Financial Analysis of Sesa Goa free essay sample

FINANCIAL MANAGEMENT SAKET LOHIA 10BSPHH010671 1/11/2011 Table of Contents Objective:3 Introduction:3 Leverage:4 Financial Statement analysis:5 Working Capital Analysis:8 Dividend policy:9 Conclusion:9 Objective: To study the financial performance of Sesa Goa Pvt. Ltd over a period of five years. Introduction: Sesa Goa Limited was incorporated in the year 1965 as a private limited company. Basically the companys business division is alienated into two broad categories, such as the Iron ore division and Metcoke division. Apart from the two main divisions, the shipping also added to the business. The company exports approximately 5 million tons of iron ore, fines and lumps to customers in Japan, China and Europe from ports on both the east and west coasts of India. Besides the mining activities in Goa, mining operations in Karnataka and Orissa. During the year 2004, compact charging system for coke plant was commissioned and Sesa Kembla Coke Company Limited, a 100% subsidiary of the company was merged with Sesa Goa Limited with effect from 1 April 2004. During the period of 2006, Forbes Asia ranks Sesa Goa as one of Asias 200 companies with sales greater than 1 billion US $ in its Best Under A Billion study and also the Dun Bradstreet ranks Sesa Goa as the 4th best in the Indian Mining Sector among Indias top 500 companies. In 2007, the Vedanta Resources plc, a diversified metals and mining group, listed on the London Stock Exchange acquires 51% controlling stake in Sesa Goa Limited from Mitsui Co. Ltd. The Company Will invest Rs3, 000 crore to double ore capacity to 20-25 million tones a year and increase pig iron, coke capacity in the year 2008. Leverage: Operating Leverage affects a firms operating profit; DOL indicates the fluctuation in EBIT with a unit percentage change in sales. For Mar-10, if sales increase by 1%, the EBIT will change by 0. 60 times. OPERATING LEVERAGE| Mar-07| 0. 80| Mar-08| 1. 90| Mar-09| 0. 43| Mar-10| 0. 60| Financial leverage affects earning per share of the company. DFL is measured as percentage change in EPS for every unit change in EBIT. The firm leverages upon the debt. The variability of EPS may be caused by change in EBIT and is called financial risk. FINANCIAL LEVERAGE| Mar-07| 1. 10| Mar-08| 1. 02| Mar-09| -5. 19| Mar-10| 0. 89| Combined leverage measures the change in EPS with a unit change in Sales. High value of combined leverage indicates high return and at the same time high financial and operating risk. TOTAL LEVERAGE| Mar-07| 0. 87| Mar-08| 1. 94| Mar-09| -2. 23| Mar-10| 0. 54| Financial Statement analysis: Year| 2005-06| 2006-07| 2007-08| 2008-09| 2009-10| Liquidity Ratios| | | | | | Current Ratio| 2. 136429831| 2. 229822565| 2. 265734883| 2. 891278807| 3. 902479446| Quick Ratio| 1. 06545566| 1. 155055422| 1. 490333971| 2. 472480795| 3. 524118584| Turnover Ratios| | | | | | Accounts receivables turnover ratio| 9. 739281003| 9. 10978574| 10. 74934722| 14. 525493| 19. 9227564| Average Collection period| 36. 96371426| 39. 5179437| 33. 49040576| 24. 7840125| 18. 06978877| Inventory Turnover | 3. 617161867| 3. 41624413| 5. 305768229| 9. 713703001| 8. 774283216| Profitability Ratios| | | | | | Gross Profit Margin Ratio| 0. 471280132| 0. 461170158| 0. 633239501| 0. 526944576| 0. 519422347| Net Profit Margin Ratio| 0. 304379237| 0. 3005539| 0. 414112644| 0. 377810395| 0. 38604037| Asset Turnover| 1. 492098515| 1. 2655186| 1. 446589602| 1. 22322517| 0. 692400804| Return on Equity| 0. 96437676| 0. 46961953| 0. 694219184| 0. 525443602| 0. 35101211| Ownership Ratios| | | | | | EPS | 131. 4299961| 147. 7199899| 371. 4200061| 24. 28999999| 24. 94000001| Price-Earning Ratio| 0. 007608613| 0. 006769565| 0. 00269237| 0. 041169205| 0. 040096231| DPS| 38. 37203153| 38. 23715194| 44. 10379144| 2. 24063394| 3. 272627463| Dividend payout ratio| 0. 291957924| 0. 258848866| 0. 118743715| 0. 092245119| 0. 131220027| Capital Structure Ratios| | | | | | Debt-Equity Ratio| 0. 009067262| 0| 0| 0. 000422774| 0. 267149046| Debt Ratio| 0. 008985785| 0| 0| 0. 000422595| 0. 210826853| Liquidity Ratios: Current ratio of Sesa Goa seems to be impressive as its always above 2 and also have gone to 3 in the recent years implying good overall liquidity * Quick ratio of Sesa Goa also suggests that it is quite liquid and inventories as a part of current assets is not more, moreover it has been almost same as that of the current ratio from the past two years Turnover Ratios: * Accounts receivables turnover ratio of Sesa Goa suggests that on an average the receivables are generated and collected between 9 and 19 times in a year over a period of time it is good that it can generate the receivables as high as 19 times during the year. As we can see from the above table that Average Collection period has been reduced considerably over the years and has come down to around 18 f rom 37 which suggests that it takes 18 days to collect the receivables amount now from 37 days in 2006. * Inventory turnover ratio of the company suggests that how fast the inventory is moving through the firm and generating sales it has been increasing over the years for Sesa Goa suggesting that inventory is being converted to sales quite often. Profitability Ratios: Profitability ratios measure the efficiency of the firm’s activities and its ability to generate profits * Gross profit margin ratio which gives gross profit as a percentage of net sales has been fluctuating in case of Sesa Goa in mid years it has even reached to 63% indicating high production and operational efficiency and good correlation between production costs and selling price * Net profit margin ratio shows the earnings left for shareholders as a percentage of sales and gives a picture of the overall efficiency of the firm which also gives the profit margins a firm sets over its sales it also indicates efficiency of production, administration, selling, financing, pricing and tax management * Asset turnover ratio highlights the amount of assets that a firm uses to generate its total sales for e. g. in 2006 Asset turnover was 1. 492 which indicates that Sesa Goa with 1 unit of asset base can produce 1. 492 units of sales but it has come down in the recent years and is not quite stable over the period * Return on Equity measures the profitability of equity funds invested in the firm; in short it reflects the productivity of capital employed in the firm it has been fluctuating over the period for Sesa Goa Ownership Ratios: Ownership ratios help the stockholders to analyze their present and future performance of investment in their firm. It helps the analysts to assess the future value of the market * EPS is very important ratio to all the investors as well as the organization as it can decide as to how much dividends it can give to its shareholders and how much portion can it retain for its future business endeavors on this very important indicator to them i. e. how much it has earned per share. It has been come down drastically in case of Sesa Goa from some 131 to around 24 which can be compared to industry figures to give a better and clear understanding of the situation. * Price-Earnings ratio gives the relationship between the market price of the stock and its earnings by revealing how earnings affect the market price of the firm’s stock. Capital Structure Ratios: * Debt-Equity ratio gives the firm capital structure as to what percentage of firms capital is debt and what percentage of it is equity, it gives the relative contributions of creditors and owners of the firm Sesa Goa’s analysis shows that in initial years it has take minimum debt not leveraging the financial risk of the company and has relied heavily on equity capital Dividend Ratios: As the common stockholder is very much concerned about the firm’s policy of payment of cash dividends, dividend ratios become very important to both the individual as well as the company as it attracts the prospects to buy more shares of the company * DPS gives the dividend paid per share to the shareholders it has been decreasing gradually which says that the firm plough backs its retained earnings rather than distributing it as dividends as it is a relatively cheap source of finance for the company * Dividend payout ratio is the ratio of DPS to EPS which gives the percentage of dividends distributed by a firm of its EPS Working Capital Analysis: Year| 2005-06| 2006-07| 2007-08| 2008-09| 2009-10| A. Raw material storage period| 124. 64777| 136. 86052| 107. 03211| 56. 7033| 47. 526284| B. Average conversion period| 0. 4636364| 0. 492126| 0. 3298429| 0. 2095808| 0. 2160256| C. Finished goods storage period| 22. 161533| 22. 214291| 21. 47094| 15. 460208| 23. 167539| D. Average collection period| 36. 963717| 39. 517944| 33. 490406| 24. 784016| 18. 069789| E. Average payment period| 88. 484539| 90. 192557| 93. 340486| 154. 11257| 257. 6458| Gross operating cycle = A+B+C+D| 184. 23665| 199. 08488| 162. 3233| 97. 157106| 88. 979638| Net operating cycle = (Gross operating cycle E)| 95. 752114| 108. 89232| 68. 982809| -56. 95546| -168. 6662| Sesa Goa has tremendously improved its operating cycle efficiency over the years as we can clearly see from the above table The Raw material storage period has been continuously decreased showing excellent inventory management as also the average payment period is increased tremendously showing the confidence of creditors on the company’s operations post its takeover by the Vedanta group This also implies that the firm is recovering the money before it is required to pay its suppliers and it has also implied that the firm has minimized on its external borrowings, it shows that the firm has adopted some strict credit control policies as well to reduce its operating cycle Dividend policy: Company Name| Rs. per share| Yield| Dividend Rate| Ex-date| Div-date| | | | | | | Sesa Goa Ltd. | 20| 1. 98| 200| 11-Jul-05| 31-May-05| | 15| 1. 89| 150| 13-Mar-06| 27-Feb-06| | 25| 1. 24| 250| 4-Dec-06| 28-Oct-06| | 15| 2. 2| 150| 19-Feb-07| 12-Feb-07| | 25| 2. 15| 250| 21-Sep-07| 23-Jul-07| | 15| 1. 33| 150| 6-Feb-08| 23-Jan-08| | 30| 0. 96| 300| 11-Jul-08| 29-Apr-08| | 22. 5| 2. 58| 225| 31-Jul-09| 20-Apr-09| | 32. 5| 0. 49| 325| 2-Jul-10| 20-Apr-10| As we can see from the above table the company has regularly announced dividends to lure the investors to buy their shares as they have always considered relevance of the dividend theories according to the psyche of the Indian investors Walters model| Year| Price per share| | 2006| 1406. 48963| | 2007| 1315. 546763| | 2008| 5227. 067654| | 2009| 266. 473683| | 2010| 183. 3969079| As per the Walters model of dividend policy we see that the value of the firm depends on payment of the dividends which is evident from the above table Conclusion: Thus we have studied and implemented the key statistical financial data for Sesa Goa Pvt. Ltd. over a period of 5 years to gain insight into the industry and see its practices and performance over the same period.

How to Choose Help Me with My Research Paper

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How to Write About the Period of the Baroque Period

How to Write About the Period of the Baroque PeriodThere are several Baroque essay topics that you can choose from to help you learn more about the subject. Whether it is a world tour or a period piece, writing about a period or a historical event can help you find your voice. The easiest way to do this is to take an essay writing class. However, if you are busy or simply have not found the time to take such a class, then you can simply try researching different essays and looking for information on Baroque topics.Because it is such a broad subject, there are a number of topics that can be written about Baroque essay topics. You can use the Internet to find articles about the subject and read through the articles to find out what some of the problems were. The topics that people often chose are those that deal with famous people, events, or countries.Some of the essay topics are ones that you can find in books and others that can be researched at the library. By doing this, you will get a deeper understanding of what the subject is all about. Although it is a difficult subject to write about, by writing about the events that happened during the Baroque period, you will gain an insight into what was going on at the time.You will find that the essay topics that are written about during the Renaissance are probably the most interesting. This period was considered to be the height of the Baroque period. Many of the great artists of the time, like Raphael, Giotto, Michelangelo, and Titian, painted scenes from this period.Some of the art scenes that were created during this period include frescoes which are portraits of people that were painted on walls. In some of the frescoes, you will find figures that have very colorful clothing and are wearing extravagant hats. If you want to learn more about this period, then you will have to read up on the topic.When you research about the subject, you will need to search the library and visit the library, especially the Rare Book and Special Collections section. There are always books that are well-worth reading and some that will help you learn more about the subject. It is also a good idea to watch a few movies that portray the period.The most important thing to remember when you are taking an essay writing class is that you must not let your ego get in the way. When you write, think about how you are going to present the information you learn. If you can accomplish this goal, then you will be able to help yourself to be better at the subject.

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Is Global Warming a Threat to Polar and Glacier Ice Essay Example

Is Global Warming a Threat to Polar and Glacier Ice? Paper Is global warming a threat to polar and glacier ice? Global warming is a phenomenon whereby the earths average temperature increases. Global warming has a devastating effect on the Earths climate. Scientists are still studying global warming effects, and have not reached a consensus about what will happen in the future. The melting of the polar ice caps and global warming are getting more and more attention lately. If melting glaciers caused by global warming, or it is a natural process at this moment opinion of scientists and experts is diverge. There are many causes of the melting of the polar ice caps and global warming, some of which are natural. However, the activities of man are responsible for much of the rapid change that scientists are seeing. Andrew S. Revving in his article Global Warming is Eroding Glacial Ice raises the Issue of global warming its causes and effects. 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Kilimanjaro has pulled back five-hundred feet a year from 1998 to 2000, which is 33 times faster than the rate from 1963 to 1 978 (416). Philipp Sotto in his article Gold Comfort for Global warming considers that the temperature change as a perfectly natural event. He argues that climate change is part of Earths cycle, and that it right on schedule. He believes that people do not have much control over nature. He talks about the collapse of Larsen B ice shelf in Antarctica, the largest single event in a series of retreats by ice shelves in the Antarctica over the last 30 years. He considers this crash perfect natural disaster for journalists who are of the view that global warming is a result of greenhouse gas emissions and human activity in the modern world. According to P. Sotto, the collapse Of ice is a natural process Of nature, and icebreakers are falling after a hot summer and high winds. He finds it impossible the North Pole is disappearing and neither is the South Pole. He writes about studies, which have shown that West Antarctic Ice Sheet may be getting thicker, not thinner. He describes the Antarctica as unusual continent with many climates, and many geomorphology and glaciological regimes. Researchers of University of Illinois have reported that the temperature in Antarctica have been falling in the last decade. And it is not surprising, according to him, when parts of the continent are cooling to see some of the ice melts such as Larsen 8. And at the time as people concerned about global warming, he said, the planet may be moving in the opposite direction. Moron Monte in her article Science file argues that climate change, such as global warming leads to natural disasters like hurricanes, tornadoes, earthquakes, floods, and volcanic eruptions. Due to increased temperature on the earth, ice begins to melt. She describes that Arctic ice are crucial to Earths climate system. Ice cap reflects the suns rays, and thus does not heat up the planet. 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The eNotes Blog How to Make the Most of your Study AbroadExperience

How to Make the Most of your Study AbroadExperience Part 2 of   Another Kind of Green:  15 helpful tips  from our editorial intern on how  to prepare for and make the most of your time studying abroad. Once in a while when its good, itll feel like it should.   In John Mayers Song Stop this Train, Mayer compares life to a train thats moving too fast, wanting it to stop.   He acknowledges that every now and again there comes a time when everythings grooving.   If you tuned into my previous post, part 1 of Another Kind of Green, then you already know that while studying abroad everything feels like it should.   The experience is extremely amazing and provides great value to college students.   It is the most rewarding, gratifying, adventurous, and beneficial educational step Ive ever taken in my life.   Studying abroad requires careful planning before and during the trip.   Taking the right steps to prepare for studying abroad will ease your transition   and reduce the culture shock of integrating into a new environment and culture.   It can also ensure a good fit between yourself and the educational institution, and even more importantly the country.   By keeping in mind the following tips for the  before  and  during parts of your journey, you will be able to maximize your experience and keep on riding that train. 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Get the paperwork over with.   Fill out any and all forms required for your trip.   Do this way in advance so you are not stressed near your departure.   Passports can take a long time to come in the mail, and the same with receiving your student VISA. 6. Pack appropriately.  And smartly.   Dont bring bathing suits and tank tops if youre going to a cold place.   You dont want your attire to scream HEY, IM AMERICAN! either.   That can be a good way to attract   pickpocketers and other troublemakers.   Pack items that are flexible and match well with several other items.   I recommend packing extra towels and DONT recommend packing items you think you will only wear once or twice.   Make sure to stock up on any prescriptions or favorite grooming products, as you will likely not find these wherever youre going.   I made several trips to the mall to purchase nicer clothes to try to match the fashionable Italians. 7. Reach out to roommates.   Its nice to have someones contact and already be familiar with a face when you arrive.   Everything will be so new, and going through that with someone can make everything easier. I Facebook messaged two of my roommates to introduce myself (both of whom didnt respondbut I became close with them once I was there). 8. Stay linked to home.  Set up a way to keep in contact with friends and family from home.   Facebook and iMessage are the most convenient ways of doing this.   Bringing an iPhone or other wi-fi capable device will provide you access to any wireless network even if you dont have cell or data service.   A simple international phone that has calling and texting is useful for emergencies and calling people when you really need to.   You can save on expensive rates by using apps such as Viber, WhatsApp, and Tango for free calls and texts. 9. Learn the language.   This obviously only applies to those going to a non-English speaking country.   Having a little knowledge of the language and learning a few key words can really help you out and lower your stress level once you arrive, and its also a cool trait to have that your friends will value.   Rosetta Stone is a great option for tackling the basics of a language before you depart.   I bought the first level of Italian and pretty much completed it, and found it really gave me a head start on everyone in learning some useful and common expressions.   Also, I recommend using Google Maps and the street view feature to become accustomed with a couple streets around your school and housing.   Once youre there, youll recognize key landmarks and decrease your chance of being lost (also is another good trait to have that friends value). 10. Be open to new things.   Your study abroad experience largely depends on your mindset.   Go in with an open attitude and the will to experience new things. During 1. Cycle over.  Ã‚  You made it to your destination.   The planning and travel is over, and now its time to enjoy it.   Y0u may find this difficult because you are extremely tired and jet lagged.   Try to cycle over and force yourself to go to sleep and wake up at the appropriate hours.   If you arrive during the day, stay awake until its at least dark.   Bring melatonin  and take it for the first week.   It is a natural supplement that helps you stay asleep and get the deep sleep that is crucial to cycling over quickly.   I used this throughout my trip as my sleeping patterns were often inconsistent due to travel. 2. Find the necessities.   Talk to people or walk around and discover a grocery store, dry cleaner/fluff-and-fold, coffee shop, bar, cheap restaurant, late night restaurant, and gym.   Knowing these landmarks from the beginning will give you a general knowledge of places that will come in handy for the rest of your trip.   Also, find a buddy and an emergency contact right away.   Do these things ASAP, or else you will put them off and become too busy to do them later.   I didnt find a gym for a week or so, but my friends and I used things in our room like suitcases and potted plants to get a scrappy at-home workout (pictured to the right). 3. Get comfortable.   For the first couple weeks, just become comfortable with yourself in your new atmosphere.   Be yourself and make friends naturally.   Its okay if these friends mostly are Americansyou can eventually integrate yourself further into the culture and make friends with the natives.   I highly recommend branching out though at some point.   You will surely have the most fun and learn the most about the culture, food, and fun places from native students.   The last third of my trip I really started hanging out with Italians, and it totally changed my experience for the better. 4. Research, again.  Now that youre there, youll start to hear people talk about all the places they want to visit on the weekends.   I recommend planning these trips early.   The advantage to this is that it reduces your stress and helps you save on airfare.   The disadvantage is that its not obvious yet who you want to go on these trips with.   The best way to find cheap flights is skyscanner.net.   Dont use the round-trip option.   You can sometimes find better deals if you get two one-way flights.   Also, coming back early Monday morning (6:00am) before class is often the cheapest option.   Youll end up sleeping at the airport, but saving a bunch of money.   I still remember the four of five early mornings sleeping sprawled out across the terminal floor.   The app TripIt is a great tool to use to organize your trip information. As far as places to go, try to visit a wide variety of destinations.   Coastal trips are attractive, but mix in some that have a different feel as well.   My favorite trips were Ireland and Switzerland. 5. Relax, and enjoy.   This is your time and you can do what you want with it.   Take care of your studies, but really explore this new home and live it to the fullest.   It will be over in the blink of an eye and youll say I cant believe I just spent four months here.   I stopped making to-do lists and really tried to be as free as possible.   Be adventurous and try things you havent before.   Get comfortable, but not too comfortable.   You want to feel at home, but you should also continue to discover new things.   I had a great time and found some beautiful sights just walking around the streets of Trastevere on my own after class. Related articles Another Kind of Green: How Studying Abroad Can Improve Your College Experience ()