ANALYSIS Of VOGC, NPPC & EGAT

By: Arpit Tondon Rohit Bedi Shamik Das Shefali Bansal Shriya Beri Utsab Basu

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VOGC

Current ratio = 3.5 CA> CL Quick ratio = 2.2 Company in comfortable liquidity position Long term liabilities account for 93.58% of the total liabilities Total debt accounts for 13.06% of the total liabilities Internal measure: (CA/Average daily operating expenses) is 380.33, which is good.

Interest coverage ratio is 50.75 times. Good 4/13/12 interest paying capacity

VOGC Cont

Inventory holding period is 147.07 days Collection period is 39.7 days Net profit margin is highest among all the three companies at 19% Return on Equity is also the highest among all the three companies at 18% Highest (Net Working Capital/Total assets ) at 0.16

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NPPC

Current ratio = 1.42 CA> CL Quick ratio = 1.23 liquidity position Company in comfortable

Long term liabilities account for 80.54% of the total liabilities Total debt accounts for 44.76% of the total liabilities Interest coverage ratio is 2.2 times.

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NPPC Cont

Inventory holding period in days is 40.52 days Collection period is 46.21 days Net profit margin is 10% Return on Equity is 8% Net Working Capital/Total assets 0.08 at

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EGAT

Current ratio = 0.82 , CA< CL Quick ratio is also less than 1 , 0.74 Total debt accounts for 73.17% of the total liabilities Negative working capital Cash ratio ( Cash/ CL) is 0.32 Interest coverage ratio is 0.53, EBIT < Interest .

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EGAT Cont

Inventory holding period in days is 19.8 days Collection period is 68.06 days Net profit margin is -0.18. Negative figure indicates that the company is making losses. Return on Equity is also negative

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Comparisons

VOGC heavily dependent on Long term liabilities, (93.58% of total liabilities) VOGC most conservative wrt capital structure, only 13.06% debt, 86.94% equity While VOGC uses cash majorly to finance its working capital, NPCC uses short term investments. EAGT uses recievables for the same. COGS is largest for EGAT at 76.2% .

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Comparison Cont

VOGC is most efficient in operations and NPCC least efficient. Based on operating expenses. Among all the companies, long term investments have had only marginal impact on the companys performance. VOGC is expanding as we see construction in progress in its balance sheet.

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DU PONT ANALYSIS
ROE = Net profit margin* Asset Turnover Ratio * Equity Multiplier VOGC: ROE= 0.19*0.47*2.03 = 0.18 = 18% NPCC: ROE= 0.10*0.44*1.96 = 0.086= 8.6% EAGT: ROE= -0.18*0.34*3.72= -0.23 which is negative. Indicates loss.
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THANK YOU
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