INTRODUCTION:

Financial Statement Analysis:

Financial statement analysis evaluates a company’s performance or value through a company’s
balance sheet, income statement, or statement of cash flows. By using a number of techniques such
as horizontal, vertical, or ratio analysis, investors may develop a more enhanced picture of a
company’s financial profile. The financial statements of a company record important financial data
on every aspect of a businesses activities. As such they can be evaluated on the basis of past,
current, and projected performance.

In general, financial statements are centred around generally accepted accounting principles
(GAAP) in the U.S. These principles require a company to create and maintain three main financial
statements. The balance sheet, the income statement, and the cash flow statement. Public companies
have stricter standards for financial statement reporting. Public companies must follow GAAP
standards which requires accrual accounting.

1. Private companies have greater flexibility in their financial statement preparation and
also have the option to use either accrual or cash accounting.
2. Several techniques are commonly used as part of financial statement analysis.

3. Three of most important techniques include horizontal analysis, vertical analysis, and
ratio analysis.
4. Horizontal analysis compares data horizontally, by analysing values of line items across
two or more years.
5. Vertical analysis looks at the vertical affects line items have on other parts of the business
and also the business proportions.
Ratio analysis uses important ratio metrics to calculate statistical relationships. To analyse the
performance and manage the growth of a company, financial statements are a handy tool.
A Financial Statement is a summary document drawn up periodically. Information on
performance, financial and accounting situation, and the development of a company from one
accounting year to the next appears.

It is a presented in an organised and standardized manner and is based on the following concepts
and obligations.

1. Faithful image and complaint with IFRS (International Financial Reporting Standards,
which have been the accounting standards applicable to companies listed on the European
market since 2005).
 2. The financial statements must be structured and presented in a clear manner and in
accordance with the transactions and the facts.

Going concern:

Financial statements must be prepared on the assumption that the company will continue its
activities for an indefinite period.

Commitment period:

Expenses and income must be allocated to the period during which they were incurred and
attach these funds at close.

Meaning of Financial Statement Analysis:

The term ‘Financial Analysis’, also known as analysis and interpretation of financial statement
refers to the process of determining financial strengths and weakness of the firm establishing
strategic relationship between the items of the balance sheet, profit and loss account and other
operative data.
Analysing financial statements, “According to Metcalf and Titard, is a process of ealuating the
relationship between component parts of a financial statement to obtain a better understanding of
a firm’s position and performance.’
In the words of Myers, “financial statement analysis is largely a study of relationship among
the various financial factors in a business a disclosed by a single set- of statements and a study of
the trend of factors as shown in a series of statements”.

The purpose of financial analysis is to diagnose the information contained in financial statements
as to judge the profitability and financial soundness of the firm. Just like a doctor examines his patient
by recording his body temperature, blood pressure, etc.

Before making conclusion regarding the illness and before giving his treatment, a financial
analysis the financial statements with various tools of analysis before commenting upon the financial
health or weakness of an enterprise.

The analysis and interpretation of financial statements is essential to bring out the mystery
behind the figures in financial statements. Financial statements analysis is an attempt to determine
the significance and the meaning of the financial statement data so that forecast may be made of
the future earnings, ability to pay interest and debt maturities (both current and long- term) and
profitability of a sound dividend policy.
The term ‘financial statement analysis’ includes both ‘analysis’, and ‘interpretation’. A distinction
should, therefore, be made between the two terms. While the term ‘analysis’ is used to mean the
simplification of financial statements, ‘interpretation’ means, ‘explaining the meaning and
significance of the data so simplified. ‘However, both’ analysis and interpretation’ are interlinked
and complimentary without analysis is difficult or even impossible.

Most of the authors have used the term ‘analysis’ only to cover the meanings of both analysis
and interpretation as the objective of analysis is to study the relationship between various items of
financial statements by interpretation. We have also used the term ‘Financial statement Analysis
or simply ‘Financial analysis ’ to cover the meaning of both analysis and interpretation.

Recent trends of financial analysis:

Trends analysis of financial statement helps information users to discern percentage

changes over time in the selected data.

For example, users can see whether a firm’s net profit is increasing, decreasing or stable,
or whether there are fluctuations over the years.

Explanation:

Horizontal analysis of financial statements can easily be expanded to include more than a
single change from one year to the next. This known as trends analysis in many cases, it is
important to examining changes over a specific period because t6his enables the evaluation of
emerging trend that may influence performance in future years.

The five years summary of selected financial data, as found in all annual report is useful in
this regard when more than two years or included index number or used instead of percentage
changes. Essentially, one year is selected as the base year and is set to 100%. All other years are
represented of the base year.

All in all, a person who is interested in assessing the earning capacity of an enterprise may
compare sale and earnings for time horizons of 3,5 and 7 years using the principles and techniques
of trend analysis.
Types of Financial Statement Analysis:

The process of financial statement analysis is different types. The process of analysis is
classified on the basis of information used and ‘modus operandi’ of analysis.

The classification is as under:

(1) On the Basis Information
(a) Internal Analysis

This analysis is done on the basis of internal and unpublished records. It is done by
executives or other authorized officials. It is very much is useful and significant to employees and
management.

(b) External Analysis

This analysis is based on published financial statements of a firm. Outsiders have limited
access to internal records of the concern. Therefore, they depend on published financial
statements. Thus, the analysis done by outsiders namely, creditors, suppliers, investors, and
governance agencies are known as external analysis. This analysis serves a very limited purpose.

(2) On the Basis of ‘Modus Operandi’ of Analysis

(a) Horizontal Analysis:

This analysis is also known as ‘dynamic’ or ‘trend’ analysis. The analysis is done by
analyzing the statements of a number of years. According to John N. Myer “the horizontal analysis
consists of a study of the behavior of each of the entities in the statement’’. Thus, under horizontal
analysis we study the behaviour of each item shown in the financial statements.
We examine as to what has been the periodical trend of various items shown in the statements I
(i.e), whether they have increased or decreased over a period. If the comparative statements are
prepared for more than two periods, then one of the years is taken as basis to calculate the
percentage of increase or decrease. Some analysis prefers to choose earliest year as basis, while
some others prefer to take just the preceding year as basis.

(b) Vertical Analysis:

Vertical analysis is also known as ‘static analysis’ or ‘structural analyses. This analysis is made
on the basis of a single set of financial statements prepared on a particular date. Under vertical
analysis, quantitative relationship is established between different items shown in a particular
statement. Common- size statement is a form of vertical analysis. Different items shown in the
statement are expressed as a percentage to any one item as base.
Use of both the method of analysis is very much required for proper analysis. Each method
provides specific type of information and in fact both methods constitute the backbone of financial
analysis.

Objective and Importance of Financial Statement Analysis:

The primary objective of financial statement analysis is to understand diagnose the

information contained in financial statement with a view to judge the profitability and financial
soundness of the firm, and to make forecast about future prospects of the firm. The purpose of
analysis depends upon the person interested in such analysis and his object.

Objective of Financial Statements

Stakeholders of a company heavily on financial statements to understand its functioning. They

portray the true state of affairs of the company. Here are some objectives of financial statements:

• These statements show an accurate state of a company’s economic assets and liabilities.
External stakeholders like investors and authorities generally do not possess this
information otherwise.

• They help in predicting the extent of a company’s capacity to earn profits. Shareholders
and investors can use this data to make their financial decisions.

• These statements depict the effectiveness of a company’s management. How well a

company is performing depends on its profitability, which these statements show.
• They even help readers of these statements know the accounting policies used in them.
This helps in understanding statements more comprehensively.

• These statements also provide information relating to the company’s cash flows.
Investors and creditors can use this data to predict the company’s liquidity and cash
requirements.
• Finally, they explain the social impact of businesses. This is because it shows how the
company’s external factors affect its functioning.
Nature of Financial Statements

Financial statements are prepared using facts relating to events, which are recorded
chronologically. Thus, we have to first record all these facts in monetary terms. Thus, we have to
fist record all these facts in monetary terms. Then, we have to process them using all applicable
rules and procedures. Finally, we can now use all this data to generate financial statements.

Based on this understanding, the nature of financial statements depends on the following points:

1. Recorded facts:

We need to first recorded facts in monetary form to create the statements. For this, we
need to account for figures of accounts like fixed assets, cash, trade receivables, etc.

2. Accounting convention:

Accounting Standards prescribe certain conventions applicable in the process of

accounting. we have to apply these conventions while preparing these statements. For example,
the valuation of inventory at cost price or market price, depending on whichever is lower.

3. Postulates:

Apart from conventions, even postulates play a big role in the preparation of these
statements. Postulates are basically presumptions that we must make in accounting. For example,
the going concern postulate presumes a business will exist for a long time.Hence, we have to treat
assets on a historical cost basis.
4. Personal judgments:

Even personal opinions and judgments play a big role in the preparation of these
statements. Thus, we have reply on our own estimates while calculating things like depreciation.

Now that we understand the meaning and nature of financial statements, a glance
at their objectives would be appreciable.
Types of Financial Statement

• Balance Sheet

• Income Statement

• Cash Flow Statement

• Statement of Owner’s Equity

• Free Cash Flow and Other Valuation Statements

Balance sheet
The balance sheet is a report of a company’s financial worth in terms of book value. It is
broken into three parts to include a company’s assets, liabilities, and shareholder’s equity. Short-
term assets such as cash and accounts receivable can tell a lot about a company’s operational
efficiency.
Liabilities include its expense arrangements and the debt capital it is paying off. Shareholder’s
equity includes details on equity capital investments and retained earnings from periodic net income.
The balance sheet must balance with assets minus liabilities equaling shareholder’s equity. The
resulting shareholder’s equity is considered a company’s book value. This value is an important
performance metric that increases or decreases with the financial activities of a company.

Income Statement

The Income statement breaks down the revenue a company earns against the expenses
involved in its business to provide a bottom line, net income profit or loss. The income statement
is broken into three parts which help to analyse business efficiency at three different points. It
begins with revenue and the direct costs associated with revenue to identify gross profit. It then
moves to operating profit which subtracts indirect expenses such as marketing costs, general costs,
and depreciation. Finally it ends with net profit which deducts interest and taxes.

Basic analysis of the income statement usually involves the calculation of gross profit
margin, operating profit margin, and net profit margin which each divide profit by revenue. Profit
margin helps to show where company costs are low or high at different points of the operation.
Cash Flow Statement
The cash flow statement provides an overview of the company’s cash flows from operating
activities, investing activities, and financing activities. Net income is carried over to the cash
flow statement where it is included as the top line item for operating activities. Like its title,
investing activities include cash flows involved with firmwide investments. The financing
activities section includes cash flow from both debt and equity financing. The bottom line shows
how much cash a company has available.

Free cash flow and other Valuation Statements

Companies and analysis also use free cash flow statements and other valuation statements
to analyses the value of a company. Free cash flow statements arrive at a net present value by
discounting the free cash flow a company is estimated to generate over time. Private companies
may keep a valuation statement as they progress toward potentially going public.

Statement of Owner’s Equity

The fourth financial statement that a business need is a statement of owner’s equity, also
known as a statement of changes in equity, or a statement of shareholder’s equity. It shows the
business retained earnings- the profit kept, or retained, within a business rather than distributed to
owners or shareholders – both the beginning and at the end of a specific reporting period.
Retained earnings are often used to either reinvest in the company, or to pay off the
business debt obligations. It provides users with information regarding the financial health of a
business, as it shows whether the business is capable of meeting ongoing financial and operating
obligations without requiring its owners to contribute more capital. By preparing each of these
financial statements, not only will you be able to provide a prospective investors or creditors with
important information that they need to assess your business, but also you will be able to identify
trends in your business’s performance that will help you to position your business for continued
success.
INTRODUCTION

In the vast canvas of the global paint industry, one name that stands out with vibrant hues of
success and innovation is Asian Paints. Established in 1942 as a small company in Mumbai, India,
Asian Paints has evolved into one of the largest and most admired paint companies in the world.
With a rich history spanning over seven decades, the company has not only transformed the way
people perceive colors but has also played a pivotal role in shaping the paint industry's landscape.
Asian Paints was founded by Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani,
and Arvind R. Vakil, with a vision to provide high-quality and innovative paint solutions to the
Indian market. The company's early years were marked by modest beginnings, but its commitment
to excellence and customer satisfaction propelled it towards rapid growth. The iconic 'Gattu,' the
mischievous boy holding a paintbrush, became synonymous with the brand and resonated with
customers across generations, creating a lasting brand identity.
Over the years, Asian Paints has expanded its presence not only in India but also globally,
establishing a strong foothold in various countries. The company's success can be attributed to its
relentless pursuit of innovation and a deep understanding of consumer preferences. Asian Paints
has consistently introduced cutting-edge technologies and environmentally friendly products,
staying ahead of industry trends and setting new benchmarks.
One of the key factors contributing to Asian Paints' success is its focus on research and
development. The company has invested significantly in creating state-of-the-art R&D facilities
that drive the development of innovative and sustainable paint solutions. This commitment to
innovation has led to the introduction of a diverse range of products, including low-VOC (volatile
organic compounds) paints, antibacterial coatings, and eco-friendly options, aligning with global
environmental concerns.
 In addition to its commitment to sustainability, Asian Paints has also been a pioneer in customer
engagement and service. The company has leveraged technology to enhance the customer
experience, offering virtual tools that allow customers to visualize how different colors will look
in their spaces. This customer-centric approach has not only strengthened the bond between the
brand and its consumers but has also set a benchmark for the industry.
Asian Paints' success is not limited to its product offerings; it extends to its corporate social
responsibility (CSR) initiatives. The company has consistently demonstrated a commitment to
giving back to society through various philanthropic activities. These initiatives range from
supporting education and healthcare to promoting sustainable practices in the communities where
Asian Paints operates.
In the dynamic and competitive world of business, Asian Paints has demonstrated remarkable
adaptability. The company has navigated through economic challenges, market fluctuations, and
global uncertainties, emerging stronger each time. Its ability to anticipate and respond to changing
consumer needs has allowed it to maintain its leadership position in the paint industry.
Looking towards the future, Asian Paints continues to focus on innovation, sustainability, and
customer satisfaction. As the demand for eco-friendly and technologically advanced paints grows,
the company is poised to lead the way in shaping the future of the paint industry. With a global
presence and a commitment to excellence ingrained in its DNA, Asian Paints is not merely a paint
manufacturer but a symbol of creativity, reliability, and progress.
NAME : The Asian Oil & Paint Company

COMPANY TYPE : Public

ISIN : INE021A01026

INDUSTRY : Chemicals

FOUNDED : 1 February 1942; 81 years ago

FOUNDER : Champaklal H.Choksey; Chimanlal N. Choksi;

Suryakant C. Dani; Arvind R. Vakil

HEADQUARTERS : Mumbai, Maharashtra, India

AREA SERVED : Worldwide

KEY PEOPLE : Manish Choksi(Vice Chairman)Amit Syngle(CEO)

HISTORY

The history of Asian Paints is a captivating narrative that unfolds against the backdrop of
India's journey through independence and subsequent economic development. Founded in 1942
by Champaklal H. Choksey, Chimanlal N. Choksi, Suryakant C. Dani, and Arvind R. Vakil, the
company emerged at a time when the world was grappling with the ravages of World War II, and
India itself was on the cusp of a new era.

Founding Years (1942-1950s):

Asian Paints had modest beginnings in a small garage in Mumbai, India. The founding
members aimed to meet the growing demand for paints in post-independence India, where
economic activity was gaining momentum. The company's initial focus was on manufacturing and
selling distempers, a common form of paint in those days. As the nation rebuilt and urbanized, the
demand for paints grew, providing Asian Paints with a significant opportunity.

In the early 1950s, the company faced a turning point with the introduction of synthetic
enamel paints. This marked a departure from traditional distempers and set the stage for Asian
Paints to revolutionize the Indian paint industry. The shift to enamel paints was accompanied by a
commitment to quality and innovation, laying the foundation for the company's future success.

Brand Building and Iconic Gattu (1960s-1970s):

The 1960s and 1970s witnessed the emergence of Asian Paints as a brand synonymous
with quality and trust. The company's iconic mascot, Gattu, a mischievous boy holding a
paintbrush, became a beloved symbol. Gattu not only personified the brand but also connected
emotionally with consumers, creating a lasting brand identity that endures to this day.

Asian Paints' commitment to quality was further reinforced with the establishment of a
state-of-the-art research and development (R&D) center in Mumbai. This move signaled the
company's intent to stay at the forefront of technological advancements in the paint industry.

Global Expansion and Diversification (1980s-1990s):

The 1980s marked a period of significant expansion for Asian Paints. The company
ventured beyond the shores of India and embarked on a journey of global expansion. It made
strategic acquisitions and established subsidiaries in various countries, including Sri Lanka, Oman,
and Fiji. This global footprint not only strengthened Asian Paints' presence in international markets
but also enriched its product portfolio.

During this period, Asian Paints diversified its offerings, introducing a wide range of products
catering to diverse consumer needs. The company's product line expanded to include industrial
coatings, automotive coatings, and powder coatings. This diversification not only broadened the
scope of Asian Paints' business but also enhanced its resilience in the face of changing market
dynamics.

Technology and Innovation (2000s-Present):

The 21st century brought a renewed focus on technology and innovation for Asian Paints.
The company continued to invest in cutting-edge research and development, leading to the
introduction of environmentally friendly and technologically advanced paint solutions. Low-VOC
(volatile organic compounds) paints, antibacterial coatings, and virtual tools for visualizing paint
colors in real spaces showcased Asian Paints' commitment to sustainability and customer
satisfaction.

In the digital age, Asian Paints embraced technology to enhance the customer experience.
Virtual tools and online platforms were introduced, allowing customers to explore and visualize
different color options for their homes. This customer-centric approach not only set Asian Paints
apart in the market but also demonstrated its ability to adapt to changing consumer preferences.

Corporate Social Responsibility (CSR):

Asian Paints has always been cognizant of its role in society. The company has undertaken
various CSR initiatives focused on education, healthcare, and community development. These
efforts reflect Asian Paints' commitment to being a responsible corporate citizen and making a
positive impact on the communities in which it operates.

Navigating Challenges and Future Outlook:

Throughout its journey, Asian Paints has faced and overcome numerous challenges,
including economic fluctuations, market dynamics, and global uncertainties. The company's
resilience and ability to navigate through adversity have been key to its sustained success.
As Asian Paints looks toward the future, it remains committed to its core values of innovation,
sustainability, and customer satisfaction. The global demand for eco-friendly and advanced paint
solutions presents new opportunities, and Asian Paints is well-positioned to continue shaping the
paint industry's landscape.

VISION AND MISSION STATEMENT

The vision and mission statements of a company serve as the guiding principles that shape
its direction, decisions, and aspirations. For Asian Paints, a global leader in the paint industry, its
vision and mission encapsulate the essence of its journey and underscore its commitment to
excellence, innovation, and societal well-being.

Vision Statement:

Asian Paints' vision statement reflects the company's ambition and the profound impact it
aims to create in the world. The vision is more than a mere proclamation; it is a call to action,
resonating with the company's core values and long-term objectives. Asian Paints envisions:

"To be the most admired decorative coatings company globally, delivering innovative and
sustainable solutions. Every wall is a canvas and every colour speaks; we are the artists creating
enduring beauty."

This vision statement encapsulates the essence of Asian Paints' ambitions. The phrase
"most admired decorative coatings company globally" signifies a commitment to achieving
excellence on the world stage. The emphasis on delivering "innovative and sustainable solutions"
underscores the company's dedication to staying at the forefront of technological advancements
while ensuring a positive impact on the environment.

The metaphorical expression, "Every wall is a canvas and every color speaks," reflects the
company's belief in the transformative power of color. Asian Paints positions itself not merely as
a paint manufacturer but as an artistic force that enhances living spaces, bringing beauty and
vibrancy to every corner of life.
Mission Statement:

Asian Paints' mission statement delves into the specific objectives and principles that guide
the company's day-to-day operations and long-term strategies. It is a roadmap that articulates the
company's purpose and the means by which it aims to achieve its vision. The mission statement is
crafted as follows:

"Asian Paints aims to inspire and influence the environment in which we live and work,
through our focus on colour, innovation, and sustainability. We create long-term relationships by
being responsive and relevant and by consistently delivering value to our consumers. We strive to
be an ethical corporate citizen, committed to good governance and sustainable development."

This mission statement is a testament to Asian Paints' holistic approach to its role in society
and the market. The emphasis on inspiring and influencing the environment reflects a commitment
beyond the mere sale of products – it signifies a dedication to enhancing the quality of life through
color, innovation, and sustainability.

The mention of "creating long-term relationships" highlights the importance Asian Paints
places on customer engagement and loyalty. By being responsive, relevant, and consistently
delivering value, the company seeks to foster lasting connections with its consumers, positioning
itself as a trusted partner in their journey of beautifying spaces.

Furthermore, Asian Paints' commitment to being an "ethical corporate citizen" aligns with
contemporary expectations for businesses to contribute positively to society. This commitment
extends to principles of good governance and sustainable development, emphasizing the
company's responsibility towards the communities it operates in and the planet as a whole.

Alignment with Core Values:

Asian Paints' vision and mission statements are inextricably linked to its core values,
forming a cohesive framework that guides the company's decisions and actions. The core values
of Asian Paints include passion for excellence, customer focus, transparency and integrity,
fairness, and continuous learning.

The pursuit of excellence is reflected in the vision to be the most admired globally, while
customer focus is articulated through the mission's emphasis on creating long-term relationships
and delivering value consistently. Transparency and integrity, as well as fairness, are embedded in
the commitment to ethical corporate citizenship and good governance. Continuous learning is
inherent in the focus on innovation and sustainability.

Sustaining the Vision and Mission:

For Asian Paints, sustaining its vision and mission requires a dynamic approach that adapts
to evolving market trends, technological advancements, and societal expectations. The company's
investment in research and development, as well as its focus on environmentally friendly solutions,
is a manifestation of its commitment to innovation and sustainability – two pillars crucial for
realizing its vision.

In the realm of customer engagement, Asian Paints' use of technology, virtual tools, and
online platforms reflects a responsiveness to changing consumer behaviors and preferences. By
providing tools that allow customers to visualize and experiment with colors, the company ensures
that its mission of creating long-term relationships remains relevant in the digital age.

PRODUCTION PROCESS OF ASIAN PAINT

1.Raw Material Procurement:

The journey of Asian Paints' production process begins with the careful selection and
procurement of raw materials. These raw materials are the building blocks of the diverse range of
paints the company offers. Key ingredients include pigments, binders, solvents, and additives.
Pigments impart color to the paint, binders provide adhesion, solvents aid in application and
drying, and additives enhance specific properties such as durability or texture.

Asian Paints places a strong emphasis on the quality and sustainability of its raw materials.
The company engages in responsible sourcing practices, ensuring that the raw materials meet
stringent quality standards and adhere to environmental regulations. This commitment to
sustainability aligns with the broader industry trend of creating eco-friendly products and reducing
the environmental impact of manufacturing processes.

2.Research and Development:

Asian Paints' commitment to innovation is epitomized by its state-of-the-art research and

development (R&D) facilities. The company invests significantly in R&D to stay at the forefront
of technological advancements in the paint industry. The R&D teams work on developing new
formulations, improving existing products, and exploring innovative solutions.
 In the context of the production process, the R&D efforts play a crucial role in enhancing
the performance, sustainability, and aesthetic appeal of Asian Paints' products. For instance, the
development of low-VOC (volatile organic compounds) paints and environmentally friendly
formulations aligns with the company's vision of delivering sustainable solutions. The R&D teams
collaborate closely with other departments to ensure that the formulations are not only innovative
but also practical for large-scale production.

3.Mixing and Dispersion:

Once the raw materials are procured and the formulations are optimized, the production
process moves to the mixing and dispersion stage. This involves combining the pigments, binders,
solvents, and additives in precise quantities to achieve the desired color, texture, and performance
characteristics. Achieving homogeneity in the mixture is crucial for the consistent quality of the
final product.

Modern production facilities at Asian Paints are equipped with advanced mixing and
dispersion technologies. High-speed mixers and dispersion equipment ensure that the raw
materials are thoroughly blended to create a uniform and stable paint formulation. This step
requires precision and control to guarantee that each batch meets the stringent quality standards
set by the company.

4.Grinding and Milling:

Following the mixing and dispersion stage, the next step in the production process is
grinding and milling. This process involves further refining the paint mixture to achieve the desired
particle size and texture. Grinding mills are employed to break down any agglomerates and ensure
that the paint has a smooth and consistent finish.

The grinding and milling stage is critical for achieving the right consistency and texture of
the paint. Asian Paints employs advanced milling technologies to control particle size distribution,
leading to paints with optimal coverage, durability, and aesthetic appeal. The finely ground
particles contribute to the paint's ability to adhere to surfaces and provide a flawless finish.

5.Quality Control:

Quality control is a cornerstone of Asian Paints' production process. At every stage, from
raw material procurement to the final product, stringent quality checks and tests are conducted to
ensure that the paints meet the highest standards. Quality control measures include color matching,
viscosity testing, adhesion tests, and durability assessments.

In the realm of color matching, Asian Paints leverages cutting-edge spectrophotometers

and color-matching software to ensure consistency across different batches. This meticulous
approach guarantees that customers receive paints that precisely match their chosen colors,
creating a harmonious and visually appealing environment.

6.Filling and Packaging:

Once the paint formulation has passed rigorous quality control checks, it proceeds to the
filling and packaging stage. During this phase, the paint is filled into containers of various sizes,
ranging from small cans for retail consumers to large drums for industrial clients. Asian Paints
invests in automated filling and packaging systems to enhance efficiency and minimize the risk of
contamination.

The packaging itself is a crucial aspect of the product. Asian Paints ensures that its
packaging materials are not only functional but also environmentally responsible. The company
explores sustainable packaging options and designs that align with its commitment to reducing its
ecological footprint.

7.Distribution and Supply Chain:

Efficient distribution is paramount in delivering Asian Paints' products to consumers across

the globe. The company has built a robust supply chain network to ensure timely delivery to
retailers, wholesalers, and other stakeholders. The distribution process is optimized for efficiency
and cost-effectiveness, contributing to the company's ability to meet the demands of a diverse and
expansive market.

Throughout the supply chain, Asian Paints employs inventory management systems and
logistics solutions to streamline operations. This includes strategic warehouse locations, optimized
transportation routes, and real-time tracking systems. The company's commitment to operational
excellence extends beyond the production floor and encompasses the entire supply chain.

8.Customer Support and After-Sales Services:

The production process is not limited to the physical manufacturing of paint; it extends to
the post-purchase experience for customers. Asian Paints places a strong emphasis on customer
support and after-sales services. This includes providing guidance on product selection, offering
technical assistance, and addressing any concerns or queries that customers may have.

The company recognizes that customer satisfaction is not solely dependent on the quality
of the product but also on the overall experience of using Asian Paints. The commitment to
customer support reinforces the brand's reputation for reliability and establishes long-term
relationships with consumers.

9.Environmental and Social Responsibility:

Asian Paints acknowledges the environmental impact of its operations and is committed to
minimizing its carbon footprint. The production process incorporates eco-friendly practices, such
as the use of water-based formulations, reduction of VOC emissions, and waste recycling
initiatives. The company actively participates in sustainability programs and strives to set industry
benchmarks for responsible manufacturing.

In addition to environmental considerations, Asian Paints recognizes its social

responsibility. The company engages in community development initiatives, focusing on
education, healthcare, and sustainable livelihoods. By aligning its corporate social responsibility
(CSR) efforts with its production process, Asian Paints contributes to the well-being of the
communities where it operates.

10.Continuous Improvement and Adaptability:

Asian Paints' production process is characterized by a culture of continuous improvement

and adaptability. The company actively seeks feedback from customers, monitors industry trends,
and invests in research to stay ahead of market dynamics. This commitment to learning and
evolution ensures that Asian Paints remains at the forefront of the paint industry, ready to embrace
new technologies and respond to changing consumer preferences.

SWOT Analysis of Asian paint

Asian Paints, as a leading player in the global paint and coatings industry, is subject to
various internal and external factors that can influence its performance and strategic decisions. A
SWOT analysis provides a comprehensive overview of the company's strengths, weaknesses,
opportunities, and threats, helping to shape its strategies for sustainable growth.
Strengths:

a. Market Leadership: Asian Paints is a market leader in the paint industry, holding
a dominant position in India and expanding its presence globally. This leadership
position provides the company with significant market share and brand recognition.
b. Innovation and Research: The company has a robust research and development
(R&D) infrastructure, allowing it to innovate and introduce technologically
advanced and environmentally friendly products. This focus on innovation
strengthens its competitive edge.
c. Diverse Product Portfolio: Asian Paints offers a wide range of products, catering
to various consumer segments, including decorative coatings, industrial coatings,
and automotive coatings. This diversification contributes to revenue stability.
d. Global Presence: The company has successfully expanded its operations beyond
India, establishing a presence in multiple countries. This global footprint enables
Asian Paints to tap into diverse markets and mitigate risks associated with regional
economic fluctuations.
e. Strong Brand Image: Asian Paints has built a strong and enduring brand image
over the years. The iconic mascot Gattu and a reputation for quality and reliability
contribute to a positive perception among consumers.

Weaknesses:

a. Dependence on Decorative Segment: While Asian Paints has diversified its

product portfolio, a significant portion of its revenue still comes from the decorative
coatings segment. Overreliance on one segment could make the company
vulnerable to fluctuations in the construction and real estate sectors.
b. Regional Concentration: The majority of Asian Paints' revenue is generated in
India. While the company has expanded globally, a significant portion of its
operations is still concentrated in the Indian market, making it susceptible to local
economic challenges.
c. Cost Sensitivity: The paint industry is sensitive to raw material prices, and
fluctuations in the cost of key ingredients can impact profit margins. Managing and
mitigating these cost pressures is a constant challenge for the company.
Opportunities:

a. Rising Demand for Green Products: Growing environmental awareness has led
to an increased demand for eco-friendly and sustainable products. Asian Paints can
capitalize on this trend by further developing and marketing its range of
environmentally conscious paints.
b. Infrastructure Development: Infrastructure development projects, both in India
and globally, present opportunities for increased demand in the industrial coatings
segment. Asian Paints can leverage its expertise to cater to the requirements of
large-scale projects.
c. Digital Transformation: The adoption of digital technologies in the paint industry,
such as virtual tools for color visualization and online platforms for customer
engagement, presents an opportunity for Asian Paints to enhance its customer
experience and stay ahead of the competition.
d. Expanding Global Presence: Continuing to expand and strengthen its presence in
international markets allows Asian Paints to tap into new consumer bases, diversify
its revenue streams, and reduce dependency on any single market.
e. Acquisitions and Partnerships: Strategic acquisitions or partnerships with
complementary businesses could enhance Asian Paints' capabilities, expand its
product offerings, and provide entry into new markets.

Threats:

a. Economic Downturns: The paint industry is closely tied to economic cycles, and
economic downturns can lead to a decrease in construction and renovation
activities, affecting demand for paint products.
b. Intense Competition: The paint industry is highly competitive, with both local and
global players vying for market share. Intense competition could put pressure on
pricing and margins.
c. Raw Material Price Volatility: Fluctuations in the prices of key raw materials,
such as pigments and solvents, can impact production costs and squeeze profit
margins.
d. Regulatory Changes: Stringent environmental regulations and changes in
compliance standards may necessitate adjustments in manufacturing processes,
potentially increasing costs and affecting product offerings.
e. Consumer Preferences and Trends: Shifts in consumer preferences, especially
towards newer paint technologies or design trends, pose a challenge. Asian Paints
needs to stay agile and responsive to evolving consumer expectations.
 TOOLS OF FINANCIAL STATEMENT ANALYSIS

FINANCIAL STATEMENT ANALYSIS

• Comparative Statement or Comparative Financial and Operating Statements

• Common Size Statements

• Trend Ratios or Trend Analysis

• Average Analysis

• Statement of Changes in Working Capital

• Fund Flow Analysis

• Cash Flow Analysis

• Ratio Analysis

• Cost Volume Profit Analysis

1. Comparative Statements

Comparative Statements deal with the comparison of different items of the

Profit and Loss Account and Balance Sheets of two or more periods. Separate
comparative statements are prepared for Profit and Loss Account as Comparative Income
Statement and for Balance Sheets. As a rule, any financial statement can be presented
in the form of comparative statements such as comparative balance sheet, comparative
profit and loss account, comparative cost of production statement, comparative
statement of working capital and the like.

Comparative Statement Example

Assume, for example, that a manufacturer’s Cost of goods sold (COGS)

increases for 30% of sales to 45% of sales over three years. Management can use that
date to make changes, such as finding more competitive pricing for materials or training
employees to lower labor costs. On the other hand, an analyst may see the cost of sales
 trend and conclude that the higher costs make the company less attractive to investors.

2. Comparative Income Statement

Three important information are obtained from the Comparative Income Statement. They
are Gross Profit, Operating Profit and Net Profit. The changes or the improvement in the
profitability of the business concern is find out over a period time. If the changes or
improvement is not satisfactory, the management can find out the reasons for it and some
corrective action can be taken.

The following points should be studied when analyzing a comparative income statement.
• Compare the increases or decrease in sales with a relative increase in the cost of
goods sold.
• Studying the operational profits of the business

• Overall profitability of the business can be analysed by an increase or decrease

in the net profit.

3. Comparative Balance Sheet

The Financial condition of the business concern can be find out by preparing
comparative balance sheet. The various items of Balance sheet for two different periods
are used. The assets are classified as current assets and fixed assets for comparison.
Likewise, the liabilities are classified as current liabilities, long term liabilities and
shareholder’s net worth. The term shareholder’s net worth includes Equity Share
Capital, Reserve and Surplus and the like.

The following points should be Studied when analyzing a comparative balance sheet.
• The present financial and liquidity position (study working capital)

• The financial position of the business in the long term.The

profitability of the business.

4. Common Size Statements

A vertical presentation of financial information is followed for preparing

common – size statements. Besides, the rupee value of financial statement contents are
not taken into consideration. But, only percentage is considered for preparing common
size statement. The total assets or total liabilities or sales is taken as 100 and the balance
 items are compared to the total assets, total liabilities or sales in term of percentage.
Thus, a common size statement shows the relation of each component to the whole.
Separate Common Size Income Statement and for balance sheet as Common Size
Balance Sheet.

Use of Common Size Income Statement

It helps the business owner in understanding the following points
• Whether profits are showing an increase or decrease in relation to the sales obtained

• Percentage change in cost of goods that were sold during the accounting period

• Variation that might have occurred in expense.

• If the increase in retained earnings is in proportion to the increase in profit of

the business.
• Helps to compare income statements of two or more periods.

• Recognises the changes happening in the financial statements of the

organization, which will help investors in making decisions about investing in
the business.

5. Trend Analysis

Trend analysis is an analysis of the trend of the company by comparing its

financial statements to analyze the trend of the market or analysis of the future based
on past performance results, and it’s an attempt to make the best decisions based on the
results of the analysis done.
The ratios of different items for various periods are find out and then compared
under this analysis. The analysis of the ratios over a period of years gives an idea of
whether the business concern is trending upward or downward. This analysis is otherwise
called as Pyramid Method.

6. Average Analysis

Whenever, the trend ratios are calculated for a business concern, such ratios are
compared with industry average. These both trends can be presented on the graph paper
also in the shape curves. This presentation of facts in the shape of pictures makes the
analysis and comparison more comprehensive and impressive.
7. Statement of Changes in Working Capital

The extent of increase or decrease of working capital is identified by preparing

the statement of changes in working capital. The amount of net working capital is
calculated by subtracting the sum of current liabilities from the sum of current asset. It
does not detail the reasons for changes in working capital.

8. Fund Flow Analysis

Fund Flow analysis deals with detailed sources and application of funds of the
business concern for a specific period. It indicates where funds come from and how
they are used during the period under review. It highlights the changes in the financial
structure of the company.

9. Cash Flow Analysis

Cash flow analysis is based on the movement of cash and bank balances. In
other words, the movement of cash instead of movement of working capital would be
considered in the cash flow analysis. There are two types of cash flows. They are Actual
cash flows and Notional cash flows.

10. Ratio Analysis

Ratio analysis is an attempt of developing meaningfully relationship between

individual items (or group of items) in the balance sheet or profit and loss account.
Ration analysis is not only useful to internal parties of business concern but also useful
to external parties. Ratio analysis highlights the liquidity, solvency, profitability and
capital gearing.

11. Cost Volume Profit Analysis

This analysis discloses the prevailing relationship among sales, cost and
profit. The cost is divided into two, They are Fixed Cost and Variable Cost. There is a
constant relationship between Sales and Variable cost. Cost analysis enables the
management for better profit planning.
INTRODUCTION OF RATIO ANALYSIS
Ratio analysis can be defined as the process of ascertaining the financial ratios that are
used for indicating the ongoing financial performance of a company using few types of ratios such
as liquidity, profitability, activity, debt, market, solvency, efficiency, and coverage ratios and few
examples of such ratios are return on equity, current ratio, quick ratio, dividend payout ratio, debt-
equity ratio, and so on. Ratio analysis is a process used for the calculation of financial ratios or in
other words, for the purpose of evaluating the financial wellbeing of a company. The values used
for the calculation of financial ratios of a company are extracted from the financial statements of
that same company.

TYPE OF RATIO ANALYSIS

1. Liquidity Ratio

This type of ratio helps in measuring the ability of a company to take care of its short-term debt
obligations. A higher liquidity ratio represents that the company is highly rich in cash. The types
of liquidity ratios are

a. Current Ratio:
The current ratio is the ratio between the current assets and current liabilities of a company.
The current ratio is used to indicate the liquidity of an organization in being able to meet its debt
obligations in the upcoming twelve months. A higher current ratio will indicate that the
organization is highly capable of repaying its short-term debt obligations.
Current asset
Current ratio =
Current liabilities

b. Quick Ratio:
The quick ratio is used to ascertain information pertaining to the capability of a company in
paying off its current liabilities on an immediate basis. The formula used for the calculation of a
quick ratio is
Quick assets
Quick ratio =
Quick liabilities
2. Profitability Ratios
This type of ratio helps in measuring the ability of a company in earning sufficient profits. The
types of profitability ratios are
a. Gross Profit Ratios:
Gross profit ratios are calculated in order to represent the operating profits of an organization
after making necessary adjustments pertaining to the COGS or cost of goods sold. The formula
used for the calculation of gross profit ratio is

Gross Profit
Gross Profit Ratio = x 100
Net Sales

b. Net Profit Ratio:

Net profit ratios are calculated in order to determine the overall profitability of an
organization after reducing both cash and non-cash expenditures. The formula used for the
calculation of net profit ratio is

Net Profit
Net Profit Ratio = x100
Net Sales

c. Operating Profit Ratio:

Operating profit ratio is used to determine the soundness of an organization and its financial
ability to repay all the short term and long term debt obligations. The formula used for the
calculation of operating profit ratio is

𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐁𝐞𝐟𝐨𝐫𝐞 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬

Operating Profit = x 100
𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬
 d. Return on Capital Employed (ROCE):
Return on capital employed is used to determine the profitability of an organization with
respect to the capital that is invested in the business. The formula used for the calculation of ROCE
is

Earnings Before Interest and taxes

ROCE =
Capital employed

3. Solvency Ratios
Solvency ratios can be defined as a type of ratio that is used to evaluate whether a company is
solvent and well capable of paying off its debt obligations or not. The types of solvency ratios are

a. Debt Equity Ratio:

The debt-equity ratio can be defined as a ratio between total debt and shareholder’s fund. The
debt-equity ratio is used to calculate the leverage of an organization. An ideal debt-equity ratio for
an organization is 2:1. The formula for debt-equity ratio is

Total Debts
Debt Equity Ratio =
Shareholders Fund

b. Interest Coverage Ratio:

The interest coverage ratio is used to determine the solvency of an organization in the nearing
time as well as how many times the profits earned by that very organization were capable of
absorbing its interest-related expenses. The formula used for the calculation of interest coverage
ratio is

𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐛𝐞𝐟𝐨𝐫𝐞 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐚𝐧𝐝 𝐓𝐚𝐱𝐞𝐬

Interest Coverage Ratio =
Interest expense
4. Turnover Ratios
Turnover ratios are used to determine how efficiently the financial assets and liabilities of an
organization have been used for the purpose of generating revenues. The types of turnover ratios
are

a. Fixed Assets Turnover Ratios:

Fixed assets turnover ratio is used to determine the efficiency of an organization in utilizing
its fixed assets for the purpose of generating revenues. The formula used for the determination of
fixed assets turnover ratio is-
Net Sales
Fixed Assets Turnover Ratio =
Average Fixed Assets

b. Inventory Turnover Ratio:

Inventory turnover ratio is used to determine the speed of a company in converting its
inventories into sales. The formula used for calculating inventory turnover ratio is

Cost of Goods sold

Inventory Turnover Ratio =
Average Inventories

c. Receivable Turnover Ratio:

Receivable turnover ratio is used to determine the efficiency of an organization in collecting
or realizing its account receivables. The formula used for calculating the receivable turnover ratio
is

Net Credit Sales

Receivables Turnover Ratio =
Average Receivables
5. Earnings Ratios

Earnings ratio is used for the purpose of determining the returns that an organization generates
for its investors. The types of earnings ratios are

a. Profit Earnings Ratio:

P/E ratio indicates the profit earning capacity of the company. The formula used for the
calculation of profit earnings ratio is
Market Price Per Share
Profit earnings Ratio =
Earnings Per Share

b. Earnings per Share (EPS):

EPS signifies the earnings of an equity holder based on each share. The formula used for EPS
is

Net Income – Preferred Dividends

EPS =
Weighted Average OF Outstanding Shares
 ASIAN PAINTS COMPANY BALANCE SHEET

BALANCE SHEET OF MAR23 MAR22 MAR21 MAR20 MAR19

ASIAN PAINTS (in Rs.
Cr.)
12months 12months 12months 12months 12months
EQUITIES AND
LIABILITIES
SHAREHOLDER’S FUND
Equity share capital 95.92 95.92 95.92 95.92 95.92
TOTAL SHARE 95.92 95.92 95.92 95.92 95.92
CAPTIAL
Reserves and Surplus 15,489.64 13,253.17 11,995.18 9,357.37 8,747.04
TOTAL RESERVES AND 15,489.64 13,253.17 11,995.18 9,357.37 8,747.04
SURPLUS
TOTAL 15,585.56 13,349.09 12,091.10 9,453.29 8,842.96
SHAREHOLDERS
FUNDS
NON-CURRENT
LIABILITIES
Long term borrowings 49.36 16.16 14.31 18.50 10.89
Deferred Tax Liabilities 177.84 205.30 265.19 282.68 392.39
[Net]
Other Long Term Liabilities 709.51 522.05 473.23 501.32 476.76
Long Term Provisions 176.11 168.29 163.51 136.78 118.48
TOTAL NON-CURRENT 1,112.82 911.80 916.24 939.28 998.52
LIABILITIES
CURRENT LIABILITIES
Short Term Borrowings 0.00 0.00 0.00 0.00 4.35
Trade Payables 3,045.86 3,497.29 2,814.30 1,760.08 2,062.29
Other Current Liabilities 2,739.25 2,112.07 1,703.12 1,390.83 1,722.50
Short Term Provisions 46.35 38.08 57.91 44.14 52.27
TOTAL CURRENT 5,831.46 5,647.44 4,575.33 3,195.05 3,841.41
LIABILITIES
TOTAL CAPITAL AND 22,529.84 19,908.33 17,582.67 13,587.62 13,682.89
LIABILITIES
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,568.52 4,475.83 4,525.73 4,875.23 5,131.23
Intangible Assets 74.17 78.11 76.88 85.63 89.97
Capital Work-In-Progress 978.04 225.47 110.11 108.09 179.31
Other Assets 0.00 0.00 0.00 0.00 0.00
FIXED ASSETS 5,620.73 4,779.41 4,712.72 5,068.95 5,400.51
Non-Current Investments 2,314.28 1,646.25 2,161.94 2,225.58 1,817.37
Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00 0.00
Long Term Loans And 0.00 0.00 0.00 64.11 76.00
Advances
Other Non-Current Assets 719.10 734.75 751.47 403.28 335.66
TOTAL NON-CURRENT 8,654.11 7,160.41 7,626.13 7,761.92 7,629.54
ASSETS
CURRENT ASSETS
Current Investments 2,597.37 2,164.34 3,178.81 432.35 1,146.63
Inventories 5,321.79 5,277.61 3,124.61 2,827.47 2,585.10
Trade Receivables 3,462.61 2,915.77 1,809.75 1,109.22 1,244.95
Cash And Cash Equivalents 362.88 308.57 134.91 376.06 167.52

Short Term Loans And 0.00 0.00 0.00 21.31 13.98

Advances
Other Current Assets 2,131.08 2,081.63 1,708.46 1,059.29 895.17
TOTAL CURRENT 13,875.73 12,747.92 9,956.54 5,825.70 6,053.35
ASSETS
TOTAL ASSETS 22,529.84 19,908.33 17,582.67 13,587.62 13,682.89
 ASIAN PAINTS PROFIT AND LOSS ACCOUNT

PROFIT AND LOSS MAR23 MAR22 MAR21 MAR20 MAR19

ACCOUNT OF ASIAN
PAINTS (in Rs. Cr.)
12months 12months 12months 12months 12months
INCOME
REVENUE FROM 29,953.12 25,002.09 18,280.06 17,025.61 16,209.44
OPERATIONS [GROSS]
Less: Excise/Service 0.00 0.00 0.00 0.00 0.00
Tax/Other Levies
REVENUE FROM 29,953.12 25,002.09 18,280.06 17,025.61 16,209.44
OPERATIONS [NET]
TOTAL OPERATING 30,078.40 25,188.51 18,516.86 17,194.09 16,391.78
REVENUES
Other Income 518.01 451.89 366.02 357.54 284.81
TOTAL REVENUE 30,596.41 25,640.40 18,882.88 17,551.63 16,676.59
EXPENSES
Cost Of Materials Consumed 14,790.95 13,838.90 8,524.17 8,432.51 8,647.82
Purchase Of Stock-In Trade 3,836.33 2,978.69 1,649.06 1,283.88 1,010.66
Operating And Direct 0.00 0.00 0.00 0.00 0.00
Expenses
Changes In Inventories Of -299.74 -1,208.63 -90.70 -210.21 -247.86
FG,WIP And Stock-In Trade
Employee Benefit Expenses 1,513.89 1,310.14 1,128.66 985.43 900.14
Finance Costs 93.06 70.25 71.66 78.38 78.60
Depreciation And 755.83 721.56 697.47 689.97 540.77
Amortisation Expenses
Other Expenses 4,416.49 3,681.62 2,812.89 2,845.44 2,576.21
TOTAL EXPENSES 25,106.81 21,392.53 14,793.21 14,105.40 13,506.34
PROFIT/LOSS BEFORE 5,489.60 4,247.87 4,089.67 3,446.23 3,170.25
EXCEPTIONAL,
EXTRAORDINARY
ITEMS AND TAX
 Exceptional Items 0.00 -53.73 0.00 -33.20 0.00
PROFIT/LOSS BEFORE 5,489.60 4,194.14 4,089.67 3,413.03 3,170.25
TAX
TAX EXPENSES-
CONTINUED
OPERATIONS
Current Tax 1,418.38 1,107.29 1,052.72 871.15 881.64
Less: MAT Credit 0.00 0.00 0.00 0.00 0.00
Entitlement
Deferred Tax -34.90 -51.02 -21.31 -117.73 158.61
Tax For Earlier Years 5.94 3.16 6.46 5.66 -2.17
TOTAL TAX EXPENSES 1,389.42 1,059.43 1,037.87 759.08 1,038.08
PROFIT/LOSS AFTER 4,100.18 3,134.71 3,051.80 2,653.95 2,132.17
TAX AND BEFORE
EXTRAORDINARY
ITEMS
PROFIT/LOSS FROM 4,100.18 3,134.71 3,051.80 2,653.95 2,132.17
CONTINUING
OPERATIONS
PROFIT/LOSS FOR THE 4,100.18 3,134.71 3,051.80 2,653.95 2,132.17
PERIOD
 ASIAN PAINTS CASH FLOW STATEMENT

CASH FLOW OF ASIAN PAINTS MAR23 MAR22 MAR21 MAR20 MAR19

(in Rs. Cr.)
12Months 12months 12months 12months 12months
NET PROFIT/LOSS BEFORE 5,489.60 4,194.14 4,090.38 3,413.03 3,170.25
EXTRAORDINARY ITEMS AND
TAX
Net Cash Flow from Operating 4,221.65 1,260.31 3,459.50 2,407.47 2,395.25
Activities
Net Cash Used in Investing -1,396.88 -339.98 -436.95 -774.65 -832.80
Activities
Net Cash Used from Financing -2,184.87 -1,989.32 -582.90 -2,095.25 -1,089.16
Activities
Foreign Exchange Gains / Losses 0.00 0.00 0.00 0.00 0.00
Adjustments On Amalgamation 0.00 0.00 0.00 0.00 0.00
Merger Demerger Others
NET INCREASE/DECREASE IN 639.90 -1,068.99 2,439.65 -462.43 473.29
CASH AND CASH
EQUIVALENTS
Opening Cash and Cash Equivalents 2,064.59 3,133.58 693.93 1,156.36 683.07
Closing Cash and Cash Equivalents 2,704.49 2,064.59 3,133.58 693.93 1,156.36
TREND ANALYSIS:

YEAR SALES STOCK PROFIT/ LOSS

BEFORE TAX
Amount Trend% Amount Trend% Amount Trend%
2019 16,209.44 100 2,585.10 100 3,170.25 100
2020 17,025.61 105.04 2,827.47 109.38 3,446.23 108.71
2021 18,280.06 112.77 3,124.61 120.87 4,089.67 129.00
2022 25,002.09 154.24 5,277.61 204.15 4,247.87 133.99
2023 29,953.12 184.79 5,321.79 205.86 5,489.60 173.16

Graph showing trend analysis for sales

200
180
160
140
120
100
80
60
40
20
0
2019 2020 2021 2022 2023

Trend%

Interpretation:
Sales improved by 184.79% in the year 2023. The improvement is gradual and steady.
 Graph showing trend analysis for stock

250

200

150

100

50

0
2019 2020 2021 2022 2023

Trend%

Interpretation:
Stock position is high during 2023 compared to other period.

Graph showing trend analysis for profit/loss before tax

180

160

140

120

100

80

60

40

20

0
2019 2020 2021 2022 2023

Trend%

Interpretation:
Overall improvement to 173,16% compared to 2019 is good.
4.1. Liquidity Ratios

4.1.1. Current Ratio:

Current ratio =

Table 4.1.1: Table showing Current Ratio

YEAR CURRENT CURRENT LIABLITIES CURRENT RATIO

ASSET
2023-2022 13,875.73 5,831.46 2.37:1
2022-2021 12,747.92 5,647.44 2.25:1
2021-2020 9,956.54 4,575.33 2.17:1
2020-2019 5,825.70 3,195.05 1.82:1
2019-2018 6,053.35 3,841.41 1.57:1

Graph 4.1.1: Graph Showing Current Ratio

2.5

1.5

0.5

0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

CURRENT RATIO
Interpretation

The table is given data mentioned 2023-2022: 2.37, 2022-2021: 2.25,2021-

2020:2.17,2020-2019:1.82, 2019-2018:1.57. Like compared to the year 2023-2022 is the best
position in current ratio.

4.1.2. Quick Ratio:

Quick Ratio

Quick Asset = Current Assets – Inventory

2023: Quick Asset = 13,875.73 - 5,321.79 = 8,553.94

2022: Quick Asset = 12,747.92 - 5,277.61= 7,470.31

2021: Quick Asset = 9,956.54 - 3,124.61 = 6,831.93

2020: Quick Asset = 5,825.70 - 2,827.47 = 2,998.23

2019: Quick Asset = 6,053.35 – 2,585.10 = 3,468.25

Table 4.1.2: Table Showing Quick Ratio

YEAR QUICK ASSET CURRENT LIABLITIES QUICK RATIO

2023-2022 8,553.94 5,831.46 1.46:1
2022-2021 7,470.31 5,647.44 1.32:1
2021-2020 6,831.93 4,575.33 1.49:1
2020-2019 2,998.23 3,195.05 0.93:1
2019-2018 3,468.25 3,841.41 0.90:1
 Graph 4.1.2 Graph Showing Quick Ratio

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

QUICK RATIO

Interpretation:
The table is given data mentioned 2023-2022:1.46, 2022-2021:1.32, 2021-2020:1.49,
2020-2019:0.93, 2019-2018:0.90. Like compared to the year 2021-2020 is the best position in
quick ratio.

4.2. Solvency Ratio

4.2.1 Debt-equity ratio

Debt equity ratio =

Long term debt = Other long- t e r m liabilities + long term provisions

2023: long term debt = 709.51+176.11 =885.62

2022: long term debt = 522.05+168.29 =690.34

2021: long term debt = 473.23+163.51 =636.74

2020: long term debt = 501.32+136.78 =638.10

2019: long term debt = 476.76+118.48 =595.24

Table 4.2.1: Table Showing Debt-equity ratio

YEAR LONG TERM SHAREHOLDER’S FUND DEBT EQUITY

DEBT RATIO
2023-2022 885.62 15,585.56 0.06:1
2022-2021 690.34 13,349.09 0.05:1
2021-2020 636.74 12,091.10 0.05:1
2020-2019 638.10 9,453.29 0.07:1
2019-2018 595.24 8,842.96 0.07:1

Graph 4.2.1: Graph Showing Debt Equity Ratio

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

DEBT EQUITY RATIO

Interpretation:

The table is given data is mentioned 2023-2022:0.06; 2022-2021:0.05; 2021-

2020:0.05; 2020-2019:0.07; 2019-2018: 0.07. Like compared to the year ratios two years
debt equity ratio are same except 2020-2019,2019-2018.
4.2.2. Debt to Capital Employed Ratio

Debt to Capital Employed Ratio =

Table 4.2.2: Table Showing Debt to capital employed ratio

YEAR LONG TERM NET ASSET DEBT TO CAPITAL

DEBT EMPLOYED RATIO
2023-2022 885.62 22,529.84 0.04:1

2022-2021 690.34 19,908.33 0.03:1

2021-2020 636.74 17,582.67 0.04:1

2020-2019 638.10 13,587.62 0.05:1

2019-2018 595.24 13,682.89 0.04:1

Graph 4.2.2: Graph Showing Debt to Capital employed ratio

0.05
0.045
0.04
0.035
0.03
0.025
0.02
0.015
0.01
0.005
0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

DEBT TO CAPITAL EMPLOYED RATIO

Interpretation:
The table is given data is mentioned 2023-2022:0.04; 2022-2021:0.03; 2021-2020:0.04;
2020-2019:0.05; 2019-2018;0.04. Like compared to the year 2020-2019 is the best position in debt
to capital employed ratio.

4.2.3. Proprietary Ratio

Proprietary Ratio

Table 4.2.3: Table Showing Proprietary Ratio

YEAR SHAREHOLDER’S CAPITAL PROPRIETARY

FUND EMPLOYED RATIO

2023-2022 15,585.56 22,529.84 0.69:1

2022-2021 13,349.09 19,908.33 0.67:1

2021-2020 12,091.10 17,582.67 0.69:1

2020-2019 9,453.29 13,587.62 0.70:1

2019-2018 8,842.96 13,682.89 0.65:1

 Graph 4.2.3: Graph Showing Proprietary Ratio

0.7

0.69

0.68

0.67

0.66

0.65

0.64

0.63

0.62
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

PROPRIETARY RATIO

Interpretation:

The table is given data is mentioned 2023-2022:0.69; 2022-2021:0,67; 2021-2020:0.69;

2020-2019:0.70; 2019-2018:0.65. Like compared to the year 2020-2019 is the best position in
proprietary ratio.

4.2.4. Total Asset to Debt Ratio

Total Asset to Debt Ratio

 Table 4.2.4: Table Showing Total Asset to Debt Ratio

YEAR TOTAL ASSET LONG TERM DEBT TOTAL ASSET TO DEBT

RATIO

2023-2022 22,529.84 885.62 25.44:1

2022-2021 19,908.33 690.34 28.84:1

2021-2020 17,582.67 636.74 27.61:1

2020-2019 13,587.62 638.10 21.29:1

2019-2018 13,682.89 595.24 22.99:1

Graph 4.2.4: Graph Showing Total Asset to Debt Ratio

30

25

20

15

10

0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

TOTAL ASSET TO DEBIT RATIO

Interpretation:

The table is given data is mentioned 2023-2022:25.44; 2022-2021:28.84; 2021-2020:27.61;

2020-2019:21.29; 2019-2018:22.99. Like compared to the year 2022-2021 is the best position in
total asset to debt ratio.
4.3. Activity (or) Turnover Ratio
4.3.1. Fixed Asset Turnover Ratio

Fixed Asset Turnover Ratio =

Table 4.3.1: Table Showing Fixed Asset Turnover Ratio

YEAR NET REVENUE FROM NET FIXED ASSET FIXED ASSET

OPERATION TURNOVER
RATIO

2023-2022 29,953.12 5,620.73 5.33:1

2022-2021 25,002.09 4,779.41 5.23:1

2021-2020 18,280.06 4,712.72 3.88:1

2020-2019 17,025.61 5,068.95 3.36:1

2019-2018 16,209.44 5,400.51 3.00:1

Graph 4.3.1: Graph Showing Fixed Asset to Turnover Ratio

0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

FIXED ASSET TURNOVER RATIO

Interpretation:

The table is given data is mentioned 2023-2022:5.33; 2022-2021:5.23; 2021-2020:3.88;

2020-2019:3.36; 2019-2018:3.00. Like compared to the year 2023-2022 is the best position in fixed
asset turnover ratio.

4.3.2. Working Capital Turnover Ratio

Working Capital Turnover Ratio

Working Capital = Current asset – Current Liabilities

2023: working capital=13,875.73-5,831.46=8,044.27

2022: working capital=12,747.92-5,647.44=7,100.48
2021: working capital=9,956.54-4,575.33=5,381.21
2020: working capital=5,825.70-3,195.05=2,630.65
2019: working capital=6,053.35-3,841.41=2,211.94

Table 4.3.2: Table Showing Working Capital Turnover Ratio

YEAR NET REVENUE WORKING CAPTIAL WORKING

FROM OPERATION CAPTIAL
TURNOVER
RATIO

2023-2022 29,953.12 8,044.27 3.72:1

2022-2021 25,002.09 7,100.48 3.52:1

2021-2020 18,280.06 5,381.21 3.40:1

2020-2019 17,025.61 2,630.65 6.47:1

2019-2018 16,209.44 2,211.94 7.33:1

 Graph 4.3.2: Graph showing working capital turnover ratio

0
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

WORKING CAPTIAL TURNOVER RATIO

Interpretation:

The table is given data is mentioned 2023-2022:3.72; 2022-2021:3.52; 2021-2020:3.40;

2020-2019:6.47; 2019-2018:7.33. Like compared to the year 2019-2018 is the best position in
working capital turnover ratio.

4.4. Profitability Ratios

4.4.1. Gross profit ratio

Gross Profit
Gross Profit Ratio = x 100
Net Sales
Gross Profit = sales – cost of goods sold
2023: Gross profit = 29,953.12 - 14,790.95 = 15,162.17
2022: Gross profit = 25,002.09 - 13,838.90 = 11,163.19
2021: Gross profit = 18,280.06 - 8,524.17 = 9,755.89
2020: Gross profit = 17,025.61 - 8,432.51 = 8,593.1
2019: Gross profit = 16,209.44 - 8,647.82 = 7,561.62

Table 4.4.1: Table Showing Gross Profit Ratio

YEAR GROSS PROFIT NET SALES GROSS PROFIT RATIO

2023-2022 15,162.17 29,953.12 50.62%
2022-2021 11,163.19 25,002.09 44.65%
2021-2020 9,755.89 18,280.06 53.37%
2020-2019 8,593.1 17,025.61 50.47%
2019-2018 7,561.62 16,209.44 46.65%

Graph 4.4.1: Graph Showing Gross Profit Ratio

54

52

50

48

46

44

42

40
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

GROSS PROFIT RATIO

Interpretation:

The table is given data is mentioned 2023-2022:50.62; 2022-2021:44.65; 2021-2020:53.37;

2020-2019:50.47; 2019-2018:46.65. Like compared to the year 2021-2020 is the best position in
Gross profit ratio.

4.4.2. Cost of goods sold ratio

Cost of goods sold

Cost of goods sold Ratio = x 100
Net Sales

Table 4.4.2: Table Showing Cost of goods sold ratio

YEAR COST OF GOODS SOLD NET SALES COST OF GOODS

SOLD RATIO
2023-2022 14,790.95 29,953.12 49.38%
2022-2021 13,838.90 25,002.09 55.35%
2021-2020 8,524.17 18,280.06 46.63%
2020-2019 8,432.51 17,025.61 49.53%
2019-2018 8,647.82 16,209.44 53.35%
 Graph 4.4.2: Graph Showing cost of goods sold ratio

56

54

52

50

48

46

44

42
2023-2022 2022-2021 2021-2020 2020-2019 2019-2018

COST OF GOODS SOLD RATIO

Interpretation:

The table is given data is mentioned 2023-2022:49.38; 2022-2021:55.35; 2021-2020:46.63;

2020-2019:49.53; 2019-2018:53.35. Like compared to the year 2021-2020 is the best position in
Cost of goods sold ratio.
FINDINGS:
 Current Ratio is calculated by current assets divided by current liabilities that calculated
ratio on 2023-2.37:1, 2022-2.25:1, 2021-2.17:1, 2020-1.82:1, 2019-1.57:1.
 Quick ratio is calculated by quick asset divided by current liabilities that calculated ratio
on 2023-1.46:1, 2022-`1.32:1, 2021-1.49:1, 2020-0.93:1, 2019-0.90:1.
 Debt Equity ratio is calculated by Long Term Debt divided by Shareholder’s Fund and its
calculated ratio on 2023-0.06:1, 2022-0.05:1, 2021-0.05:1, 2020-0.07:1, 2019-0.07:1.
 Debt to Capital Employed ratio is calculated by Long Term Debt divided by Capital
Employed and its calculated ratio on 2023-0.04:1, 2022-0.03:1, 2021-0.04:1, 2020-0.05:1,
2019-0.04:1.
 Proprietary ratio is calculated by Shareholders fund divided by capital employed or net
asset and its calculated ratio on 2023-0.69:1, 2022-0.67:1, 2021-0.69:1, 2020-0.70:1, 2019-
0.65:1.
 Total Asset to Debt Ratio is calculated by Total asset divided by Long Term Debt and its
calculated ratio on 2023- 25.44:1, 2022- 28.84:1, 2021- 27.61:1, 2020-21.29:1, 2019-
22.99:1.
 Fixed Asset Turnover Ratio is calculated by Net Revenue from Operation divided by Fixed
asset and its calculated ratio on 2023- 5.33:1, 2022-5.23:1, 2021-3.88:1, 2020-3.36:1,
2019-3.00:1.
 Working Capital Turnover ratio is calculated by Net revenue from operation divided by
working capital and its calculated ratio on 2023- 3.72:1, 2022-3.52:1, 2021-3.40:1, 2020-
6.47:1, 2019-7.33:1.
 Gross profit ratio is calculated by gross profit divided by net sale and its calculated ratio
on 2023- 50.62%, 2022- 44.65%, 2021- 53.37%, 2020- 50.47%, 2019- 46.65%.
 Cost of goods sold ratio is calculated by cost of goods sold divided by net sale and its
calculated ratio on 2023- 49.38%, 2022- 55.35%, 2021- 46.63%, 2020- 49.53%, 2019-
53.35%.
Suggestion:

From above ratio analysis it is clearly defined that the firm is running in a successful way, so
the firm can meet its short term obligation and have long life period.

o Hence, the firm can settle their liability in a prescribed time.

o The investor may invest their fund in a minimum risk or without any risk.
o The face value of the shares of this firm will get increase in future.
o It leads to increase the value of goodwill.

Conclusion:
In conclusion, Asian Paints stands as a beacon of innovation and excellence in the global
paint industry. With a rich legacy spanning decade, the company's commitment to quality,
sustainability, and customer satisfaction remains unwavering. Through cutting-edge research,
advanced technology, and a diverse portfolio of products, Asian Paints continues to redefine
standards and inspire creativity in homes and businesses worldwide. With a strong emphasis on
environmental responsibility and community welfare, Asian Paints not only transforms spaces but
also enriches lives. As it ventures into the future, Asian Paints is poised to lead, adapt, and thrive,
driving progress and beauty in the world of colors.

Reference:
https://www.asianpaints.com
https://www.moneycontrol.com
https://en.m.wikipedia.org