SCHOOL OF COMMERCED.A.V.V INDORE

SUBMITTED TOProf. DEEPAK AGARWAL

SUBMITTED BY:- YOUNIS AHMAD M.COM(AFC)

YEAR 2013-13

INVENTORY ACCOUNTING MANAGEMENT AND

CONTROLL

Apollo Tyres LtdApoll0 tyres Ltd was the worlds 17th biggest tyre

manufacturing company with an annual consolidated revenue of RS 121.5 billion in 2011 Apollo tyre Ltd was formed in the year 1972 its corporate head quarter is in gorgon Apollo house 7 institutional area sector 32,gurgaon Haryana Apollo tyre is a manufacturing industry Region Asia Country India

FOUNDED-1972CEO-ONKAR SINGH KANWAR HEAD QUATER-GURGAON INDIAREGION- ASIACOUNTRY-INDIAWWW.APOLLOTYRES.COM

Balance sheet of Apollo tyre LtdYear 2013 2012 2011

Sources of funds In crores In crores In crores

Total share capital 50.41 50.41 50.41

Equity share capital 50.41 50.41 50.41

Share application money 10.70 - -

Preference share capital - - -

Reserves 2280.24 1994.07 1842.03

Revaluation Reserves - 3.12 3.12

Nett worth 2341.43 2047.60 1895.56

Secured loans 1088.41 1483.69 1093.30

Unsecured loans 789.37 664.53 814.67

Total debt 1877.78 2148.22 1907.97

TOTALL 4219.21 4195.82 3803.53

CONTINUE...

MARCH 2013

MARCH 2012

MARCH 2011

Application of funds

Gross block 4377.48 3947.32 3299.13

Less accumulated depreciation

1306.12 1096.69 915.55

Nett block 3071.36 2850.63 2383.58

Capital-work-in-progress 248.97 396.89 502.83

investment 612.70 562.65 559.35

inventories 1120.83 1111.42 1136.33

Sundry debtors 273.14 363.91 204.28

Cash and bank balance 154.19 108.98 133.65

Total current assets 1548.16 1584.31 1474.26

Loans and advances 356.03 376.66 889.36

Fixed deposits - - -

Totall current assets loans and advances

1904.19 1967.50 2371.23

CONTINUE...Current liabilities 1426.91 1408.54 1277.81

provisions 191.00 173.39 735.65

Totall current liabilities and provisions

1618.00 1581.93 2013.46

Nett current assets 286.19 385.66 357.77

Misseleonous expenses - - -

Totall assets 4219.22 4195.83 3803.53

Contingent liabilities 382.17 324.97 697.77

Book value (Rs ) 46.24 40.56 37.55

Annual Result in shortFIGURES IN CRORES 2013 2012 2011

SALES 8507.49 8157.88 5490.74

OPERATING PROFIT 898.19 666.31 533.76

GROSS PROFIT 694.59 443.21 410.90

NETT PROFIT 312.53 181.33 198.25

Manufacturing expenses 272.54 334.87 268.39

Percentage of items in total current assets

2013 2012 20110%

10%20%30%40%50%60%70%80%90%

100%

72.38 70.1577

17.64 22.9713.85

9.98 6.88 3

inventory sundry debtorscash and bank balance

Interpretation of current assetsInventory consists nearly 70% of current

assets so a company must control over it because it block a very large amount of cash if company not control over it causes loss for company so that company must maintain optimum level of stock

Because the company imports raw material from Japan and also export their finished products to different countries

Financial RatiosMarch 2013

March 2012

March 2011

Gross profit margin % 8.17 5.43 7.50

Nett profit margin % 3.67 2.22 3.61

Operating profit margin 10.55 8.17 9.75

Formulas for calculating these ratiosGross profit ratio= gross profit Nett sales

Operating profit margin=operating income Nett sales

Nett profit margin (return on sales)=Nett income

Nett sales

ANALYSIS OF FINANCIAL RATIOSIt is obvious that every company try to grow

and increase their sales to increase their profitability for which they take appropriate steps at appropriate time in the same case Apollo tyres also perform these activities but the reason for low profitability in year 2012 are stock adjustment and raw material price.

Japanese currency exchange rate increase as on indian rupee in 2011-12.

Diagram presentation of financial ratios

Jan/11 Jan/12 Jan/13

7.946.48

7.9

3.632.21

3.61

11.36

9.611.07

Chart Title

Gross profit margin Nett profit marginoperating profit margin

Liquidity ratiosMarch 2013

March 2012

March 2011

Current ratio 1.06 1.03 0.93

Current ratio=current assets current liability

current assets amount in (crores)

current liability (crores)

1548.16

1426.91

1584.31

1408.54

1474.26

1277.81

Analysis of current ratioThe current ratio of the company is to

determine the company ability to pay its current liability as per the analysis the company are coming know in a position to pay its current liability from current assets it is not necessary that a company of which a current ratio are below 2:1 is an insolvent company but it must not be very less like 0.50:1

DIAGRAM OF LIQUIDITY RATIOS

Jan/11 Jan/12 Jan/13

1.061.030.93

0.30.340.27

Chart Title

CURRENT RATIO QUICK RATIO

QUICK RATTI = QUICK ASSETS CURRENT LIABILITY Liquid asset ratio 2013 2012 2011

Quick ratio

Quick assets (crores)

Current liability (crores)

0.30

427.33

1426.91

0.34

472.89

1408.54

0.27

337.93

1277.81

QUICK RATIOQuick assets are current assets except

inventory and prepaid expenses the ideal standard for quick ratio is 1:1 the reason for low quick ratio is that the Apollo tyres is a tyre manufacturing industry in which inventory consists 70% of current assets which are not very quick convert like fast moving consumer items but it tooks a very large time.

WORKING CAPITAL RATIOMARCH 2013

MARCH 2012

MARCH 2011

Inventory turnover ratio(times) 6.78 6.45 5.35

Inventory turnover in days 54 57 68

Cost of goods sold (crores)

Average inventory (crores)

7812.9

1120.83

7714.67

1111.42

5079.84

1136.33

Inventory turn over ratioA HIGH INVENTORY TURN OVER RATIO IS A

GOOD SIGN FOR COMPANY A HIGH INVENTORY RATIO INDICATES FREQUENT SALES LOW RATIO SHOWS POOR SALES OF COMPANY INVENTORY TURN OVER RATIO= COGS*

AVG. INVENTORY

Inventory turn over ratio in days= 365 days inventory turn

over *COGS – COST OF GOODS SOLD=sales-gross profit

CONCLUSIONAFTER THE ANALYSIS OF THE COMPANY FINANCIAL

STATEMENTS WE ANALYSE THE LONG TERM INVESTMENT IN APOLLO TYRES LTD IS BEST OPPURTUNITY FOR SHARE HOLDERS AND INVESTORS BECAUSE THE OVERALL PERFORMANCE OF THE COMPANY GROWS DAY BY DAY .

IN 12-JUNE-2013 APOLLO PURCHASED U.S BASED COOPER TYRE AND RUBBER COMPANY FOR ABOUT $2.5 BILLION IN A DEAL THAT WOULD MAKE THE APOLLO TYRES LTD WORLD’S 7th largest tyre maker .

The company has manufacturing presence in Asia , Europe and Africa with 9 modern tyre facilities and export to over 118 countries with the help of well employees work in Apollo tyres Ltd .there are 16000 employees work in Apollo tyres Ltd

Stock exchange listed company Apollo tyres ltd company is traded in India

on the Bombay stock exchange , National stock exchange and Kochi stock exchange with 56.63% of shares held by the public government entities ,banks and financial institutions as on June 30 2013.

THANKS TO ALL OF YOU