FINANCIAL ANALYSIS OF SHREE

NAKODA TILES
INTRODUCTION TO SHREE NAKODA TILES AND
MARBLES PVT LTD
Shree Nakoda Tiles and Marbles Pvt Ltd is a leading manufacturer and
supplier of high-quality tiles and marble products in India. Established in
1995, the company has grown to become a prominent player in the domestic
construction and home improvement market, known for its innovative
designs, durable products, and commitment to customer satisfaction.

The company's core business operations revolve around the production and
distribution of a diverse range of tiles, including ceramic, porcelain, and
natural stone tiles, as well as a selection of premium marble products. With
state-of-the-art manufacturing facilities and a strong distribution network
across the country, Shree Nakoda Tiles and Marbles Pvt Ltd has established a
significant market presence, catering to the needs of both residential and
commercial customers.

The financial statements of Shree Nakoda Tiles and Marbles Pvt Ltd provide
valuable insights into the company's performance, financial health, and
growth trajectory. By analyzing the income statement, balance sheet, and
cash flow statement, stakeholders can gain a comprehensive understanding
of the company's revenue generation, cost management, asset utilization,
and overall financial stability. This financial analysis is crucial for making
informed decisions, whether it's for investment, strategic planning, or
operational optimization.

INCOME STATEMENT ANALYSIS (2021-2023)

The income statement is a critical financial statement that provides a detailed
overview of a company's financial performance over a specific period. By
analyzing the income statement, we can gain valuable insights into Shree
Nakoda Tiles and Marbles Pvt Ltd's revenue generation, expense
management, and profitability.
In the case of Shree Nakoda Tiles and Marbles Pvt Ltd, the income statement
data for the years 2021 to 2023 is as follows:

Item 2021 2022 2023

Revenue ₹70,00,000 ₹84,00,000 ₹98,00,000

Expenses ₹56,00,000 ₹66,50,000 ₹77,00,000

Net Income ₹14,00,000 ₹17,50,000 ₹21,00,000

Revenue represents the total sales generated by the company from its core
business activities, which in this case is the sale of tiles and marble products.
The revenue has shown a consistent increase over the three-year period,
growing from ₹70,00,000 in 2021 to ₹98,00,000 in 2023, a remarkable 40%
increase.

Expenses include the costs associated with the company's operations, such as
raw materials, labor, manufacturing overhead, and administrative expenses.
The expenses have also increased over the years, from ₹56,00,000 in 2021 to
₹77,00,000 in 2023, a 37.5% increase. This increase in expenses is likely due to
the company's expansion and the associated costs of scaling up its
operations.

Net Income, which is the difference between Revenue and Expenses,

represents the company's profitability. The net income has grown from
₹14,00,000 in 2021 to ₹21,00,000 in 2023, a 50% increase. This trend indicates
that Shree Nakoda Tiles and Marbles Pvt Ltd has been able to effectively
manage its expenses and maintain a strong profit margin, despite the
increase in operating costs.

The comparative analysis of the income statement over the three-year period
suggests that Shree Nakoda Tiles and Marbles Pvt Ltd has experienced
consistent growth in both revenue and profitability. This is a positive sign, as
it demonstrates the company's ability to capitalize on market opportunities
and efficiently manage its operations.

BALANCE SHEET ANALYSIS (2021-2023)

The balance sheet is a crucial financial statement that provides a snapshot of
a company's financial position at a specific point in time. It presents the
company's assets, liabilities, and shareholders' equity, allowing stakeholders
to assess the company's financial health, liquidity, and solvency.
For Shree Nakoda Tiles and Marbles Pvt Ltd, the balance sheet data for the
years 2021 to 2023 is as follows:

Assets:

• In 2021, the company's total assets stood at ₹1,40,00,000. This includes

current assets, such as cash, accounts receivable, and inventories, as
well as non-current assets, like property, plant, and equipment.
• By 2022, the total assets had increased to ₹1,75,00,000, indicating that
the company had invested in expanding its operations and acquiring
more assets to support its growth.
• In 2023, the total assets further increased to ₹2,10,00,000, reflecting the
company's continued investments and asset accumulation to cater to
the growing demand for its products.

Liabilities:

• The company's total liabilities in 2021 stood at ₹56,00,000, which include

short-term and long-term debt, accounts payable, and other current
liabilities.
• In 2022, the total liabilities increased to ₹63,00,000, suggesting that the
company had taken on additional debt or financing to support its
expansion.
• By 2023, the total liabilities had reached ₹70,00,000, indicating a further
increase in the company's debt or other financial obligations.

Equity:

• Shree Nakoda Tiles and Marbles Pvt Ltd's shareholders' equity in 2021
was ₹84,00,000, reflecting the capital contributed by the owners and the
company's retained earnings.
• In 2022, the equity increased to ₹1,12,00,000, suggesting that the
company had either raised additional equity capital or generated more
profits, which were retained in the business.
• By 2023, the equity had grown to ₹1,40,00,000, demonstrating the
company's ability to generate and retain earnings, as well as potentially
raise additional equity financing.

The analysis of the balance sheet over the three-year period indicates that
Shree Nakoda Tiles and Marbles Pvt Ltd has been steadily expanding its asset
base, primarily financed through a combination of increased liabilities and
equity. The growth in assets, coupled with the increase in equity, suggests
that the company has been able to reinvest its profits and potentially raise
additional capital to support its expansion plans.

The increase in liabilities, on the other hand, indicates that the company has
been leveraging debt to finance its growth. While this can be a strategic
move, it is important for the company to manage its debt levels and ensure
that its debt-to-equity ratio remains within a healthy range to maintain
financial stability and minimize the risk of default.

Overall, the balance sheet analysis provides valuable insights into Shree
Nakoda Tiles and Marbles Pvt Ltd's financial position, highlighting the
company's asset base, financing structure, and the changes in its financial
position over the three-year period.

CASH FLOW STATEMENT ANALYSIS (2021-2023)

The cash flow statement is a critical financial document that provides insights
into a company's ability to generate and utilize cash. It helps stakeholders
understand the sources and uses of cash, which is essential for evaluating a
company's liquidity, solvency, and overall financial health.

In the case of Shree Nakoda Tiles and Marbles Pvt Ltd, the cash flow
statement data for the years 2021 to 2023 is as follows:

Operating Cash Flows:

• In 2021, the company's operating cash flows were ₹21,00,000. This

represents the cash generated from the company's core business
activities, such as the sale of tiles and marble products, after accounting
for operating expenses.
• In 2022, the operating cash flows increased to ₹28,00,000, indicating
that the company was able to generate more cash from its operations.
• By 2023, the operating cash flows further increased to ₹35,00,000,
suggesting that the company's operational efficiency and profitability
had improved over the three-year period.

Investing Cash Flows:

• The investing cash flows represent the cash used or generated from the
company's investment activities, such as the purchase or sale of
property, plant, and equipment.
 • In 2021, the investing cash flows were negative ₹7,00,000, indicating
that the company had invested in capital expenditures to support its
growth.
• In 2022, the investing cash flows increased to negative ₹10,50,000,
reflecting the company's continued investments in its operations.
• By 2023, the investing cash flows further increased to negative
₹14,00,000, suggesting that the company was allocating more resources
towards expanding its asset base and infrastructure.

Financing Cash Flows:

• The financing cash flows represent the cash generated or used in the
company's financing activities, such as the issuance or repayment of
debt, or the payment of dividends.
• In 2021, the financing cash flows were negative ₹3,50,000, indicating
that the company had made payments towards its debt or other
financing obligations.
• In 2022, the financing cash flows increased to negative ₹7,00,000,
suggesting that the company had taken on additional debt or made
larger debt repayments.
• By 2023, the financing cash flows further increased to negative
₹10,50,000, reflecting the company's continued focus on managing its
financing activities, potentially through debt repayment or the
distribution of dividends.

The analysis of the cash flow statement provides several insights into Shree
Nakoda Tiles and Marbles Pvt Ltd's financial performance and cash
management:

1. Operating Cash Flows: The consistent increase in operating cash flows

over the three-year period is a positive sign, as it indicates that the
company's core business activities are generating more cash, which can
be used to fund investments, repay debt, or distribute to shareholders.

2. Investing Cash Flows: The increasing negative investing cash flows

suggest that the company is actively investing in its operations, likely
through the acquisition of new equipment, expansion of production
facilities, or other capital expenditures. This investment in the
company's asset base is crucial for supporting its long-term growth and
competitiveness.

3. Financing Cash Flows: The increasing negative financing cash flows may
indicate that the company is focusing on reducing its debt levels or
 distributing more cash to its shareholders. This could be a strategic
move to improve the company's financial structure and strengthen its
balance sheet.

Overall, the cash flow statement analysis demonstrates that Shree Nakoda
Tiles and Marbles Pvt Ltd has been able to generate strong operating cash
flows, which it has been reinvesting in its operations and managing its
financing activities. This suggests that the company has a solid financial
foundation and is well-positioned to continue its growth trajectory.

REVENUE AND PROFITABILITY TRENDS

The financial data provided for Shree Nakoda Tiles and Marbles Pvt Ltd shows
a consistent and positive trend in both revenue and profitability over the
three-year period from 2021 to 2023.

Revenue Growth:

• The company's revenue has grown from ₹70,00,000 in 2021 to

₹98,00,000 in 2023, representing a remarkable 40% increase over the
three-year period.
• This growth in revenue can be attributed to the company's ability to
capitalize on the increasing demand for its tiles and marble products in
the domestic market, as well as its efforts to expand its distribution
network and introduce new product offerings.

Profit Margin Analysis:

• The company's net income has grown from ₹14,00,000 in 2021 to

₹21,00,000 in 2023, a 50% increase.
• Analyzing the profit margins, we can see that the company's net profit
margin has improved from 20% in 2021 to 21.43% in 2023, indicating
that the company has been able to effectively manage its expenses and
maintain a strong profitability profile.
• The increase in profit margins can be attributed to the company's ability
to leverage its operational efficiencies, optimize its cost structure, and
potentially benefit from economies of scale as it has grown its business.

Factors Contributing to the Trends:

• The growth in revenue can be attributed to several factors, including:

◦ Increasing demand for tiles and marble products in the domestic
construction and home improvement market
 ◦ Expansion of the company's distribution network and reach
◦ Diversification of product offerings to cater to changing customer
preferences
◦ Effective marketing and branding strategies to enhance the
company's visibility and reputation
• The improvement in profitability can be attributed to:
◦ Efficient cost management and optimization of operational
expenses
◦ Leveraging economies of scale as the company's production and
sales volumes have increased
◦ Effective pricing strategies and the ability to maintain competitive
pricing while maintaining healthy profit margins
◦ Continuous investments in modernizing and upgrading the
company's manufacturing facilities to enhance productivity and
efficiency

The analysis of the revenue and profitability trends for Shree Nakoda Tiles
and Marbles Pvt Ltd suggests that the company has been able to deliver
consistent growth and maintain a strong financial performance over the
three-year period. This positive trend indicates that the company is well-
positioned to capitalize on the ongoing opportunities in the tiles and marble
industry and continue its growth trajectory in the coming years.

ASSET AND LIABILITY MANAGEMENT

The analysis of Shree Nakoda Tiles and Marbles Pvt Ltd's financial statements
from 2021 to 2023 provides valuable insights into the company's asset and
liability management practices.

Current Ratio The current ratio is a key metric that measures a company's
ability to meet its short-term obligations using its current assets. It is
calculated by dividing the total current assets by the total current liabilities.

In the case of Shree Nakoda Tiles and Marbles Pvt Ltd:

• 2021 Current Ratio: ₹1,40,00,000 / ₹56,00,000 = 2.50

• 2022 Current Ratio: ₹1,75,00,000 / ₹63,00,000 = 2.78
• 2023 Current Ratio: ₹2,10,00,000 / ₹70,00,000 = 3.00

The company's current ratio has consistently improved from 2.50 in 2021 to
3.00 in 2023, indicating that the company's ability to meet its short-term
obligations has strengthened over the years. A current ratio above 1.0 is
The income statement analysis showcased the company's consistent revenue
growth, from ₹70,00,000 in 2021 to ₹98,00,000 in 2023, a remarkable 40%
increase. This growth was accompanied by a corresponding increase in
profitability, with the company's net income rising from ₹14,00,000 in 2021 to
₹21,00,000 in 2023, a 50% improvement. These positive trends indicate that
Shree Nakoda Tiles and Marbles Pvt Ltd has been able to effectively manage
its operations, control expenses, and capitalize on the growing demand for its
products in the domestic market.

The balance sheet analysis highlighted the company's steady asset growth,
from ₹1,40,00,000 in 2021 to ₹2,10,00,000 in 2023, reflecting its investments
in expanding its production capacity and infrastructure. The company has
also managed its financing structure, reducing its debt-to-equity ratio from
0.67 in 2021 to 0.50 in 2023, which suggests a stronger financial position and
reduced reliance on debt financing.

The cash flow statement analysis revealed that Shree Nakoda Tiles and
Marbles Pvt Ltd has been generating robust operating cash flows, which have
increased from ₹21,00,000 in 2021 to ₹35,00,000 in 2023. This indicates the
company's ability to convert its sales into cash, providing it with the necessary
liquidity to fund its investments and manage its financing activities.

Overall, the financial analysis paints a positive picture of Shree Nakoda Tiles
and Marbles Pvt Ltd's performance and financial health. The company has
demonstrated consistent growth in revenue and profitability, a strengthening
asset base, and an improving financial structure, all of which suggest a
promising future outlook.

Looking ahead, the company's continued focus on product innovation,

market expansion, operational efficiency, and prudent financial management
will be crucial in maintaining its competitive edge and capitalizing on the
growth opportunities in the tiles and marble industry. With its strong financial
foundation and strategic initiatives, Shree Nakoda Tiles and Marbles Pvt Ltd is
well-positioned to sustain its growth trajectory and solidify its position as a
leading player in the domestic construction and home improvement market.