INTERPRETATION

TREND ANALYSIS:BALANCE SHEET

Total Share Capital remained constant for the 3 year period whereas Total reserves and
surplus increased by 21.47%.
Total Non-current liabilities have increased by 35.86% because of the increase in long
term borrowings, long term provisions and other long term liabilities.
Total Current liabilities have increased by 43.16% because of the increase in short-term
borrowings, trade payables, short-term provisions and other current liabilities.
Total Capital and liabilities have increased by 36.22%
Total Non-current assets have increased by 73.12% because of the increase in non-
current investments, long term loans and advances.
Total Current Assets increased by 28.22% because of the increase in current
investments, cash and cash equivalents, short term loans and advances and other
current assets and Total assets increased by 36.22% over these 3 year periods.

TREND ANALYSIS:INCOME STATEMENT

Total Revenue has increased by 34.68% over the 3 year period because of the increase
in Interest income and other financial services.
Total Expenses increased by 31.68% because of the increase in employee benefit
expenses, finance costs and other expenses.
Profit/Loss before exceptional, extraordinary items and Tax has increased by 26.2% and
Profit/Loss before tax has increased by 40.42%.
Profit for the year has increased to 26.51% over the 3 year period from 2014-2016.
The basic and diluted (face value of Rs 2/- each) has increased by 26.63% over the 3
year period.

COMPARATIVE STATEMENTS

Long term borrowings have decreased marginally over the years from the year 2012 to
2015, from 20.98% to 18.91%.
Total Reserves and Surpluses have decreased drastically over the years from 2012 to
2015 i.e. 14.68% to 3.93% which shows the utilization of owned funds for business
purposes.
Short Term Provisioning has also decreased drastically from 22.12% in 2013-14 to 1% in
2014-15.
Short Term Loans and Advances have shown marginal decrease from 20.40% in 2013-
14 to 19.24% in 2014-15.
Total Operating Revenues have decreased considerably from 24.71% in 2012 to 20.30%
in 2013 to 16.06% in 2014-15.
Finance Costs have also decreased because of fall in long term borrowings from 2013-
14 to 2014-15 by close to 7 percentage points.

COMMON SIZE STATEMENTS

 Cash and Cash Equivalents have decreased from 3.21% in 2013-14 to 2.66% in
2014-15.
Short Term Borrowings as a proportion of Total Assets and Liabilities that have
decreased marginally from 3.9% to 2.4% from 2014 to 2015.
Finance Costs have also decreased from 78.14% to 77.89% as a proportion of
revenues.
Profit/Loss for the period has also decreased as a percentage of revenues (Net Profit
Margin) has decreased by approximately 1.5% points from 2013-14 to 2014-15.

RATIO ANALYSIS

Liquidity Ratios: These ratios help to determine the ability of the organizations to pay
off their short term obligations from their shot term assets.
ANALYSIS: the figures depict that the company does not have very good liquidity ratios.
This indicates that company may have difficulties in paying their short term obligations
but lower values do not mean bad situation. They can handle these short term liabilities
if they good future prospects. They can raise the funds by taking loans on the basis of
these future prospects.

Solvency Ratios: A key measure used to judge the ability of an enterprise to meet its
debt and other obligations. These ratios indicate whether the cash flows of a company
are sufficient to meet its short-term and long-term liabilities.
ANALYSIS:In times of slowdown in economy companies having high debt to equity on
their balance sheets find difficult to service the interest on their borrowings as profit
margins decline and this could raise the risk of insolvency. The Debt to Equity ratio of
this company has remain very high, which means that they may find it difficult to pay off
their debts from their equity capital but in such companies Debt to Equity ratio is
generally higher.
Another ratio to judge the risk of insolvency is Debt to total assets. It tells that what
percentage of total assets the debt component covers. Companies like LIC Housing
Finance generally have higher Debt to total assets ratio because debt has huge share in
the balance sheet.
Interest coverage ratio tells how many times operating profit could cover the interest
expense of the company. This company has a lower interest coverage ratio because
their interest expense is very high due to high debt. Their interest coverage ratio is
greater than 1 but less than 1.5 which is normal for such companies. If this ratio goes
below 1 then company will suffer losses.

Profitability Ratios: Profitability ratios are used to check the ability of business to
generate earnings compared to its expenses and other relevant costs incurred during a
specific period.

ANALYSIS: For most of these ratios, having a higher value relative to a competitor's ratio
or relative to the same ratio from a previous period indicates that the company is doing
well.
 The profitability ratios are not changing very much. They are stable which means
company is not in a bad position. Their profits, sales and assets are also increasing but
the change in the ratios is minimal.

Activity Ratios: Activity ratios measure the ability of a firm to convert different accounts
within its balance sheets into cash or sales.

ANALYSIS: Asset turnover ratio has been constant which means if assets are increasing
then their turnover is also increasing. Debtors turnover as well as payables turnover is
very high which means they are dealing in credit purchases or credit sales because
housing finance companies do not have large trade payables and receivables. Because
of lower receivables and payables collection period and payable period are very low.