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    Management Accounting: Assignment 1

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    franky_pawan
    1) The document is the comparative balance sheet and income statement of Bajaj Auto Ltd for the years 2009 and 2008. 2) Some key figures from the balance sheet include total assets of Rs. 34,438.80 million in 2009 and Rs. 29,329.10 million in 2008. Net fixed assets increased from Rs. 12,928.20 million to Rs. 15,480.90 million over the same period. 3) According to the income statement, net sales declined from Rs. 86,632.90 million to Rs. 84,369.40 million between 2008 and 2009. However, operating profit declined at a greater rate from Rs. 12,370.90 million to Rs

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    Management Accounting: Assignment 1

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    1) The document is the comparative balance sheet and income statement of Bajaj Auto Ltd for the years 2009 and 2008. 2) Some key figures from the balance sheet include total assets of Rs. 34,438.80 million in 2009 and Rs. 29,329.10 million in 2008. Net fixed assets increased from Rs. 12,928.20 million to Rs. 15,480.90 million over the same period. 3) According to the income statement, net sales declined from Rs. 86,632.90 million to Rs. 84,369.40 million between 2008 and 2009. However, operating profit declined at a greater rate from Rs. 12,370.90 million to Rs

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    1) The document is the comparative balance sheet and income statement of Bajaj Auto Ltd for the years 2009 and 2008. 2) Some key figures from the balance sheet include total assets of Rs. 34,438.80 million in 2009 and Rs. 29,329.10 million in 2008. Net fixed assets increased from Rs. 12,928.20 million to Rs. 15,480.90 million over the same period. 3) According to the income statement, net sales declined from Rs. 86,632.90 million to Rs. 84,369.40 million between 2008 and 2009. However, operating profit declined at a greater rate from Rs. 12,370.90 million to Rs

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    33 views8 pages

    Management Accounting: Assignment 1

    Uploaded by

    franky_pawan
    1) The document is the comparative balance sheet and income statement of Bajaj Auto Ltd for the years 2009 and 2008. 2) Some key figures from the balance sheet include total assets of Rs. 34,438.80 million in 2009 and Rs. 29,329.10 million in 2008. Net fixed assets increased from Rs. 12,928.20 million to Rs. 15,480.90 million over the same period. 3) According to the income statement, net sales declined from Rs. 86,632.90 million to Rs. 84,369.40 million between 2008 and 2009. However, operating profit declined at a greater rate from Rs. 12,370.90 million to Rs

    Copyright:

    Attribution Non-Commercial (BY-NC)
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    Download as docx, pdf, or txt
    of 8

    Assignment 1

    Management accounting

    Kuldeep Norge

    09020541029

    BAJAJ AUTO ltd.


    “Distinctly Ahead”

    The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a
    wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home
    Appliances, lighting, iron and steel, insurance, travel and finance. The group's flagship company,
    Bajaj Auto, is ranked as the world's fourth largest two- and three- wheeler manufacturer and the
    Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South and
    South East Asia. Founded in 1926, at the height of India's movement for independence from the
    British, the group has an illustrious history. The integrity, dedication, resourcefulness and
    determination to succeed which are characteristic of the group today, are often traced back to its
    birth during those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the
    group, was a close confidant and disciple of Mahatma Gandhi. In fact, Gandhiji had adopted him as
    his son. This close relationship and his deep involvement in the independence movement did not
    leave Jamnalal Bajaj with much time to spend on his newly launched business venture.

    His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942. He too was close
    to Gandhiji and it was only after Independence in 1947, that he was able to give his full attention to
    the business. Kamalnayan Bajaj not only consolidated the group, but also diversified into various
    manufacturing activities. The present Chairman of the group, Rahul Bajaj, took charge of the
    business in 1965. Under his leadership, the turnover of the Bajaj Auto the flagship company has gone
    up from Rs.72 million to Rs.46.16 billion (USD 936 million), its product portfolio has expanded and
    the brand has found a global market. He is India's one of the most distinguished business leaders
    and internationally respected for his business acumen and entrepreneurial spirit. The management
    team comprises of following 4 major people.

    Rahul Bajaj Chairman


    Madhur Bajaj Vice Chairman
    Rajiv Bajaj Managing Director
    Sanjiv Bajaj Executive Director
    COMPARATIVE
    BALANCE SHEET

    All figures in million Rs.

        inc/dec in percentage
    2009 2008 consecutive inc/dec
    yrs
    Sources of Funds
    1. Shareholders’ Funds
    a) Share Capital 1,446.80 1,446.80
    b) Reserves & Surplus 17,250.10 14,429.1
    0
    18,696.90 15,875.9 2,821.00 17.76907136
    0
    2. Loan Funds
    a) Secured Loans - 69.5
    b) Unsecured Loans 15,700.00 13,273.9
    0
    15,700.00 13,343.4 2,356.60 17.66116582
    0
    3. Deferred Tax Adjustments
    a) Deferred Tax Liabilities 1,647.90 1,419.40
    b) Deferred Tax Assets -1,606.00 -1,309.60
    41.9 109.8 -67.90 -61.83970856
    Total   34,438.80 29,329.1 5,109.70 17.42194612
    0
    Application of Funds
    1. Fixed Assets
    a) Gross Block 33,339.40 29,841.5
    0
    b) Less: Depreciation and write downs 18,079.10 17,260.7
    0
    c) Net Block 15,260.30 12,580.8
    0
    d) Capital Work in progress, expenditure to date 220.6 347.4
    15,480.90 12,928.2 2,552.70 19.74520815
    0
    2. Technical Know-how 162.6 105.3 57.30 54.41595442

    3. Investments 18,085.20 18,571.4 -486.20 -2.618004028


    0
    4. Current Assets, Loans and Advances
    a) Inventories 3,388.40 3,496.10
    b) Sundry Debtors 3,586.50 2,753.10
    c) Cash and Bank Balances 1,368.70 560.7
    d) Other Current Assets 1,256.80 799.5
    e) Loans and Advances 13,652.30 8,887.70
    23,252.70 16,497.1
    0
    Less: Current Liabilities and Provisions
    a) Liabilities 12,134.10 10,432.5
    0
    b) Provisions 12,241.50 8,340.40
    24,375.60 18,772.9
    0
    Net Current Assets -1,122.90 -2,275.80 1,152.90 -50.65910888
    5. Miscellaneous Expenditure not written-off 1,833.00 1,833.00
    Voluntary Retirement Compensation

    Total   34,438.80 29,329.1 5,109.70 17.42194612


    0
    COMPARATIVE
    INCOME
    STATEMENT

    all figures in million Rs


    2009 2008 inc/dec in percentage
    consecutive inc/dec
    yrs
    Income
    Sales 90,496.60 96,899.50 -6,402.90 -6.607774034
    Less: Excise Duty 6,127.20 10,266.60
    Net Sales 84,369.40 86,632.90 -2,263.50 -2.612748736
    Other Income 4,953.20 5,055.50 -102.30 -2.02353872
    89,322.60 91,688.40 -2,365.80 -2.580260971
    Expenditure
    Materials 64,634.70 66,203.70 -1,569.00 -2.369958175
    Other Expenses 11,692.20 11,553.00 139.20 1.204881849
    Interest 210.1 51.6 158.50 307.1705426
    Depreciation and write downs 1,297.90 1,739.60 -441.70 -25.39089446
    Less: Expenses, included in above item s, 144.2 230.4 -86.20 -37.41319444
    capitalised
    77,690.70 79,317.50 -1,626.80 -2.050997573
    Operating profit before taxation and 11,631.90 12,370.90 -739.00 -5.973696336
    exceptional items
    Exceptional items
    Expenditure incurred for Voluntary 1,833.00 1,023.60
    Retirement of employees
    Valuation losses of derivative hedging 218
    instruments
    2,051.00 1,023.60 1,027.40 100.3712388
    Profit before taxation 9,580.90 11,347.30 -1,766.40 -15.56669869
    Taxation
    Current Tax 3,009.00 3,927.50 -918.50 -23.3863781
    Deferred Tax -67.9 -173.2 105.30 -60.79676674
    Fringe Benefit Tax 75 33.5 41.50 123.880597
    3,016.10 3,787.80 -771.70 -20.37330376
    Profit for the period 6,564.80 7,559.50 -994.70 -13.15827766
    Prior Period Expenses 19.8 1.7
    6,545.00 7,557.80 -1,012.80 -13.40072508
    Transfer to General Reserve 2,821.00 4,172.30 -1,351.30 -32.38741222
    Proposed Dividend 2,821.00 4,172.30 -1,351.30 -32.38741222
    Corporate Dividend Tax thereon 3,183.00 2,893.70 289.30 9.997580952
    Balance Carried to Balance Sheet -- --
    Basic and diluted Earnings Per Share 45.2 54.2 -9.00 -16.60516605
    Nominal value per share (Rs.) 10 10
    Net Profit (Rs. In Millions) 6,545.00 7,557.80 -1,012.80 -13.40072508
    Weighted average number of Shares (mn) 144.7 139.5 5.20 3.727598566

    ANALYSIS OF Comparative balance sheet:


     17.7 % increases in shareholder’s funds through reserves and surplus, showing proper

    management effort and trust of people on Bajaj as a company.

     Through unsecured loans also Bajaj increased its funds.

     There was 2.61 % decrease in investments because of the market condition going through

    recession.

     Bajaj tried to keep up the cash and bank balance as there was increase in cash and bank

    balance by 144% to 1368.

    ANALYSIS OF COMPARATIVE INCOME STATEMENT:

     Operating profit before tax (PBT) fell by 16% to Rs.8.46 billion. This was largely due to a

    voluntary retirement scheme (VRS) of Rs.1.83 billion and mark-to-market losses of Rs.218

    million. Even so, the operating profit margin was 9.6% of net sales and other operating

    income.

     Despite a sharp decline in domestic sales of motorcycles, the company’s operating EBITDA

    stood at Rs.12.02 billion. The operating EBITDA margin was 13.6% of net sales and other

    operating income for 2008-09, and recorded a 15.2% margin for Q4, 2008-09.

     Net sales (excluding excise duty) and other operating income fell by 2.6% to Rs.88.11 billion.

     Earnings per share declined to 45 because of 13.4 % loss in net profit to Rs 6545 million.

    RATIO ANALYSIS
    1. Gross Profit Ratio:
     It establishes relationship between gross profit and sales.
     = (Gross Profit/ Net Sales) x 100
     = 11.06

    2. Return on Asset :
     It indicates relationship between net profit and asset. It indicates utilization of
    all assets to generate revenue and profit.
     = (PAT /Total Asset) x100
     = 10.87

    3. Return on Capital Employed (ROI):


     (Net operating profit / Capital Employed) x 100
     = 32.75

    4. Asset Turnover Ratios:


     Total Asset Turnover ratio = Net sales / Total Asset
     2.53

    5. Debt equity ratio


     = Debt / Equity
     Debt means long term loan, borrowings and debentures. Equity means equity
    share capital, preference share capital and Reserves and surplus.
     .84.

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