TATA POWER

DOL
30.00

25.00

20.00
As it as it can be
seen that 15.00 from
2018 to 10.00 2019
the
5.00
decreases so low
DOL 0.00
2021 2 02 0 2 01 9 2 01 8
indicates that
-5.00
the
company’s -10.00
variable cost is
larger than it fixed cost. That implies that a significant increase in the company’s sales

From 2019 to 2020 the duel decreases so high DOL means that the companies fixed cost exceed its
variable cost. It states that the company can boost operating income by increasing its sales again it
decreased

DFL
3.00

2.50

2.00

1.50

1.00

0.50

0.00
2 02 1 2020 2 01 9 2 01 8

A companies DFL represents the riskiness of the capital structure, which includes it dept and equity.
When a company’s fixed financial cost account for a large percentage of its earning, it’s dfl will be
high. The higher the DFL the riskier its capital structure.
 DCL
60.00

50.00

40.00

30.00

20.00

10.00

0.00
2 02 1 2 02 0 2 01 9 2018
-10.00

-20.00

-30.00

A higher level of dcl means the company is facing a higher risk due to impact of sales on earnings the
profit is very low due to a high fixed cost so the company needs to increase sales to make good profit
on the other hand decrease in dcl means the company is having lower risk. Even there is a change in
sales, the EPS will not get a huge impact due to lower sensitivity please help me

ROA
0.30

0.25

0.20

0.15

0.10

0.05

0.00
2 02 1 2020 2019 2 01 8 2017

The ROA of the company is falling so a falling indicates the company might have over invested in
asset that have failed to produce revenue growth
 ROE
0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00
2 02 1 2020 2019 2 01 8 2017

So declining suggest the companies becoming less efficient at creating profit and increasing
shareholder value

A decline in ROCE ROCE

could signal the
0.25
loss of
competitive
advantage 0.20
because ROCE
measure 0.15
profitability in
relation to 0.10
invested capital
Aarushi is 0.05
important for
capital
0.00
intensive 2 02 1 2020 2019 2 01 8 2017
companies order
form that required large upfront investment to start producing goods
 GPM
40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

0.00
2021 2 02 0 2019 2 01 8 2 01 7

As we can see there is a decrease in Gross Profit Margin from 2017 to 2018 that means per product
sold was less and then from 2018 to 2020 there was a rise in the graph that means the company is
making more money on each product sold.

Inventory Turnover Rati o

9000.00
8000.00
7000.00
6000.00
5000.00
4000.00
3000.00
2000.00
1000.00
0.00
2021 2 02 0 2019 2018 2 01 7

From 2017 to 2018 the turnover ratio is high which is good but from 2019 its started decreasing that
means weak sales and possibly excess inventory. It may indicate a problem with the good being
offered for sale or b a result of two little marketing.
 Inventory Turnover Rati o
9000.00
8000.00
7000.00
6000.00
5000.00
4000.00
3000.00
2000.00
1000.00
0.00
2021 2 02 0 2019 2018 2 01 7

Have you can see from 2017 to 2019 there’s a increase in the graph of inventory turnover ratio
which can indicate companies collection of accounts receivable is efficient and the company has a
high promotion of quality customer that pay their debt.

Accounts Payable
18000.00
16000.00
14000.00
12000.00
10000.00
8000.00
6000.00
4000.00
2000.00
0.00
2 02 1 2020 2 01 9 2018 2 01 7

From 2017 to 2019 the graph of accounts payable increases so that signals that a company is paying
it credited and supplier quickly while from 2019 to 2021 the ground decreases that means the
business is slower in paying its bills.
 Cash Cycle
10000.00
8000.00
6000.00
4000.00
2000.00
0.00
2021 2020 2019 2018 2017
-2000.00
-4000.00
-6000.00
-8000.00
-10000.00

Operating Cycle Cash Cycle

So the operating cycle is increasing a bit while the cash cycle is in negative so higher ratio means the
company’s liquidity and finance health is better lower ratio means the company is struggling in
paying its debt.

Asset & Liabiliti es

1.00

0.80

0.60

0.40

0.20

0.00
2021 2020 2019 2018 2017
-0.20

-0.40

Change in Current Asset Change in Current Liabilities

As it can be seen both current assets and current liabilities decreases so any decrease in current
asset is a source of funding which represent a cash inflow and decrease in current liabilities means
cash outflow.
 D/E Rati o

1.21
1.16 1.17
1.04
0.98

2021 2020 2019 2018 2017

High D/E ratio is considered a higher risk to lenders and investors and investors because it suggests
that the companies financing significant amount of its borrowing.

Shareholder Funds

15,350.46 15,727.99

13,127.36
12,260.85 11,957.42

1 2 3 4 5

High shareholder means growth in companies profit

 Non- Current Liabiliti es
10,922.69
10,064.44 9,771.06

8,307.46
7,862.50

1 2 3 4 5

High non-current liabilities means high leverage which increases risk.

Dividend (%)

155 155

130 130 130 130

6/17/2021 7/14/2020 6/4/2019 7/12/2018 8/10/2017 9/7/2016

As the dividend decrease which means week earning or limited funds available to meet their
dividend payments