a n d u

ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS

_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
e a 0 0

25
[SESSION 2
a t]i s b .

lin
B h a n s

B h a n s a li
B
2
h a n s a li 2

2 0 h a n _ n _
a li / S ali a li
a ns d u l i /S h
l i /S h
B h . e s a s a
Balance sheet and Income statement
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.1 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Learning objectives a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
• Get familiar with the layout of real financial nstatements B h a n u u
i h . ed . ed
a l _ B b b
• Perform basic analysis of the balance sheet h l i n t] i s t] i s
/S h a
5 [a 5 [a
u
d statement li/ S 2 2
• Perform basic analysis of the income . e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
• Calculate profitability ratios [a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.2 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h
B . e I / IS
_ s b
Getting familiar with the layout of real financial a lin statementsat]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
Sh Sh
2.3 https://www.drreddys.com/cms/cms/sites/default/files/2023-07/Dr.%20Reddy%E2%80%99s%20Integrated%20Annual%20Report%202022-23_0.pdf
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Balance sheet a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a s s
Assets = Liabilities 25
[a + Shareholders’
lin
B Equity B h a n
B h a n
2 0 a
hSources of funds n _ n _
Uses a li of funds /= S ali a li
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ Balance t]isb Sheet ha n
h an
h a [a B B
S ▪ 2 Contains the accounting
5 lin lin
0 a a
a li2 equation components / S h
/ S h
n s u u
ha ▪ Prepared at a epoint d in e dtime
B . .
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.4 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Balance sheet a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
h n u u
Shows the financial position on a specific date. Alsoliknown n B as statement Bofhafinancial position. . ed . ed
Major components: h a
l i n_
t] i sb t]isb
/ S h a [a [a
▪ Assets u S 5 5
. ed ali/ benefits 2 0 2
2 0 2
▪ Resources expected to provide measurable
s b future s
economic
n a li a li
▪ Must be owned or controlledt] by the companyi h a n s n s
[a B h a h a Resources
▪ Must arise from a past transaction
025 a lin _ B _B
2
▪ E.g. Cash, building,li machinery, inventory, hinvestments, etc.
S li n li n
a / a a
a ns d u l i /S h
l i /S h
▪ Liabilities _Bh . e s a s a
▪ Probable l i n future economic sacrificet] isb – unavoidable ha n
h an
h a [a B B
S
▪ Amount is known or can 5
2 be reasonably estimated alin lin
0 a
▪ Transaction or event
a li2causing the obligation has occurred S h (arises S h from a past transaction)
▪ E.g. Bank loans, n sborrowings, money payable uto /suppliers/ u
/ vendors, etc.
B ha . ed .e d Sources

Equity alin
_
t ] isb t]isb
Sh
▪ Contributed capital is the money2provided 5[a 25in[areturn for equity shares
▪ Earned capital is the cumulative l i 20 earningsl i 20 (profits or loss) retained
n sa n sa
B ha Bha
Accounting equation _ A =inL_+ SE is the basis of the accounting system
i n
h al h al
2.5 S S
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h B . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
Structure of balance sheet a n s a / S / S
B h a n u u
i n h . ed . ed
l B
Assets Assets are resources that
h a a company owns and
l i n_
will use to generate future
t] i sb t]isb
cash inflows or reduce
/ S future cash outflows
h a [a [a
Current assets Assets are expected u to be converted into Scash or consumed within one year 5 5
Current assets . e d- Cash, AR, Inventory, aSTli/investments, Others 2 0 2
2 0 2
s bclassified as current ans a li a li
Non currents assets Assets not i
t] assets – PP&E, Intangibles, h s
n Othersan s
[a
Non-current
5 B Goodwill LT investments,
h a h by
Liabilities 2
Economic obligations of alicompany n to outsiders or Claims against B B
assets
l i 0
2outsiders S ha l i n_ l i n_
Current liabilities n sa Labilities that require / payment within one year ha h a
h a Current liabilities
e d u - AP, short term borrowings, current
a l i/S portiona l i/S of long term
_ B debt, others b . n s n s
i n i s
t] not classified as current Bh a a
Non current
h alliabilities Liabilities
[a B h
S 5
Non-current liabilities
2 claims against an organization's - Long term
lin assets
borrowings,
linor total assets - total liabilities
Others
0 a a
Shareholders equity
a li2 Owners
S h S h
Capital n s Total capital investment inu a /firm byu its/ owners both at the inception of
B ha business and subsequently . ed during .e dequity issuances. It is oftern bifurcated as
i n_ par and additional b in capital
ispaid isb (security premium) Note - this value has
a l t ] t ]
S h nothing to do with
5 [a the5price [a at which the shares are currently traded in the
stock market
0 2 0 2
Retained earnings li 2
The cumulative 2
li income since the inception of the company less diviends
net
s a s a
a n to shareholders.
paid
a n This amount is called as accumulated losses when

B haggregateB hearnings are negative

Others
l i n_ NCI,linAOCI, _ Treasury stock
h a h a
2.6 S S
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Assets a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
n a / S / S
▪ What measurement basis should you useBfor ha asset recognition? a n s u u
i n h . ed . ed
l B
▪ Distinct approaches, depending upon h a the type of asset
l i n_
t] i sb t]isb
/ S h a [a [a
▪ Historical cost u S 5 5
. ed ali/ 2 0 2
2 0 2
▪ The purchase price, s b plus all costs needed n s to make the asset ready a li a li
t] i h a n s n s
for use, minus [aany deductions B
recognized to date (e.g., h a h a
025 a lin _ B _B
depreciation, li 2 impairment)Sh li n li n
a / a a
▪ Reliable, a ns but less relevant d u / not timely l i /S h
l i /S h
B h . e s a s a
_
▪linE.g., long term operating t] isb assets such as PP&E
ha n
h a n
h a [a B B
▪ SFair value 2 5 lin lin
0 a a
a li2 S h
/ by selling/ S h
▪ The price n s that would be obtained u u the asset in an orderly
h a e d e d
transaction
B between market . participants
.
l i n_ t ] isb t]isb
h a▪ More relevant / timely, [a but 5can [a be less reliable
S 2 5 2
▪ E.g., stock prices 2 0
in liquid2 0
a li a li markets are reliable indicators of fair
value. However, n s during n s periods of instability in markets, asset
B ha Bha
classesncan _ become n _ illiquid and market prices less reliable
al i al i
2.7 S h S h
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Assets a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
▪ All accounting assets provide future B h economic a n
benefits, but u u
i n h . ed . ed
l B
not all future economic benefits h a are accounting
l i n_ assets!
t] i sb t]isb
/S h a
5 [a 5 [a
▪ E.g., Internally generated d u intangible /S
liassets, such as 2 2
. e a 2 0 2 0
s b n s a li a li
brands, research[atprojects, ]i technological
h a knowhow, an s n s
5 B h h a
leadership,i2etc. 02 a lin _ B _B
l S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin assets
Not all lieconomic
2 0 assets are a
accounting
h h a
s a / S / S
n u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.8 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Disney’s Balance Sheet a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
Where’s Mickey? t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.9 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Is this an Asset? a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
n a / S / S
• Money expected to be received from previous h a credit sales of n s company’s u u
merchandise n B h a ed ed
l i B . .
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
• Money paid for continuous use u
d of a wireless network li/ S during next five 02 0 2
years b . e s a li 2 li 2
i s an s a s a
[a t] B h a n a n
2 5 l in h
B a _B h
• Money paid for development li 2 0 of an h a
assembly line to mass produce
l i n _
l in
previously tested a
s prototype u / S h a h a
a n d l i /S l i /S
B h . e s a s a
• Amount l i n_claimed in an ongoing t]isb lawsuit as compensationha n a n
h damages
for
h a [a B B
S by a fire
caused 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
• Money spent ha in exploratory scientific ed research e d for a new drug
B . .
l i n_ t ] isb t]isb
a
S h
• Account receivable from a 2client 5[a that 2 5 [ahas not made monthly payments for
a year 2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.10 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Liabilities a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
• All accounting liabilities are obligations, B h but not h a n
all d u d u
l i n B . e . e
obligations are accounting liabilities! h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
– Confirmed orders for u
dgoods to be delivered li/ S later (i.e., 2 2
. e a 2 0 2 0
s b n s a li a li
“executory contracts”). [a t]i
B h a
a n s
a n s
25 lin B h B h
– Indeterminable li 2 0 damages S
a h a
company must pay lif
i n _ it loses
l i n _ a
a
slawsuit. / h a h a
pending a n d u l i /S l i /S
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S They 5
2 are not accountingaliabilities. lin lin
0 a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 5
2Executory 5
2 Contract
2 0 2 0
When the two conditions aressatisfied, ali s
li the transaction that caused the obligation has not
abut
an Nohaliability
occurred.
h
n is reported on balance sheet.
_ B _B
li n li n
a a
2.11 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Liabilities a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
Measurement basis: B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
u li/ S 2 2
• Current liabilities are measured . ed at s a li 2 0
li 2 0
i s b a n s a s a
– the amount owed [a t](e.g., accountsBpayable) h or a n a n
25 lin B h B h
– the amount 2 0 a n _ n _
a li of resources received / S h (e.g., unearnedalrevenue). i a li
a ns d u l i /S h
l i /S h
B h . e s a s a
n _ i s b a n an
• Noncurrent
h a l i liabilities [
]
a are measured at
t B h B h
S 5 n
licash lin
– the presentli2value 02 of expected future h a h a
outflows (e.g., long-
sa or / S / S
term debt) n u u
B ha . ed .e d
– the l i n_PV of expected costt]of isb providing
t ] isb service (e.g., warranty).
a [a [a
Sh 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.12 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Is this a Liability? a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
n a / S / S
• Money payable for services already Bprovided ha by a vendor a n s u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/ S h a [a [a
• Price of an item shipped bydua vendor but not li/ S yet received 2 5 2 5
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B a a
• Employees’ wages25in the following lin accounting period _B h
_B h
2 0 h a n n
a li / S ali a li
a ns d u l i /S h
l i /S h
• Newspaper B h subscriptions.ealready collected s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0
• Cell phone planli2fee received by a cellShphoneShservice provider a a
n sa u
/
u
/
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.13 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Equity a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
• Definition: l i n B h
B h a n
. ed u
. ed u
h a i n_ i sb t]isb
– The residual of assets u
/ Sless liabilities
S h a (SE = A – L). [a
l
5
t]
5 [a
. ed ali/ 2 0 2
2 0 2
• The part of t]the isb firm's financing h a ns that is n s ali
n s ali
[a B h a h a
contributed 025 by shareholders a lin and other _non-
B _B
li 2 S h li n li n
a / a a
a ns
creditors. d u l i /S h
l i /S h
B h . e s a s a
• Two l i n_
types of equity t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
1. Contributed s a li2 capital / S h
/ S h
n u u
2. Earned B ha capital . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
20 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.14 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
Equity a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
1. Contributed Capital B h
h a n d u d u
l i n B . e . e
= Share capital + Contributed h asurplus + Treasury
l i n_ stock t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
b n s li li
• Share capital [at] i s
B h a
a n s a
a n s a
5 lin selling shares. _B h B h
– Amount ofli2capital 02 raisedSfrom h a n n _
a / ali a li
• Valued a nsat selling pricedufor shares without par value. l i /S h
l i /S h
B h . e s a s a
• inValued
_ at par value isb for shares with par value. a n an
a l a t] h h
[ B B
• Contributed
S h surplus
02 5
a lin a lin
i2
lreceived S h S h
• Amount s a from primary owners
/ / excess of par value
in
n
a for shares with par value. d u d u
• Only B h . e .e
n _ s b s b
•
a li Valued at selling priceain t ]i excessa t ]i of par value.
Sh 2 5[ 2 5[
• Treasury shares ali20 ali20
n s n s
• Amount paid h a to repurchase
h a shares by the company
_ B _B
• Valued li nat purchase
li n price (it has a negative balance).
a a
2.15 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h
B . e I / IS
_ s b
Equity a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
2. Earned Capital = Retained earnings B h + AOCIha n u u
i n . ed . ed
l B
a n_ sb t]isb
• Retained earnings (RE): New /S
h equity generated h a l i by profit- [a t] i
[a
u S 5 5
oriented activities reported . ed on the li/
income
a statement not 2 0 2
2 0 2
s b n s a li a li
t] i h a n s n s
yet paid out in dividends [a B h a h a
025 a lin _ B _B
li 2 S h li n li n
RE(EB) a Net income – Dividends
/ a a
a ns = RE(BB)d+ u l i /S h
l i /S h
B h . e s a s a
• [Accumulated
l i n_ other t] isbcomprehensive income ha n
h an
(AOCI):
h a [a B B
S 2 5 lin areanot lin reported in
accumulated changes
li2
0 in equity that
S h a
S h
a
sstatement (to be covered / /
the income h a n d u in
d u later sessions)]
B b. e b .e
n _ s s
a li at ]i a t ]i
Sh 2 5[ 2 5[
l i 20 l i 20
n sa n sa
B ha Bha
l i n_ l i n_
h a h a
2.16 S S
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu Bh . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
Unique features of Indian balance sheetshan sa / S / S
B a n d u d u
l i n B h . e . e
• Under US GAAP / IFRS balance sheet first h a
lists assets, then l i n_
liability followed by t] i sb t]isb
/S h a
5 [a 5 [a
shareholders’ equity. In contrast, thedbalance u sheet underli/S Ind AS first lists assets, then 2 2
. e a 2 0 2 0
equity, and then followed by liabilities. s b n s a li a li
t] i h a n s n s
[a B h a h a
025 a lin _ B _B
• The US GAAP / IFRSlibalance sheets listsSassets
2 h in the descending order n
li of liquidity,li n but
a / a a
Indian balance sheets a ns lists them indthe u ascending order.
l i /S h
l i /S h
B h . e s a s a
l i n_ t] isb a n a n
• Under Ind h a AS, in addition to
5 [a current and non-current,BhassetsBand h liabilities are
S
further categorized asli2financial 02 and non- financial a lin a lin
S h S h
• Financial assets ninclude s a – investments, loans, cash / & cash/ equivalents, accounts receivable, etc.
h a d u d u
• Financial liabilities
B include – borrowings,bbank e
. loans, b e
. accounts payable, etc.
n _ s s
li
• [This classification
a of financial vs non-financial at ]i is specific
a t ]i to Ind AS presentation and should not be confused
h classifications such as in statement
withSother 2 5[ of2cash 5[ flows]
l i 20 l i 20
n sa n sa
B ha Bha
l i n_ l i n_
h a h a
S S
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI
Ind AS Balance sheet of Dr. Reddy's Lab 2022 /I2023 h
ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu
B . e I / IS
_ s b
ASSETS
a lin a t ]i h a
Non-current assets h 5 [ n B
/S 2 l i
Property, plant and equipment 48,869 56,542
s ali l i2 0 h a h
Capital work-in-progress 12,796 9,752
a n a / S / S
Goodwill 5,473 5,474 Bh Reformatted Balance a ns
sheet 2022 2023
d u d u
Other intangible assets 26,873 30,175 l i n ASSETS B h . e . e
Intangible assets under development 138 Sh 549
a Current assets l i n_ t] isb t]isb
4,318 / 4,702 Cash Sh
a [a [a
Investment in equity accounted investees
u 24,192 17,302 5 5
Financial assets
. ed a
Accountsli/ receivable 2
66,764 2072,485 20
2
s b 1668 n s a li 48,670 a li
Investments
t] i 660 a Inventory 50,884
s s
Trade receivables [a 54 0 Bh Short term investments a n
20,173 a n
44,496
25 lin h
B 15,810 h
B 21,302
Other financial assets
2 0 2773 727
a Other current assets
n _ n _
Deferred tax assets, net a li 12,770 Sh 7,052 Total current assets ali a li 2,04,255
1,77,823
ns / h h
Tax assets, net
a u
3,285
d629
2,687 Non-current assets
i /S
l equipment l i /S
Other non-current assets B h . e 276 Property, plant s aand s a 61,665 66,294
n
Total non-currentliassets_ b
is 1,19,646 1,18,596 Goodwill a n an
a t ] h h 5,473 5,474
S h 5 [a n B
Intangibles
n B 27,011 30,724
Current assets 02 l i
aLT investments a l i 5,986 5,362
i 2 h h
Inventories
s al 50,884 48,670 / S Other/ non-current S assets 19,511 10,742
Financial assets
h an e d u
e d u non-current assets
Total 1,19,646 1,18,596
Investments
_ B 20,173 44,496
b. b . TOTAL ASSETS 2,97,469 3,22,851
Trade receivablesli n 66,764t s
]i 72,485 t ]i s
h a [ a [ a
Derivative S
instruments
2 51,906 2 51,232
Cash and cash equivalents & other bank balances
l i 20 24,192 l i 20 17,302
Other financial assets
n sa n sa
1,574 4,950
Other current assets
h a h a 12,330 15,120
Assets held for sale _ B _B -
Total current assets li n li n 1,77,823 2,04,255
a a
2.18
TOTAL ASSETS Sh Sh 2,97,469 3,22,851
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h B . e I / IS
Ind AS Balance sheet of Dr. Reddy's Lab (contin.) 2022 2023 _ s b
Equity a lin a t ]i h a
h 5 [ n B
Equity share capital 832 833 /S 2 l i
Other equity 1,91,292 2,32,028 s ali l i2 0 h a h
Total Equity 1,92,124 2,32,861 a n s a / S / S
h
B Reformatted Balancehasheet n u u
Liabilities
i n 2022 2023
. ed . ed
l B
Non-current liabilities
h a LIABILITIES
l i n_
t]i sb t]isb
Financial Liabilities
/S Current
h a
liabilities
5 [a 5 [a
Borrowings u
3,800
d1,946 1,278
Accounts /S
literm
payable 22,662 22,684
2 2
Other financial liabilities . e a
Short borrowings 27,082i2011,190 i20
s b 258 n s portion of long term debt 1,017 a l 1,004al
Provisions
t]i 199
h a Current
n s n s
Deferred tax liabilities, net
5 [a 14 760 B Other current liabilities
h a46,897 ha50,843
2 l i n B B 85,721
Other non-current liabilities
2 0 1,669 a
2,032 Total current liabilities
n _ 97,658
n _
Total Non-current liabilities a li 7,687 Sh4269 Non-current liabilitiesali a li
ns / h h 5,746 1,278
Current liabilities
a d u Long term borrowings
i /S
l liabilitiesal i /S
Financial Liabilities
B h . e Other non-current
s a s 1,941 2,991
Borrowings in _ b
is 27,082 11,190 a n
Total non-current a n
liabilities 7,687 4,269
a l t] h h
S h
Lease Liabilities
5 [a 1,017 1,004 TOTAL
n B LIABILITIES
n B 1,05,345 89,990
Trade payables
02 0 0
a li ali
Total outstanding dues of SME li 2 125 h
83 S EQUITY S h
s a / /
n
Total outstanding dues of creditors
a
other than SME 22,537 22,601
u Capital
u (Par + APIC) 7,533 7,942
Derivative instruments h 479 ed137 e dRetained earnings 1,60,341 2,00,228
B . .
l i n_
Other financial liabilities 24,832
t ] isb 29,175t ] isb Other 24,250 24,691
a tax, net
Liabilities for current
h [ a5,442 52,143
[ a Total Equity 1,92,124 2,32,861
Provisions S 5
2 5,86602 6,525
0
Other current liabilities
a li2 10,278 a li2 12,863 Liabilities + Total Equity 2,97,469 3,22,851
Total current liabilities n s s
n 97,658 85,721
TOTAL LIABILITIES h a a
h 1,05,345 89,990
B B
TOTAL EQUITY AND LIABILITIES
l i n_ l i n_ 2,97,469 3,22,851
h a h a
2.19 S S
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h
B . e I / IS
_ s b
Basic things to look for in a balance sheet halin [a t ]i
B h a
/S 2 5 l i n
s ali l i2 0 h a h
n a / S / S
Answer the following questions for the most recent year. ha n s u u
n B h a ed ed
l i B . .
h a
l i n_
t] i sb t]isb
1. What are the major assets (top 3) of this company? /S Does this make
hasense, given the nature of
5 [a 5 [a
business? d u li/ S 2 2
. e a 2 0 2 0
PP&E, AR, Inventory
s b n s a li a li
t] i h a n s n s
[a
5 3) of this company? B h a h a
2. What are the major liabilities 2(top
0 a lin _ B _B
2
li AP, Short term borrowings S h li n li n
Other current liabilities, a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
3. What proportion
l i n_ of total assets aret]funded isb by shareholders and what ha nproportion
h an is funded by
non-owners?ha [a B B
S by owners = 232,861
Funded
5
2 / 322,851 = 72% lin lin
0 a a
Funded by non-owners a li2= 89,990 / 322,851 = 28% / Sh / Sh
a ns d u d u
h
Bof assets can be converted intob.cash within e e
. one year?
4. What proportion
n _ i s s b
li
Currentaassets / Total assets = 204,255[a/t]322,851 a t ]=i 63%
Sh 2 5 2 5[
5. What proportion of liabilities need l i 20be repaid
to l i 20 within one year?
a a
ns
Current liabilities / Total aliabilities a n= s85,721 / 89,990 = 95%
B h B h
n _ n _
a li a li
2.20 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
a lin a t ]i h a
Statement of Changes in Equity h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
▪ Explains the changes in total equityn (on h
B the balance h
n
asheet) and its ed u
ed u
l i B . .
components, over a period of time. h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.21 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu Bh . e I / IS
_ s b
a lin a t ]i h a
Income Statement h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
Major components of income statement B h a n u u
i n h . ed . ed
l B
h a
l i n_
t]i sb t]isb
Revenue /S h a
5 [a 5 [a
u
d by the sale of products S
li/ or providing of services over 2 a 02
▪ a measure of economic benefits generated e a 2 0
period of time s b . n s ali a li2
a t]i h a n s n s
▪ this leads in an increase in net5[assets (assets - liabilities)
2 l i nB B ha Bha
l i 20 S ha l i n_ l i n_
Expenses sa / h a h a
n
a sacrifices incurred d u l i/S period l i/S
▪ a measure of economic
B h . e to “earn” the revenues of sa a given s a
_
this leads tolina decrease in net assets i s b a n a n
▪
a [a t] (assets - liabilities)
B h B h
h 5
S
0 2 a lin a lin
Gains / losses
a li2 S h
/ than main S h
/ operations of business
▪ Increase (decrease) nins net assets due to activities other
ha d u d u
B . e .e
Net income = Revenue
l i n_ + Gains – Expenses -]iLosses
t sb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.22 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu Bh . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
Structure of the income statement h n u u
n B h a ed ed
l i B . .
Indian income statement h aUS GAAP / IFRS income
l i n_ statement
t] i sb t]isb
Income / S Net sales h a
5 [a 5 [a
Net sales d u - Cost of goods S
li/ sold 2 2
. e a 2 0 2 0
+ Other income s b = Grossnprofit s a li a li
t]i a
h general and adminsitrative s
n expenses n s
Total income [A] [a - Selling
B h a h a
025 a-lin Research & development expenses _ B _B
Expenses li 2 S h - Other operating expenses li n li n
a / a a
Change in inventory
a ns d u Operating profit
l i /S h
i /S h
l other expenses
B
Material consumedh . e Add/less -Other income s a a
less
s
Wageslin
_
and salaries t]isb ha n
h an
h a [a B B
Depreciation
S and 5
amortization
2 expenses lin lin
Selling and administrative
i2 0 h a h a
Other expensess a l / S / S
n u u
Interest expense
B ha . ed .e d
l i n_
Total expenses [B]
t ] isb t]isb
h a [a [a
S
Profit before tax [ A - B] 2 5 5
2 Profit before tax [ A - B]
2 0 2 0
Less - Tax
s ali s ali Less - Tax
Profit after Tax
h an han Profit after Tax

_ B _B
EPS [ PAT / number n
li of shares] li n EPS
a a
2.23 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu Bh . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
Unique features of Ind AS income statement
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
• In the US/IFRS Income statement expenses
/ S are categorized hbased a
5 [a 5 [a
d u li/ S on the function such 2 as 2
. e a 2 0 2 0
COGS, SG&A, R&D, etc.
s b n s a li a li
• In contrast, in India expenses i
t] are categorized based a
h in the nature of expenses s
n such s
n as
[a
5 salaries & wages, B h a h a
material consumed, excise2duty,
0 a lin depreciation, etc. _ B _B
li 2 S h li n li n
s a / h a h a
• Implications of this a nstructure d u l i /S l i /S
B h . e s a s a
_
• In thelinIndian income statement,
t]isb the individual expenses a nare notanbroken down into the
hversusBoffice h and sales employees
h a
components [
relating to 5factorya employees and equipment B
S
and equipment. Hence, 02 we cannot figure out cost a linof goods a lin sold (which include only
factory costs). sal
i2 S h S h
n / /
• Conversely,hin a the US/IFRS approach total u
d employee u
d costs or total depreciation are not
B . e .e
l i n_
determinable from the income statement
t ] isb t]isas b they have been apportioned between
h a
manufacturing [a
and selling & administration [a and reported under those categories after
S 2 5 5
2 the same category.
being combined with other2expenses 0 2 0 in
s ali s ali
h an han
_ B _B
li n li n
a a
2.24 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h B . e I / IS
Income Statement as per Ind AS 2022 2023 _ s b
a lin a t ]i h a
Sales 2,05,144 2,34,595 h 5 [ n B
/S 2 l i
Service income and License fees 9,247 11,284
s ali l i20 ha Sh
Other operating income 1,061 818 n
a s a / S /
Total revenue from operations B
2,15,452 2,46,697 h a n u u
i n h . ed . ed
4,844al 10,555 B
Other income
h l i n_
t]i sb t]isb
Total income /S
2,20,296 2,57,252
h a
5 [a 5 [a
Expenses
d u li/S 2 2
Cost of materials consumed . e a
43,124 42,198 nsReformatted income statement 2 0
2022li 2023 li 2 0
i s b a s a sa
Purchase of stock-in-trade t] 34,837 h
33,670 Sales n
2,15,452 n
2,46,697
[a
5stock-in-trade -3,539 lin 709
B ha Bha
Changes in inventories of finished goods, work-in-progress2and Less: Operating expenses B
Employee benefits expense l i 20 ha 46,466
38,858
S Material cost l i n_ l i _
n74,422 76,577
a / a a
Depreciation and amortisation expense
a ns u 11,652 12,502
d 9,304 699
Employee expenses
l i /S h
l i /S h 38,858 46,466
Impairment of non-current assets B h . e s
Depreciation a s a
and amortization 11,652 12,502
_ s b n n
Finance costs
a lin a t]i 958 1,428 ha lossesha
Impairment 9,304 699
h 5 [ B
55,191 59,465 in Selling andin B
Selling and otherS expenses 2 l l other expenses 55,191 59,465
Total expenses l i 20 1,90,385 1,97,137ha Operating
S S hamargin (EBIT) 26,025 50,988
Profit before tax and share of equitynaccounteds a investees 29,911 60,115/ / Interest
Less: 958 1,428
a
h investees, net of tax u u
d 370.ed Add / Less: Other income / (expenses) net 5,547 10,925
Share of profit of equity accountedB b . e
703
Profit before tax lin_ t ] is30,614 t] isb
60,485 Pretax profit (EBT) 30,614 60,485
Tax expense Sh a [a [a Less: Tax 8,789 15,412
2 5 2 5
Current tax
l i 20 l i 2011,013 8,144 Net income (PAT) 21,825 45,073
Deferred tax
n sa n sa -2,224 7,268
Profit for the year
B ha Bha 21,825 45,073
l i n_ l i n_
h a h a
2.25 S S
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
Income Statement as per IFRS s ali 2022 2023
l i2 0 h a h
Revenues a n 2,14,391 n2,45,879 sa / S / S
B h a 1,06,536 u u
Cost of revenues i n 1,00,551 h . ed . ed
l B
Gross profit h a
l i
1,13,840n_ 1,39,343 t] i sb t]isb
Selling, general and administrativeuexpenses /S h a62,081 68,026
5 [a 5 [a
d S
li/ 17,482 19,381 2 2
. e a 2 0 2 0
Research and development expenses
s b n s a li a li
Impairment of non-current tassets ]i h a 7,562 699n s n s
[a B h a h a
Other income, net
025 a lin -2,761 -5,907
_ B _B
Total operating expenses li 2 S h n
84,364 ali 82,199ali n
a /
ns
Results fromaoperating activities (A)u
d 29,476
l i /S h 57,144
l i /S h
Finance B h
income . e s a
3,077 s a 4,281
i n _ i s b a n an
al expense
Finance [a t] B h -958 B h -1,428
h 5
S
Finance income, net (B) 02 a lin alin2,119 2,853
Share of profit ofaequity li 2 accounted investees, net/ of h
S tax (C) S h 703 370
s
n [(A)+(B)+(C)] /
Profit before h atax d u d u 32,298 60,367
B . e .e
l i n_ net
Tax expense,
t ] isb t]isb 8,730 15,300
a for the year
Profit
h [a [a 23,568 45,067
S 2 5 2 5
2 0 2 0
Earnings per share: s ali s ali
Basic earnings per share h an of rupee h an 5/- each 142.08 271.43
B
_ share B
Diluted earnings l i nper l i n_of rupee 5/- each 141.69 270.85
a a
2.26 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
*From Form 20-F filed with the US
_ B SEC _B
li n lin
a a
2.27 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu hB . e I / IS
_ s b
Basic things to look for in an income statement a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
Answer the following questions for the most recent year. ha n s a / S / S
B a n d u d u
l i n B h . e . e
1. How much does the company generate from itshcore a operations ? in_
l t]i sb t]isb
Total revenue from operations = 246,697 /
S h a [a [a
u S 5 5
. e d ali/ 2 0 2
2 0 2
2. Have the sales grown in the most]recent i s b year? (For FY 2022) ans s ali s ali
Sales growth = (246,697 – 215,452) [a t / 215,452 = 15% B h a n a n
25 lin B h B h
2 0 a n _ n _
3. When does the company a li recognize revenue/?Sh ali a li
Refer to revenue a ns
recognition footnote d u l i /S h
l i /S h
B h . e s a s a
l i n_ t ] isb ha n
h an
h a [a B B
4. WhereSdo the sales come from
5
2 ? (i.e. which products, which lin geographies?)
lin
0 a a
Refer to revenue recognition a li2 footnote / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] i sb t]isb
5. What arehathe major expense heads for this [ a company [ a ? (For FY 2022)
S costs, employee expenses, 2SG&A 2
Material 5 5
l i 20 l i 20
s a s a
6. Is the firm profitable? n n
YES. Refer to profitability B haratios.Bha
l i n_ l i n_
h a h a
2.28 S S
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI
Revenue recognition footnotes (page /I ShIaliIn
313-314) B h
BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.29 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
B h a n u u
i n h . ed . ed
l B
h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.30 Sh Sh
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Segment reporting footnote (page 338-339)
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
a lin a t ]i h a
Segnemt wise revenue breakup h 5 [ n B
/S 2 l i
Product category 2022 % 2023 % ali
Geography
s 2022 li2%0 2023 % h a h
n a / S / S
Global generics 1,79,170 84% 2,13,768 87% ha India 43,986
n s 21% 50,499 21%
B United States h a 38% 1,06,683 43% d u d u
PSAI 30,740 14% 29,069 12% l i n B80,564 . e . e
Others 4481 2% 3042Sha1% Russia l i n_ 20,879 10% 21,228 9% t]isb t]isb
/ 100% Others ha 5 [a 5 [a
Total 2,14,391 100% 2,45,879
d u li/ S 68,962 32% 67,469
227%
2
. e a 2 0 20
s b Total
n s 2,14,391 100%
a li
2,45,879 100%
a li
t] i h a n s n s
[a B h a h a
Further breakup of generics
025%
2022 2023 % lin
a _ B _B
Oncology i 2
l17,051 10% 48,671Sh23% li n li n
a / a a
Nervous System
a ns 26,159 15% d27,888 u 13%
i /S h
i /S h
Pain Management B h 18,437 10%b.e 23,585 11% s al s al
_ is 23,439 11% n n
Gastrointestinal alin 23,386 t13% ] ha h a
h 5 [a B B
Respiratory S 15,085
02 8% 17,074 8%
a lin a lin
Anti-Infective
a i2
l22,526 13% 17,066 8% Sh S h
Cardiovascular n s 14,856 8% 16,187 8%
/ /
ha 11,737 d u d u
Hematology B 7% 10,317b.e 5% b.e
_ is 3%t]is
Dermatology alin 6,797 4% t ]
6,749
NutraceuticalsS
h 4,530
[a
3%25 5,876 25 3%
[a
Others 18,606 l10% i 20 16,917 l i 20 8%
Total 1,79,170 n sa100% n2,13,768
sa 100%
h a h a
_ B _B
li n li n
a a
2.31 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu h
B . e I / IS
_ s b
Profitability analysis a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
h
B profit = Sales - COGS a n u u
1. Gross profit margin = Gross profit / Sales; where Gross i n h . ed . ed
l B
High ratio indicates some combination of higherShproduct a pricing and lilow n_ product costs. This is t]isb t]isb
/ h a [a [a
determined by competitive advantage of the firm u S 5 5
. ed a li/ 2 0 2
20 2
s b profit / Sales; where n s a li a li
2. Operating profit margin = Operating t] i h a typically Operating profit =
n sEBIT n s
[a
An operating margin increasing25faster than gross margin B h a h a
0 a lin indicates improvements
_ B in controlling
_B
operating costs (e.g. SG&A) li2
S h li n li n
a / a a
a ns d u l i /S h
l i /S h
3. Pretax margin = B h / Sales
EBT . e s a s a
i n_ the effect of leverage
This ratio also reflects
l t] isb and non-operating income ha n / expenses.
h an Pretax margin
a [a indicates increase in non-operating B Bincome, which might be
Sh than operating margin
increasing faster
2 5 li n li n
non-recurring in nature. 2 0 h a h a
a li / S / S
n s u u
4. Net profit margin = h aNet income / Sales e d e d
_ Bhow much of each dollar inb.revenueb.collected by a company translates into
This ratio indicates
li n t ] is t ] is
a
profit. In otherh words, does the company generate [a enough [a revenue to cover ALL costs.
S 2 5 2 5
2 0 2 0
li ali in the M&A and restructuring context, and in
Note – in some settings such nas savaluation s
credit agreements, EBITDA h ais a used h ana profit metric to loosely proxy for operating cash
_ B _B
flows (not without controversy li n n
li – pushback from the likes of Buffet and Munger)
a a
2.32 Sh Sh
 a n d u
ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu Bh . e I / IS
in _ s b
a lRatios a t ]i h a
Reformatted income statement Profitability
h 5 [ n B
/S 2 l i
2022 2023 sali 2022
i2 0 2023 h a h
n a l / S / S
Sales 2,15,452 2,46,697haSales growth n s 13% 15%
B h a d u d u
Less: Operating expenses l i n B . e . e
h a
l i n_
t] i sb t]isb
Material cost 74,422 /S 76,577 Gross margin
h a 53% 57%
5 [a 5 [a
Employee expenses u
d38,858 46,466 ali/ S 2 2
. e 2 0 2 0
Depreciation and amortization s b 11,652 12,502 ans a li a li
t] i h n s n s
Impairment losses [a 9,304 B
699 h a h a
025 a l in _ B _B
Selling and other expensesli2 55,191 h 59,465
S li n li n
a / a a
Operating margin (EBIT)
a ns 26,025
u
d 958
50,988 EBIT margin /Sh
l i i /S
l 17%
h
12% 21%
Less: Interest _Bh b . e 1,428 EBITDA margin
s a s a 26%
s n n
lin income / (expenses)
Add / Less: aOther a t i
]net 5,547 10,925 ha h a
h 5[ B B
PretaxS profit (EBT) 02 30,614 60,485 Pretax a lin margina lin 14% 25%
li 2 S h S h
Less: Tax s a 8,789 15,412 / /
Net income (PAT) h an 21,825 .ed45,073u
e d
Netu margin 10% 18%
B .
Check l i n_ t ] is0b t]isb0
a [a [a
COGS Sh 2 5
1,00,551 2 51,06,536
2 0 2 0
EBITDA (EBIT + DA)
s ali s ali
37,677 63,490
h an han
_ B _B
li n li n
a a
2.33 Sh Sh
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ShaIlinI_BhIansIaliI202I5[aIt]iIsb.IeduI /I ShIaliIn BIhanIsalIi/SIhalIin_IBhaInsaIli2I025I[atI]isIb.eIdu B h . e I / IS
_ s b
a lin a t ]i h a
h 5 [ n B
/S 2 l i
s ali l i2 0 h a h
a n s a / S / S
Next session B h a n u u
i n h . ed . ed
l B
• Statement of cash flows h a
l i n_
t] i sb t]isb
/S h a
5 [a 5 [a
d u li/ S 2 2
. e a 2 0 2 0
s b n s a li a li
t]i h a n s n s
[a B h a h a
025 a lin _ B _B
li 2 S h li n li n
a / a a
a ns d u l i /S h
l i /S h
B h . e s a s a
l i n_ t]isb ha n
h an
h a [a B B
S 2 5 lin lin
0 a a
a li2 / S h
/ S h
n s u u
B ha . ed .e d
l i n_ t ] isb t]isb
h a [a [a
S 2 5 2 5
2 0 2 0
s ali s ali
h an han
_ B _B
li n li n
a a
2.34 Sh Sh