Analysis for investors

(market analysis)

This analysis is conducted for the measurement of market growth and market potential of the business.
This analysis provides guidance to prospective investors to invest in the company.

Any investor analyze the company’s performance by looking three things

 Financial Leverage
 Return to investors
 Marketibility

ITEMS INVOLVED:
 EBIT
 EBT
 Dividend per share
 Market price per share
 Earning per share
 Total Equity
 No of Shares

YEARS INVOLVED:

Current Year = 2010

Base Year = 2009

Analytical Analysis
FINANCIAL LEVERAGE:

“Use of maximum financial fixed cost to magnify the profits”

Degree of Financial Leverage =EBIT/EBT

2010 2009 Result Reason

1.28 1.40 Unfavourable EBIT 18.9%
EBT 29.37%
RETURN TO INVESTORS:

“How much return investor will gain by investing in the the particular firm”
Ratio name 2010 2009 Result Reasons
Earning Per Share 16.49 15.47 Favourable Profit 6.63%
Dividend Yield Ratio 9.97 5.98 Favourable Dividend 66.67%
Dividend Payout Rato 60% 37% Favourable Dividend 66.67%
Retention Ratio 40% 63% Favourable -----------------

MARKETIBILITY:

“Shows the strength and worthiness of the company in the market. This ratios shows the investorbelieves
and interest in the company”

Ratio name 2010 2009 Result Reasons

PriceEarning Ratio 7.41 6.66 Favourable MP 18.60%
Book Value Per Share 59.70 53.21 Favourable Reserve 19.74% Un-
app-profit 6.63%
Market Price Per Share 122.16 103 Favourable ------------------------

Critical Analysis

FINANCIAL LEVERAGE:

Company’s DFL is unfavorable in current period as compared to base period. It is not fruitful situation for
the investors and it indicates that company is not managing and utilizing its fixed finance cost in a well
manner way. Company’s
finance cost is increasing 32%
sales are increasing 34%
rofit is increasing 6.60%
the increase in profit is less as compared to sales is due to unfavorable DFL and company should manage
it to magnify the profits.

RETURN TO INVESTORS:

Company’s EPS is favorable which means company has earned a large profit and has large earnings
available to distribute among the common shareholders.
Dividend yield ratio is favourable which shows the internal strength of the company that company is
producing more earnings (dividend component of total return).and it is less effected by the market
forces(capital gains component of total return)
Dividend payout ratio is 60% that is favourable as compared to base period. Company has increased the
dividends payment 66.67% in current period. So it is positive sign for the investor.and they will put more
interest in company.

Retention ratio is decreased and it is favourable from the investors point of view. In the current period it
is it 40%.

MARKETIBILITY:

Price Earning ratio has increased upto 7.41% due to increase in MP 18.60% so this ratio indicate the
strong growth potential of the company and investors confidence level that they are ready to pay 122
rupee to earn 7 rupee.

Book value is also favourable due 19.74% increase in reserves and 6.63% increase in unapproperiated
profit. Book is more authentic measure to judge the company internal growth performance.

Market price has increased during the period 31st Dec 2009-31st Dec 2010 from (103----122.16) and
currently it is being traded at 169.49 rupee at 26 May 2011.

Comparative Analysis
FINANCIAL LEVERAGE:

Degree of Financial Leverage =EBIT/EBT

Tri pack Siemen Result

s
1.28 1.40 Unfavourable

RETURN TO INVESTORS:

Ratio name Tri pack Siemens Result

Earning Per Share 16.49 49.97 unfavourable
Dividend Yield Ratio 9.97 5.17 unfavourable
Dividend Payout Rato 60% 120% unfavourable
Retention Ratio 40% -20% Favourable

MARKETIBILITY:

Ratio name Tri pack Siemens Result

PriceEarning Ratio 7.41 23.21 unfavourable
Book Value Per Share 59.70 358.43 unfavourable
Market Price Per Share 122.16 1160 Unfavourable