Bhakta Ranjan Deka EPGP-12B-038

FA Assignment#3
Linking Balance sheet with Profit and Loss Statement
Company Name: Deepak Nitrite

1. Please interlink your company’s “Balance Sheet” with its “Profit & Loss Statement” (as was done
in our class on the four different companies) and being shared using examples of (HPCL / Ultra
Tech Cement). Just writing your observations is good enough (no need to draw lines and
such stuff). Analyse within 350 words

Ans.: Deepak Nitrite has gaining profit in each financial year. Company has a strong strategic vision for
continuous growth with expanding its global presence. For the Financial Year 2018-19, company’s
consolidated revenue was 2700+ Crore and PBT was 268 Crore. Company’s balance sheet and Profit
and Loss Statement link is discussed below:
Asset:
Deepak Nitrite has increase its non-current tangible assets by 1117.65 Crore in the FY 2018-19, which
enable company’s high revenue growth i.e. 1023.70 Crore compared to previous year. The new
production facility in Gujrat make the company’s tangible asset value rise and its high production and
more changes in Inventories of Finished Goods, Work-in-Progress and Traded Goods (- 153.59 Crore).
Increase in tangible assets leads to increase in Depreciation and Amortization Expense by 25.2 Crore compared
to previous financial year.

Trade Receivables:
Trade receivables is 574.96 Crore which is 28.38% higher than previous year. This is link to increase in total
sales and also contributing in financial cost of the company (32.38% ⇧). As company is selling products to its
customer, this may lead to bad debt written off. For the financial year 2018-19 bad debt written off is 10.36
Crore.

Inventories:
Inventory is 410.73 Crore for the financial year 2018-19, which is 20.77% increase than last year. As a result,
revenue and cost of material consumed got increased. Raise in inventories is good for production and there
will be no shortage of raw materials. However, this leads to rise in other manufacturing expenses and Freight &
Forwarding Charges and interest payable.

Non-Current Liabilities:
Non-Current liabilities of Deepak Nitrite increased by 351.74 Crore i.e. 36.17%. This helps to raise sales
revenue 37.92% (1023.71 Crore) compare to previous financial year. Increasing in borrowing, provisions,
deferred tax liabilities(net) leads to raise to 34.78 Crore (57.27%). Increasing in borrowing also leads to raise
in interest 34.12 Crore (45.32%) under finance cost.

Equity:
For the year 2018-19, even though the equity share capital remain same against the previous year, but other
equity raised by 149.45 Crore. This is part of the retained earnings of Deepak Nitrite i.e. 170.82 Crore.

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