000 lakhs throughout 2019-20 segments similar to
Radar and Rocket systems, communication and organize driven systems, tank electronics,
gun upgrades & framework and Electronic warfare & Avionics systems frameworks keep
will remain to drive the organization’s development in the nearing 4 to 5 years. Limit
improvement in quality also make innovation on new test facilities help the organization to
accomplish seeking development. Sensing growth opportunity in the civil segment BEL is
seeking business in the field of country security, smart cards and smart city elements.
Defence keeps on being the main business and furthermore provides close to 80% from
revenues with civilian business providing the balance.

The Defence division seems to be profoundly constantly opened upon to private

division support with assessment of Defence acquisition system which brings about higher
intensity and quality of being productive through activities for the value added enhancement.
It is essential to remain abreast of change in technology and develop new products
consistently. The paramount activities arranged to execution for the future quite some time
are Akash Weapon system, Weapon placing Radar, correspondence tools, and so forth.

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2.10 FINANCIAL STATEMENTS:

Balance Sheet of Bharat Electronics on 31st March 2020 (Rs. Crores)

PARTICULARS YEAR

2020 2019
Sources Of Funds
Equity Share Capital 80.00 80.00
Reserves 7,805.03 6,937.24
Loans
Secured Loans 9.11 12.61
Current Liabilities
Provisions 776.68 599.49
Current Liabilities 6,528.89 6,897.94
Total 15199.71 14,527.28
Application Of funds
Net Block 771.11 650.94
Capital Work in Progress 139.78 196.86
Investment 19.12 11.98
Inventories 3,369.43 3,298.71
Sundry Debtors 3,786.14 4,128.54
Cash and Bank Balance 5,881.53 4,564.37
Total Current Assets 13,037.10 11,991.62
Loans and Advances 1,232.60 1,675.88
Total 15,199.71 14,527.28

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Profit And Loss Account of Bharat Electronics on 31st March 2020 (Rs. Crores)
PARTICULARS 31-03-2020 31-03-2019
Sales Turnover 6,861.68 6,275.52
Excise Duty 19.03 0.00
Net Sales 6,842.65 6,275.52
Other Income 477.95 428.47
Stock Adjustments -36.02 -47.33
Total Income 7,284.58 6,656.66
Expenditure
Raw Materials 3,744.53 3,583.56
Power & Fuel Cost 38.84 37.37
Employee Cost 1,263.45 1,030.43
Other Manufacturing Expenses 0.00 0.00
Selling and Admin Expenses 0.00 0.00
Miscellaneous Expenses 616.48 685.72
Preoperative Exp. Capitalized 0.00 0.00
Total Expenses 5,663.30 5,337.08
Operating Profit 1,143.33 891.11
PBDIT 1,621.28 1,319.58
Interest 1.38 3.40
PBDT 1,619.90 1,316.18
Depreciation 153.96 142.10
Other Written Off 0.00 0.00
Profit Before Tax 1,465.94 1,174.08
Extra-ordering items 0.75 0.65
PBT 1,466.69 1,174.73

Tax 299.45 243.12

Return Net Profit 1,167.24 931.62
Total Value Addition 1,918.77 1,753.51

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Preference Dividend 0.00 0.00

Equity Dividend 233.60 186.40
Corporate Dividend Tax 47.38 31.68
Share issued (lakhs) 800.00 800.00
Shares issued lakhs)
Earnings Per Share (₹) 145.91 116.45
Equity Dividend (%) 292.00 233.00
Book Value (₹) 985.63 877.15

CHAPTER-3
THEORETICAL BACKGROUND OF THE STUDY
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Finance:

Functions of finance:

1. Proper utilization and allocation of funds.

2. Proper financial decision.
3. Improving the profitability with the help of financial control.

FINANCIAL PERFORMANCE ANALYSIS

It is the process of assessing the relation between component parts of a financial

statement to get a superior seeing of a firm’s position and execution. The utilization of
financial analysis is to diagnose those financial statements in order to know the profitability
of the firms. A financial analyst mainly assumes the financial statements with the help of
different tools/devices of analysis before commenting upon the financial wellbeing or
shortcoming of the firm. The assumption and interpretation of financial statements is vital to
bring out those puzzle behind the financial statements. It helps to know the future earnings
and profitability and financial soundness of the organization.

Types of Financial Performance Analysis:

1. External Analysis: Under this type of analysis no accounting information is available

to the outsiders such as Government agencies, financial analysts, investors and they
are mainly dependent on public financial Statements.
2. Internal Analysis: Under this sort of analysis may be carried on to measure the
effectiveness of policies and decisions by those who have access to detailed financial
records of the firm.
3. Horizontal Analysis: It is mainly carried out to find out the trend ratios and
comparative financial [Link] is used at the time of making conclusions of the
evaluation that is been made for several years.
4. Vertical Analysis: It is carried out in order to understand the quantitative relation of
different financial items with the help of financial statement. E.g. Ratio analysis,
common size statement.

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5. Short-term Analysis: It is carried out in order to understand the short-term solvency

and liquidity of the company.
6. Long-term Analysis: It is mainly done to evaluate long-term solvency, liquidity,
profitability, financial health of the [Link] is carried out to determine whether the
earning capital will be enough to focus on return on investment for the further
development of the firm.

TOOLS AND METHODS FOR FINANCIAL PERFORMANCE ANALYSIS:

1. COMPARATIVE STATEMENTS:

Comparative Statements is the statement under which the financial statements of

different periods of time are taken into consideration in order to understand the financial
performance and to make further analysis.

Forms of Comparative Statements are:

a. Comparative Balance sheet:

Comparative Balance sheet is the financial statement that portraits the financial condition
of the organization upon the date of the statement. Balance sheet represents the assets owned
and claimed by the owners and liabilities in the manifestation from claiming loans.

b. Comparative Income Statement:

Comparative Income Statement represents the inflow and outflow of cash which will
help the management in making future forecasting. This statement is useful for short-term
plans and ascertains the availability of the cash to meet obligations of business

2. COMMON-SIZE STATEMENT:

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The Common Size Statements are also called as component percentage as every
single item are represented in percentages in order to assess the items related to the total
values. The different Assets are taken as 100 and various Assets are expressed as percentage
of Total, the different liabilities are taken as 100 and various liabilities are exhibit as
percentage of total.

3. TREND ANALYSIS:

The Trend Analysis is also called as Index analysis the trend analysis shows the
operational efficiency of the company and helps in decision making about the future
possibilities. It indicates the actual and prospective performance of the company.

4. RATIO ANALYSIS:-

Ratio Analysis is one of the strong tools of financial analysis with the help of ratios
financial statement is analyzed. Ratio is an arithmetical expression of two numbers.

CLASSIFICATION OF RATIOS:

1. Liquidity Ratios:-
Liquid ratio is the ratios which help in meeting the short term obligation. Liquidity ratios
are computed in order to make the judgement on the short term payment capacity in order
to meet the organizational objective. The different types of liquid ratios are:-

a. Current Ratio:-

Current ratio is also called as working capital ratio. It is the relationship between
current assets and current liabilities and is used for analyzing short-term liquidity of the
organization.

Current Asset includes short term Investments, Inventories, Sundry debtors, Work-in-process,
bills receivables.

Current liability includes Bills payable, sundry creditors, Dividend Payable, Income Tax
Payable, prepaid expenses, outstanding expenses.

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b. Quick Ratio :-

Quick Ratio are called as Acid Ratio or Liquid Ratio, Quick Ratio indicates the relation
between Liquid Asset and Liquid Liabilities. Inventories, prepaid expenses are not excluded
in Quick Assets as they are not easily converted. Marketable Securities, Bills Receivable,
investments(short term) are included in Quick Asset.

Liquid Assets includes Cash in hand, Cash at Bank, Sundry Debtors, Bills Receivable.

Current Liabilities includes Bank over Draft, Bills Payable, Dividend Payable, and Sundry
Creditors.

c. Absolute Ratio:

Absolute Ratio is also called as Cash Ratio, it is calculated with Current Ratio & Acid Test
Ratio in order to exclude even receivables from current assets to find out the absolute liquid
and 50% of norm is acceptable under this ratio. Absolute Ratio includes Cash and Bank
Balance, marketable securities.

2. Leverage Ratios:-

A leverage ratio is also called as solvency ratio, these ratio help in measuring the company’s
ability to meet the long term financial need. It shows the percentage of which the company is
leveraging itself with the help of borrowed money. The various types of leverage Ratios are:-

a. Debt-Equity Ratio:

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Debt-equity ratios are also called as external-internal equity ratio. Debt equity is the
relationship between external equity and internal equity. The external equity includes all the
liabilities of long term and short term to outsiders, debenture bonds, mortgages etc. the
Shareholders Funds involves Equity Share, Preference Share Capital, Revenue Reserves and
so on. The rule states that as High Debt-Equity Ratio shows the claim of outsider’s creditor,
the higher is the owners and low debt-equity ratio is considered as unsatisfactory for the
shareholders.

3. Profitability Ratios:-

Profitability Ratio measures the overall performance of company profitability is generally

calculated with respect to the sales and investments. The various types of profitability ratio
are:-

a. Gross Profit Ratio:

Gross Profit Ratio are called as Gross Margin Ratio. It shows the amount of products
sold by the company. It indicates the relation between Gross Profit and Net Sales.

b. Net Profit Ratio:

Net Profit Ratio is the relation between Net Profit after Tax and Net Sales. Net profit
shows the efficiency of Manufacturing and Sales, Administration and other various things in
the management.

4. Turnover Ratios:

Turnover ratios shows the way assets are turned to sales. It is useful in order to
measure the efficiency with which the resources are employed. It is also called as Activity
Ratios. Various sources of Turnover Ratios are:-

a. Working Capital Turnover Ratio:-

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Working Capital Turnover measures the efficiency of the working capital of the
organization here the working capital is directly related to sales. According to the rule higher
working capital indicates efficient usage of working capital and low working capital indicates
insufficient usage of working capital and if Working Capital is very high then it is not good
indication to the organization.

b. Fixed Asset Turnover Ratio:-

Fixed Asset Turnover helps in understanding how best the firm is utilizing its fixed
assets to generate reserves. This ratio indicates the productivity of fixed assets to generate
reserves. According to the rule if the company has high fixed assets then it indicates that the
company is efficiently managing its fixed assets.

c. Total Assets Turnover Ratio:-

Total Assets Turnover shows how efficiently the management is employing the assets.

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

CHAPTER 4
4.1 COMPARATIVE BALANCE SHEET OF BHARAT ELECTRONICS
IN THE YEAR 2016-2017
(Rs. Crores)

PARTICULARS YEAR CHANGES

2016 2017 Change in ₹ Change in %

Sources of Fund
Equity Share Capital 80.00 80.00 0.00 0.00
Reserves 4,905.71 5,542.21 636.5 12.97
Loans
Secured Loans 16.99 14.76 -2.23 -13.12
Current Liabilities
Provisions 573.60 588.72 15.12 2.63
Current Liabilities 7,585.33 8,632.67 1,047 13.80
Total 13,161.63 14,858.36 1,696.73 12.89

Application Of funds
Net Block 483.71 510.16 26.45 5.46
Capital Work in Progress 57.68 113.56 55.88 96.87
Investment 11.98 11.98 0.00 0.00
Inventories 2,350.14 2,673.80 323.66 13.77
Sundry Debtors 2,896.58 2,686.95 -209.63 -7.23
Cash and Bank Balance 6,519.36 6,772.52 253.16 3.88
Total Current Assets 11,766.08 12,133.27 367.19 3.120
Loans and Advances 842.18 2,089.38 1,247.2 148.09
Total 13,161.63 14,858.36 1,696.73 12.89

Department of Post-Graduate Studies and Research In Commerce,

Gulbarga University, Kalaburagi Page 27
 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

INTERPRETATION:

 Reserves have expanded to ₹ 636.5 crores which is 12.97%.

 Secured Loan were decreased to ₹ 2.23crores i.e13.12% and unsecured loan remains
0.00.
 Current Liabilities were increased to 1,047 i.e. 13.80% and provisions were increased
to ₹ 15.12 crores i.e. 2.63%.
 Fixed Assets were increased to ₹ 26.45 crores i.e. 5.46%.
 Capital Work in Progress were increased to ₹ 55.88 crores i.e. 96.87%.
 Investment remains constant.
 Inventories were increased to ₹ 323.66 crore i.e. 13.77%.
 Sundry Debtors were decreased to ₹ 209.63 crores i.e. 7.23%.
 Cash and Bank Balance were increased to ₹ 253.16 crores i.e. 3.88%.
 Total Current Assets were increased to ₹ 367.19 crores i.e. 3.120%.
 Loans and Advances increased to ₹ 1,247.2 i.e. 148.09%.
 Overall the financial position is good and satisfied.

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.2 COMPARATIVE BALANCE SHEET OF BHARAT ELECTRONICS IN THE

YEAR 2017-2018

(Rs. Crores)
PARTICULARS YEAR CHANGES

2017 2018 Change in ₹ Change in %

Sources Of Fund
Equity Share Capital 80.00 80.00 0.00 0.00
Reserves 5,542.21 6,223.69 681.48 12.29
Loans
Secured Loans 14.76 19.17 4.41 29.87
Current Liabilities
Provisions 588.72 716.17 127.45 21.64
Current Liabilities 8,632.67 7,407.10 -7,225.57 -83.70
Total 14,858.36 14,446.13 -412.23 -2.77
Application Of funds
Net Block 510.16 575.45 65.29 12.79
Capital Work in Progress 113.56 161.42 47.86 42.14
Investment 11.98 11.98 0.00 0.00
Inventories 2,673.80 3,191.29 517.49 19.35
Sundry Debtors 2,686.95 3,334.67 647.72 24.10
Cash and Bank Balance 6,772.52 5,302.49 -1470.03 -21.70
Total Current Assets 12,133.27 11,828.45 -304.82 -2.51
Loans and Advances 2,089.38 1,868.83 -220.55 10.55
Total 14,858.36 14,446.13 -412.23 -2.77

INTERPRETATION:

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

 Reserves have expanded to ₹ 681.48 crores which is 12.29%.

 Secured Loan were decreased to ₹ 4.41 crores i.e. 29.87% and unsecured loan remains
0.00.
 Current Liabilities were decreased to₹ 7,225.57 crore i.e. 83.70% and provisions were
increased to ₹ 127.45 crores i.e. 21.64%.
 Fixed Assets were increased to ₹ 65.29 crores i.e. 12.79%.
 Capital Work in Progress were increased to ₹ 47.86 crores i.e. 42.14%.
 Investment remains constant.
 Inventories were increased to ₹ 517.49 crore i.e. 19.35%.
 Sundry Debtors were increased to ₹ 647.72 crores i.e. 24.10%.
 Cash and Bank Balance were decreased to ₹ 1470.03 crores i.e. 21.70%.
 Total Current Assets were decreased to ₹ 304.82 crores i.e. 2.51%.
 Loans and Advances decreased to ₹ 220.55 i.e. 10.55%.
 Overall the financial position is not satisfied.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.3 COMPARATIVE BALANCE SHEET OF BHARAT ELECTRONICS IN THE

YEAR 2018-2019

(Rs. Crores)
PARTICULARS YEAR CHANGES

2018 2019 Change in ₹ Change in

%
Sources Of Fund
Equity Share Capital 80.00 80.00 0.00 0.00
Reserves 6,223.69 6,937.24 713.55 11.46
Loans
Secured Loans 19.17 12.61 -6.56 -34.22
Current Liabilities
Provisions 716.17 599.49 -116.68 -16.29
Current Liabilities 7,407.10 6,897.94 -509.16 -6.87
Total 14,446.13 14,527.28 81.15 0.56
Application Of funds
Net Block 575.45 650.94 75.49 13.11
Capital Work in Progress 161.42 196.86 35.44 21.95
Investment 11.98 11.98 0.00 0.00
Inventories 3,191.29 3,298.71 107.42 3.36
Sundry Debtors 3,334.67 4,128.54 793.87 23.80
Cash and Bank Balance 5,302.49 4,564.37 -738.12 -13.92
Total Current Assets 11,828.45 11,991.62 163.17 1.37
Loans and Advances 1,868.83 1,675.88 -192.95 10.32
Total 14,446.13 14,527.28 81.15 0.56

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

INTERPRETATION

 Reserves have expanded to ₹ 713.55 crores which is 11.46%.

 Secured Loan were decreased to ₹ 6.56 crores i.e. 34.22% and unsecured loan remains
0.00.
 Current Liabilities were decreased to₹ 509.16 crore i.e. 6.87% and provisions were
decreased to ₹ 116.68 crores i.e. 16.29%.
 Fixed Assets were increased to ₹ 75.49 crores i.e. 13.11%.
 Capital Work in Progress were increased to ₹ 35.44 crores i.e. 21.95%.
 Investment remains constant.
 Inventories were increased to ₹ 107.42 crore i.e. 3.36%.
 Sundry Debtors were increased to ₹ 793.87 crores i.e. 23.80%.
 Cash and Bank Balance were decreased to ₹ 738.12 crores i.e. 13.92%.
 Total Current Assets were increased to ₹ 163.17 crores i.e. 1.37%.
 Loans and Advances decreased to ₹ 192.95 crores i.e. 10.32%.
 Overall the financial position is not satisfied.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.4 COMPARATIVE BALANCE SHEET OF BHARAT ELECTRONICS IN THE

YEAR 2019-2020

(Rs. Crores)
PARTICULARS YEAR CHANGES

2019 2020 Change in ₹ Change in %

Sources Of Fund
Equity Share Capital 80.00 80.00 0.00 0.00
Reserves 6,937.24 7,805.03 867.79 12.50
Loans
Secured Loans 12.61 9.11 -3.5 -27.75
Current Liabilities
Provisions 599.49 776.68 177.19 0.29
Current Liabilities 6,897.94 6,528.89 -369.05 -5.35
Total 14,527.28 15199.71 672.43 4.62
Application Of funds
Net Block 650.94 771.11 120.17 18.46
Capital Work in Progress 196.86 139.78 -57.08 -28.99
Investment 11.98 19.12 7.14 59.59
Inventories 3,298.71 3,369.43 70.72 2.14
Sundry Debtors 4,128.54 3,786.14 -342.4 -8.29
Cash and Bank Balance 4,564.37 5,881.53 1,317.16 28.85
Total Current Assets 11,991.62 13,037.10 1,045.48 8.71
Loans and Advances 1,675.88 1,232.60 -443.28 -26.45
Total 14,527.28 15,199.71 672.43 4.62

INTERPRETATION

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

 Reserves have expanded to₹ 867.79 crores which is 12.50%.

 Secured Loan were decreased to ₹ 3.5 crores i.e. 27.75% and unsecured loan remains
0.00.
 Current Liabilities were decreased to₹ 369.05 crore i.e. 5.35% and provisions were
increased to ₹ 177.19 crores i.e. 0.29%.
 Fixed Assets were increased to ₹ 120.17 crores i.e. 18.46%.
 Capital Work in Progress were decreased to ₹ 57.08 crores i.e. 28.99%.
 Investment increases to ₹ 7.14 crores I.e. 59.59
 Inventories were increased to ₹ 70.72 crores i.e. 2.14%.
 Sundry Debtors were decreases to ₹ 342.4 crores i.e. 8.29%.
 Cash and Bank Balance were increased to ₹ 1,317.16 crores i.e. 28.85%.
 Total Current Assets were increased to ₹ 1,045.48 crores i.e. 8.71%.
 Loans and Advances decreased to ₹ 443.28 i.e. 26.45%.
 Overall the financial position is satisfied.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.5 Common Size Balance Sheet of Bharat Electronics pertaining to the year 2016-2017

(Rs. Crores)
PARTICULARS 2016 PERCENTAGE 2017 PERCENTAGE
CHANGE CHANGE
Sources Of Fund
Equity Share Capital 80.00 0.6078 80.00 0.5384
Reserves 4,905.71 37.2728 5,542.21 37.3002
Loans
Secured Loans 16.99 0.1290 14.76 0.0993
Current Liabilities
provisions 573.60 4.3581 588.72 3.9622
Current Liabilities 7,585.33 57.6321 8,632.67 58.0997
Total 13,161.63 100 14,858.36 100
Application Of funds
Net Block 483.71 3.6751 510.16 3.4334
Capital Work in 57.68 0.4382 113.56 0.7642
Progress
Investment 11.98 0.0910 11.98 0.0806
Current Assets
Inventories 2,350.14 17.8559 2,673.80 17.9952
Sundry Debtors 2,896.58 22.0077 2,686.95 18.0837
Cash and Bank Balance 6,519.36 49.5330 6,772.52 45.5805
Loans and Advances 842.18 6.3987 2,089.38 14.0619
Total 13,161.63 100 14,858.36 100

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

INTERPRETATION

 Equity Share Capital is 0.60% in the year 2016 out of total liabilities and reduced to
0.53% during 2017.
 Reserves were 37.27% in the year 2016 out of total liability and increased to 37.30%
during 2017.
 Secured Loans is 0.12% in 2016 out of the total liabilities which decreased to 0.09%
in the year 2017
 Current liabilities increased from 57.63% to 58.09% out of the total liabilities from
2016 to 2017
 Fixed Assets (Net Block) were 3.67% in the year 2016 out of total liabilities which
decreased to 3.43% in the year 2017.
 Investment was 0.09% in the year 2016 out of the total liabilities decreased to 0.08%
in the year 2017.
 Inventories were 17.85% in the year 2016 out of the total liabilities increased to
17.99% during 2017.
 Sundry Debtors is 22.00% for the year 2016 out of the total liabilities decreased to
18.08% in the year 2017.
 Cash and Bank Balance were 49.53% out of the total liabilities decreased to 45.58%
in the year 2017
 Loans and Advances were 6.39% out of the total liabilities increased to 14.06%.

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.6 Common Size Balance Sheet of Bharat Electronics pertaining to the year 2017-18

(Rs. Crores)
PARTICULARS 2017 PERCENTAGE 2018 PERCENTAGE
CHANGE CHANGE
Sources Of Fund
Equity Share Capital 80.00 0.5384 80.00 0.5537
Reserves 5,542.21 37.3002 6,223.69 43.0820
Loans
Secured Loans 14.76 0.0993 19.17 0.1327
Current Liabilities
provisions 588.72 3.9622 716.17 4.9575
Current Liabilities 8,632.67 58.0997 7,407.10 51.2739
Total 14,858.36 100 14,446.13 100
Application Of funds
Net Block 510.16 3.4334 575.45 3.9834
Capital Work in Progress 113.56 0.7642 161.42 1.1173
Investment 11.98 0.0806 11.98 0.0829
Current Assets
Inventories 2,673.80 17.9952 3,191.29 22.0909
Sundry Debtors 2,686.95 18.0837 3,334.67 23.0834
Cash and Bank Balance 6,772.52 45.5805 5,302.49 36.7052
Loans and Advances 2,089.38 14.0619 1,868.83 12.9365
Total 14,858.36 100 14,446.13 100

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

INTERPRETATION

 Equity share capital was 0.53% in the year 2017 out of total liabilities and increased
to 0.55% in the year 2018.
 Reserves were 37.30% in the year 2017 out of total liability and increased to 43.08%
during 2018.
 Secured Loans is 0.09% in 2017 out of the total liabilities which increased to 0.13%
in the year 2018.
 Current liabilities decreased from 58.09% to 51.27% out of the total liabilities from
2017 to 2018.
 Fixed Assets (Net Block) were 3.43% in the year 2017 out of total liabilities which
increased to 3.98% in the year 2018.
 Investment was 0.080% in the year 2017 out of the total liabilities increased to
0.082% during 2018.
 Inventories were 17.99% in the year 2017 out of the total liabilities increased to
22.09% during 2018.
 Sundry Debtors is 18.08% for the year 2017 out of the total liabilities increased to
23.08% in the year 2018.
 Cash and Bank Balance were 44.58% in the year 2017 out of the total liabilities
decreased to 36.70% in the year 2018.
 Loans and Advances were 14.06% in the year 2017 out of the total liabilities
decreased to 12.93%.

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.7 Common Size Balance Sheet of Bharat Electronics pertaining to the year 2018-19

(Rs. Crores)
PARTICULARS 2018 PERCENTAGE 2019 PERCENTAGE
CHANGE CHANGE
Sources Of Fund
Equity Share Capital 80.00 0.5537 80.00 0.5506
Reserves 6,223.69 43.0820 6,937.24 47.7531
Loans
Secured Loans 19.17 0.1327 12.61 0.0868
Current Liabilities
provisions 716.17 4.9575 599.49 4.1266
Current Liabilities 7,407.10 51.2739 6,897.94 47.4826
Total 14,446.13 100 14,527.28 100
Application Of funds
Net Block 575.45 3.9834 650.94 4.4808
Capital Work in Progress 161.42 1.1173 196.86 1.3551
Investment 11.98 0.0829 11.98 0.0824
Current Assets
Inventories 3,191.29 22.0909 3,298.71 22.7070
Sundry Debtors 3,334.67 23.0834 4,128.54 28.4192
Cash and Bank Balance 5,302.49 36.7052 4,564.37 31.4193
Loans and Advances 1,868.83 12.9365 1,675.88 11.5360
Total 14,446.13 100 14,527.28 100

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

INTERPRETATION

 Equity share capital was 0.553% in the year 2018 out of total liabilities and decreased
to 0.550% in the year 2019.
 Reserves were 43.08% in the year 2018 out of total liability and increased to 47.75%
during the year 2019.
 Secured Loans is 0.13% for the year 2018 out of the total liabilities which decreased
to 0.08% in the year 2019.
 Current liabilities decreased from 51.27% to 47.48% out of the total liabilities from
2018 to 2019.
 Fixed Assets (Net Block) were 3.98% in the year 2018 out of total liabilities which
increased to 4.48% in the year 2019.
 Investment was 0.0829% in the year 2018 out of the total liabilities decreased to
0.0824% in the year 2019.
 Inventories were 22.09% in the year 2018 out of the total liabilities increased to
22.70% during the year 2019.
 Sundry Debtors is 23.08% during the year 2018 out of the total liabilities increased to
28.41% in the year 2019.
 Cash and Bank Balance were 36.70% in the year 2018 out of the total liabilities
decreased to 31.41% in the year 2019.
 Loans and Advances were 12.93% in the year 2018 out of the total liabilities
decreased to 11.53% in the year 2019.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.8 Common Size Balance Sheet of Bharat Electronics pertaining to the year 2019-2020

(Rs. Crores)

PARTICULARS 2019 PERCENTAGE 2020 PERCENTAGE

CHANGE CHANGE
Sources Of Funds
Equity Share Capital 80.00 0.5506 80.00 0.5263
Reserves 6,937.24 47.7531 7,805.03 51.3498
Loans
Secured Loans 12.61 0.0868 9.11 0.0599
Current Liabilities
provisions 599.49 4.1266 776.68 5.1098
Current Liabilities 6,897.94 47.4826 6,528.89 42.9540
Total 14,527.28 100 15199.71 100
Application Of funds
Net Block 650.94 4.4808 771.11 5.0731
Capital Work in Progress 196.86 1.3551 139.78 0.9196
Investment 11.98 0.0824 19.12 0.1257
Current Assets
Inventories 3,298.71 22.7070 3,369.43 22.1677
Sundry Debtors 4,128.54 28.4192 3,786.14 24.9092
Cash and Bank Balance 4,564.37 31.4193 5,881.53 38.6950
Loans and Advances 1,675.88 11.5360 1,232.60 8.1093
Total 14,527.28 100 15,199.71 100

Department of Post-Graduate Studies and Research In Commerce,

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

INTERPRETATION

 Equity share capital was 0.55% in the year 2019 out of total liabilities and decreased
to 0.52% in the year 2020.
 Reserves were 47.75% in the year 2019 out of total liability and increased to 51.34%
during the year 2020.
 Secured Loans is 0.08% during the year 2019 out of the total liabilities which
decreased to 0.05% in the year 2020.
 Current liabilities decreased from 47.48% to 42.95% out of the total liabilities from
2019 to 2020.
 Fixed Assets (Net Block) were 4.48% in the year 2019 out of total liabilities which
increased to 5.07% in the year 2020.
 Investment was 0.08% in the year 2019 out of the total liabilities increased to 0.12%
in the year 2020.
 Inventories were 22.70% in the year 2019 out of the total liabilities decreased to
22.16% during the year 2020.
 Sundry Debtors is 28.41% during the year 2019 out of the total liabilities decreased to
24.90% in the year 2020
 Cash and Bank Balance were 31.41% in the year 2019 out of the total liabilities
increased to 38.69% in the year 2020.
 Loans and Advances were 11.53% in the year 2019 out of the total liabilities
decreased to 8.10% in the year 2020.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

TABLE-1

4.9 TABLE SHOWING TREND PERCENTAGE OF SHARE CAPITAL

YEAR AMOUNT
(IN CRORES) TREND %
2016 80.00 100.00
2017 80.00 100.00
2018 80.00 100.00
2019 80.00 100.00
2020 80.00 100.00

100 100
100 100 100 100
90 80 80 80
80 80 80
70
60
50
40 Amount
Trend
30
20
10
0
2016
2017
2018
2019
2020

Trend percentages of share capital

 Share capital remains 80 crores for all the above years.

 Share capital remains constant from 2015 to 2020.
 The overall trend of share capital is satisfied.

TABLE-2

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.10 TABLE SHOWING TREND PERCENTAGE OF RESERVES

YEAR AMOUNT
(IN CRORES) TREND %
2016 4,905.71 100
2017 5,542.21 112.97
2018 6,223.69 126.86
2019 6,937.24 141.40
2020 7,805.03 159.08

7,805.03
8,000.00
6,937.24
7,000.00 6,223.69
6,000.00 5,542.21
4,905.71
5,000.00

4,000.00
AMOUNT (IN CRORES)
3,000.00 AMOUNT TREND %

2,000.00

1,000.00 100 112.97 126.86 141.4 159.08

0.00
2016 2017 2018 2019 2020

Trend percentage of Reserves:-

 Reserves shows an increasing trend from 2016-20
 An increase in Reserves indicates the profitability of the firm.
 The overall trend is satisfactory.

TABLE-3

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

4.11 TABLE SHOWING TREND PERCENTAGE OF INVESTMENTS

YEAR AMOUNT
(IN CRORES) TREND %

2016 11.98 100.00

2017 11.98 100.00

2018 11.98 100.00

2019 11.98 100.00

2020 19.12 159.59

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

159.59
160

140

120
100 100 100 100
100

80
AMOUNT (IN CRORES)
60 TREND %

40
19.12
11.98 11.98 11.98 11.98
20

0
2016 2017 2018 2019 2020

Trend percentage of Investments:-

 An investment shows an increasing trend from 2016-2020.

 The overall trend of investment is satisfactory.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

RATIO ANALYSIS

TABLE-4

4.12 TABLE SHOWING CURRENT RATIO

Current Ratio = Current Assets ÷ Current Liabilities

Current Ratio of Bharat Electronics: (Rs. Crores)

Year Current Assets ÷ Current Liabilities = Current

Ratio

2015-2016 11,766.08 ÷ 7,585.33 = 1.55

2016-2017 12,133.27 ÷ 8,632.67 = 1.40

2017-2018 11,828.45 ÷ 7,407.10 = 1.59

2018-2019 11,991.62 ÷ 6,897.94 = 1.73

2019-2020 13,037.10 ÷ 6,528.89 = 1.99

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

Current Ratio
1.99
2 1.73
1.8 1.55 1.59
1.6 1.4
1.4
1.2 Current Ratio
1
0.8
0.6
0.4
0.2
0
2015- 2016- 2017- 2018- 2019-
2016 2017 2018 2019 2020

Interpretation of Current Ratio of Bharat Electronics:-

According to the rule of Current Ratio the Current Assets should be double the current
liabilities in the form of 2:1. The above chart shows the Current Ratio during the year 2015-
16 was 1.55 and a gradual fall to 1.40 and in the year 2016-17 there is a drastic growth from
the year 2017-18till 2019-20(Current Year) i.e., from 1.59 to 1.73 and then to 1.99 and hence
it shows that the expansion of Current Ratio indicates that development of the Liquidity of
the company and thus it is highly satisfactory.

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 FINANCIAL PERFORMANCE ANALYSIS AT BHARAT ELECTRONICS LIMITED

TABLE-5

4.13 TABLE SHOWING QUICK OR ACID OR LIQUID RATIO

Quick Ratio = Liquid Asset ÷ Current Liabilities

Quick Ratio of Bharat Electronics :- (Rs. Crores)

Years Liquid Assets ÷ Current Liabilities = Quick Ratio

2015-2016 9,415.94 ÷ 7,585.33 = 1.24

2016-2017 9,459.47 ÷ 8,632.67 = 1.095

2017-2018 8,637.16 ÷ 7,407.10 = 1.166

2018-2019 8,692.91 ÷ 6,897.94 = 1.260

2019-2020 9,667.67 ÷ 6,528.89 = 1.480

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Quick Ratio
1.6 1.48

1.4 1.24 1.26

1.166
1.095
1.2
1 Quick Ratio
0.8
0.6
0.4
0.2
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Interpretation of Quick Ratio of Bharat Electronics:-

According to the rule of Quick Ratio the Quick Assets should be equal to the Current
Liabilities i.e. in the form of 1:1. The above chart shows that the company has the capacity to
meet the short term needs hence it is considared as satisfactory.

TABLE-6
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4.14 TABLE SHOWING ABSOLUTE RATIO

Absolute Ratio = Cash ÷ Current Liabilities

Absolute Ratio of Bharat Electronics:- (Rs. Crores)

Year Cash ÷ Current Liabilities = Absolute Ratio

2015-2016 6,519.36 ÷ 7,585.33 = 0.85

2016-2017 6,772.52 ÷ 8,632.67 = 0.78

2017-2018 5,302.49 ÷ 7,407.10 = 0.71

2018-2019 4,564.37 ÷ 6,897.94 = 0.66

2019-2020 5,881.53 ÷ 6,528.89 = 0.90

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Absolute Ratio
0.9
0.85
0.9
0.78
0.8 0.71
0.66
0.7
0.6
Absolute Ratio
0.5
0.4
0.3
0.2
0.1
0
2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Interpretation of Absolute Ratio of Bharat Electronics:-

According to the rule the acceptance standard is 50% or 0.5. The above chart shows
there is slightly high whereas the acceptable standard is 50% or 0.5. in all, the company has
adequate worth of current liabilities as all the creditors are not expected to demand cash at the
same [Link] above chart shows that the company from the year 2015-16 the Absolute Ratio
has increased from 0.85 to 0.90 in the year 2019-20 which shows that the increase in the
Absolute Ratio is satisfactory.

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TABLE-7

4.15 TABLE SHOWING DEBT EQUITY RATIO

Debt Equity Ratio = Total Long Term Debt ÷ Shareholders Fund

Dedt Equity Ratio of Bharat Electronics:-

Year Total Long Term Debt ÷ Shareholders Fund = Debt Equity Ratio
2015-16 16.99 ÷ 80.00 = 0.21

2016-17 14.76 ÷ 80.00 = 0.18

2017-18 19.17 ÷ 80.00 = 0.23

2018-19 12.61 ÷ 80.00 = 0.15

2019-20 9.11 ÷ 80.00 = 0.11

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Debt Equity Ratio

0.25 0.23
0.21

0.2 0.18

0.15
0.15 Debt Equity Ratio
0.11

0.1

0.05

0
2015-16 2016-17 2017-18 2018-19 2019-20

Interpretation of Debt Equity Ratio of Bharat Electronics:-

According to the rule increase in Debt Equity Ratio shows if claim of outsiders creditor
increase when compared to owners and lower Debt Equity indicates as unsatisfactory. The
above chart shows that the Debt Equity Ratio is fluctuating hence it is unsatisfactory.

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TABLE-8

4.16 TABLE SHOWING NET PROFIT RATIO

Net Profit Ratio = Net Profit After Tax ÷ Net Sales * 100

Net Profit Ratio of BEL Company:

Years Net Profit After Tax ÷ Net Sales * 100 = Net Profit Ratio

2015-16 861.47 ÷ 5,643.04 * 100 = 15.26

2016-17 829.90 ÷ 5,821.27 * 100 = 14.25

2017-18 889.83 ÷ 6,103.82 * 100 = 14.57

2018-19 931.62 ÷ 6,275.52 * 100 = 14.84

2019-20 1,167.24 ÷ 6,861.68 * 100 = 17.01

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Net Profit Ratio

17.5 17.01
17
16.5
16
15.26
15.5 Net Profit Ratio
14.84
15 14.57
14.25
14.5
14
13.5
13
12.5
2015-16 2016-17 2017-18 2018-19 2019-20

Interpretation of Net Profit Ratio of Bharat Electronics:-

The Above chart of Net Profit Ratios shows that the Net Profit Ratio in the year 2015-
16 was 15.26 and then there was a fall in Net Profit Ratio in the year 2016-17 to 14.25 and
slowly the Net Profit increased to 14.57 in the year 2017-18 till 2019-20 to 17.01 it shows
that the Net Profit Ratio is satisfactory as ther is no specific norm in Net Profit Ratio.

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TABLE-9

4.17 TABLE SHOWING GROSS PROFIT RATIO

Gross Profit Ratio = Gross Profit ÷ Net Sales * 100

Gross Profit Ratio of Bharat Electronics:-

Years Gross Profit ÷ Net Sales * 100 = Gross Profit Ratio

2015-16 1263.83 ÷ 5,585.09 * 100 = 22.62

2016-17 1200.1 ÷ 5,767.64 * 100 = 20.80

2017-18 1252.46 ÷ 6,103.82 * 100 = 20.51

2018-19 1319.58 ÷ 6,275.52 * 100 = 21.02

2019-20 1621.28 ÷ 6,842.65 * 100 = 23.69

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Gross Profit Ratio

23.69
24

23 22.62

22
21.02 Gross Profit Ratio
20.8
21 20.51

20

19

18
2015-16 2016-17 2017-18 2018-19 2019-20

Interpretation of Return on Capital Employed at Bharat Electronics:-

According to the rule if the Gross Profit is high it indicates that the products sold by
the company is making better profit like wise if the Gross Profit is low it indicates that the
product sold by the company is not making sufficient profit. In the above chart it shows the
Gross Profit for the year 2015-16 was 22.62 and gradually the gross profit reduced to 20.80
on the year 2016-17 and 2017-2018 the gross profit reduce to 20.51in the year 2018-19 the
gross profit reduced to 21.02 and in the year 2019-20 the gross profit increased to 23.69
hence it shows that the increase in Gross Profit is satisfactory.

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TABLE-10

4.18 TABLE SHOWING WORKING CAPITAL TURNOVER RATIO

Working Capital Turnover Ratio = Sales ÷ Working Capital

Years Sales ÷ Working Capital = Working Capital Turnover Ratio

2015-16 5,643.04 ÷ 4,180.75 = 1.34

2016-17 5,821.27 ÷ 3,500.6 = 1.66

2017-18 6,103.82 ÷ 4,421.35 = 1.38

2018-19 6,275.52 ÷ 5,093.68 = 1.23

2019-20 6,861.68 ÷ 6,508.21 = 1.05

Working Capital Turnover Ratio of Bharat Electronics:- (Rs. Crores)

Working Capital is calculated using the formula:-

Current Assets – Current Liabilities

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Turnover Ratio
1.8 1.66
1.6 1.38
1.34
1.4 1.23
1.2 1.05
Turnover Ratio
1
0.8
0.6
0.4
0.2
0
2015-16 2016-17 2017-18 2018-19 2019-20

Interpretation of Working Capital Turnover Ratio of Bharat Electronics:-

According to the rule higher Working Capital indicates low investment and high
profit. In the above chart it shows that Working Capital Turnover is fluctuating from the year
2016-20 which shows the fall in Working Capital Turnover which indicates that the company
has high investment and minimum profit in the year 2020.

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TABLE-11

4.19 TABLE SHOWING FIXED ASSET TURNOVER RATIO

Fixed Assets Turnover Ratio = Net Sales ÷ Fixed Assets

Fixed Assets Turnover Ratio of Bharat Electronics:- (Rs. Crores)

Years Net Sales ÷ Fixed Assets = Fixed Assets Turnover Ratio

2015-16 5,585.09 ÷ 483.71 = 11.54

2016-17 5,767.64 ÷ 510.16 = 11.30

2017-18 6,103.82 ÷ 575.45 = 10.60

2018-19 6,275.52 ÷ 650.94 = 9.64

2019-20 6,842.65 ÷ 771.11 = 8.87

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Fixed Assets Turnover Ratio

11.54 11.3
12
10.6
9.64
10 8.87

8
Fixed Assets Turnover Ratio
6

0
2015-16 2016-17 2017-18 2018-19 2019-20

Interpretation of Fixed Assets Turnover Ratio of Bharat Electronics:-

The above chart shows the fall in Fixed Asset Turnover Ratio from the year 2016-20 which
indicates that the sale is comparitively less hence it is highly unsatisfactory.

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TABLE-12

4.20 TABLE SHOWING TOTAL ASSET TURNOVER RATIO

Total Asset Turnover Ratio = Net Sales ÷ Total Assets

Total Asset Turnover Ratio of Bharat Electronics:- (Rs. Crores)

Years Net Sales ÷ Total Assets = Total Assets Turnover Ratio

2015-16 5,585.09 ÷ 7,894.14 = 0.70

2016-17 5,767.64 ÷ 7,029.85 = 0.82

2017-18 6,103.82 ÷ 6,322.86 = 0.96

2018-19 6,275.52 ÷ 5,636.96 = 1.11

2019-20 6,842.65 ÷ 5,002.70 = 1.36

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Total Assets Turnover Ratio

1.36
1.4

1.2 1.11
0.96
1
0.82
0.8 0.7 Total Assets Turnover Ratio

0.6

0.4

0.2

0
2015-16 2016-17 2017-18 2018-19 2019-20

Interpretation of Total Assets Turnover Ratio of Bharat Electronics:-

The Total Assets Turnver portraits efficiency of management in employing the assets.
Above chart shows that there is a constant increase in the Total Asset Turnover Ratio which
is highly satisfactory.

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CHAPTER-5

FINDINGS

1. The study shows that the trend amount of reserves is high in the year 2020
2. The trend percentage of investments in the year 2020 is high.
3. The Current Ratio, Quick Ratio and Absolute ratio has constant variation and has
achieved the highest ratio in the year 2020
4. The above study shows that the Debt-Equity Ratio has a constant variation in Debt-equity
Ratio and the company has got the highest Debt-Equity Ratio in the year 2017-18.
5. The Net Profit Ratio of Bharat Electronics Limited has increased from 15.26 to 17.01 in
the year 2019-20.
6. There is fluctuation in Gross Profit Ratio and has highest Gross Profit Ratio in the year
2019-20.
7. Bharat Electronics Limited has highest Fixed Turnover Ratio in the year 2015-16
8. The company has achieved the highest Total Asset Turnover Ratio in the year 2019-20.

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SUGGESTIONS

The Fixed Asset Turnover shows a fall in the Asset Turnover and has to be improved
in order to increase the sales.

The study shows increase in the value of Gross Profit which is satisfactory and has to
be improved further in order to make better profit.

The Total Asset Turnover Ratio shows the increase in the efficiency of the
management in employing which is a good sign and must be improved further.

The Suggestions help the organization to make the Decisions related to the financial
performance and helps the researcher to carry out the further research with respect to
financial performance.

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CONCLUSION

The Financial Perforance at Bharat Electronics Limited for the 5 years from 2015-16
to 2019-20 is satisfactory,If the company makes better use of Working Capital then the
company can achieve the target.

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BIBILOGRAPHY

Books:

Management Accounting Shashi K. Gupta, R.K. Sharma, Neeti Gupta

Financial Management Ravi M. Kishore

Financial Management Khan & Jain

Articles:

T.S Reddy and Y. Hari Prasad Reddy, Management Accounting 3rd Edition, 2008, 3.9 to
3.25

Jae [Link], Joel [Link] Outlines the principle and problems of Financial Accounting,
during 1999, Page number 279 to 298

Susan ward in Financial Ratio Analysis For Performance Check, Page number 132

MY Khan & P.K Jain in the book Financial Management, 4th Edition, during 2006, 6.1 to
6.81

Websites :

[Link]

[Link]

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ANNEXURE

BALANCE SHEET OF BHARAT ELECTRONICS PERTAINING FROM THE YEAR

2016-2020 (Rs. Crores)

PARTICULARS Mar’20 Mar’19 Mar’18 Mar’17 Mar’16

12 month 12months 12 months 12 months 12 months
Equity Share Capital 80.00 80.00 80.00 80.00 80.00
Reserves 7,805.03 6,937.24 6,233.69 5,542.21 4,905.71
Loans
Secured Loans 9.11 12.61 19.17 14.76 16.99
Unsecured Loans 0.00 0.00 0.00 0.00 0.00
Current Liabilities
Provisions 776.68 599.49 716.17 588.72 573.60
Current Liabilities 6,528.89 6,897.94 7,407.10 8,632.67 7,585.33
TOTAL 15,199.71 14,527.28 14,446.13 14,858.36 13,161.63
Application Of funds
Net Block 771.11 650.94 575.45 510.16 483.71
Capital Work in Progress 139.78 196.86 161.42 113.56 57.68
Investments 19.12 11.98 11.98 11.98 11.98
Inventories 3,369.43 3,298.71 3,191.29 2,673.80 2,350.14
Sundry Debtors 3,786.14 4,128.54 3,334.67 2,686.95 2,896.58

Cash and Bank Balance 5,881.53 4,564.37 5,302.49 6,772.52 6,519.36

Total Current Assets 13,037.10 11,991.62 11,828.45 12,133.27 11,766.08
Fixed Deposits 0.00 0.00 0.00 0.00 0.00
Loans and Advances 1,232.60 1,675.88 1,868.83 2,089.38 842.18
Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00
TOTAL 15,199.71 14,527.28 14,446.13 14,858.36 13,161.63

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PROFIT AND LOSS ACCOUNT OF BHARAT ELECTRONICS PERTAINING

FROM THE YEAR 2016-2020 (Rs. Crores)

PARTICULARS Mar’20 Mar’19 Mar’18 Mar’17 Mar’16

12 12 12 12 12
months months months months months
Income
Sales Turnover 6,861.68 6,275.52 6,103.82 5821.27 5,643.04
Excise Duty 19.03 0.00 0.00 53.63 57.95
Net Sales 6,842.65 6,275.52 6,103.82 5,767.64 5,585.09
Other Income 477.95 428.47 609.98 585.49 275.98
Stock Adjustments -36.02 -47.33 278.00 89.95 -8.89
Total Income 7,284.58 6,656.66 6,991 6,443.08 5,852
Expenditure
Raw Materials 3,744.53 3,583.56 4,084.93 3,669.03 3,129.31
Power & Fuel Cost 38.84 37.37 34.13 26.90 27.69
Employee Cost 1,263.45 1,030.43 1,110.79 1,081.23 1,041.86
Other Manufacturing Expenses 0.00 0.00 0.00 0.00 0.00
Selling and Admin Expenses 0.00 0.00 0.00 0.00 0.00
Miscellaneous Expenses 616.48 685.72 509.49 465.82 389.49
Preoperative Exp. Capitalized 0.00 0.00 0.00 0.00 0.00
Total Expenses 5,663.30 5,337.08 5,739.34 5,242.98 4,588.35
Operating Profit 1,143.33 891.11 642.48 614.61 987.85
PBDIT 1,621.28 1,319.58 1,252.46 1,200.10 1,263.83
Interest 1.38 3.40 0.78 0.60 0.73
PBDT 1,619.90 1,316.18 1,251.68 1,199.50 1,263.10
Depreciation 153.96 142.10 130.71 120.80 122.04
Other Written Off 0.00 0.00 0.00 0.00 0.00
Profit Before Tax 1,465.94 1,174.08 1,120.97 1,078.70 1,141.06
Extra-ordering items 0.75 0.65 -6.37 -3.86 20.08
PBT 1,466.69 1,174.73 1,114.60 1,074.84 1,161.14
Tax 299.45 243.12 224.76 244.95 299.68
Return Net Profit 1,167.24 931.62 889.83 829.90 861.47
Total Value Addition 1,918.77 1,753.51 1,654.41 1,573.94 1,459.03
Preference Dividend 0.00 0.00 0.00 0.00 0.00
Equity Dividend 233.60 186.40 178.40 166.40 172.80
Corporate Dividend Tax 47.38 31.68 29.95 26.99 28.22
Per Share data (annualized)
Share issued (lakhs) 800.00 800.00 800.00 800.00 800.00
Earnings Per Share (₹) 145.91 116.45 111.23 103.74 107.68
Equity Dividend (%) 292.00 233.00 223.00 208.00 216.00
Book Value (₹) 985.63 877.15 787.96 702.78 623.21

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