Question 1 ( 4Points ) Listed below in Table 1, is provided a summary of information about 4 industries in India. In Table 2, are reported key financial figures and ratios of four main players in each industry. The vocabulary and the level of financial details provided by Indian companies is somewhat different from what appears in the slides and from what used in videoclips. The case was purposely prepared to improve the financial vocabulary regardless of local adaptations. Read carefully the notes included in the Table 2 to understand how ratios are computed and what is their meaning. Required Match the data given in Table 2 to the industries given in Table 1. Table 1: Industry description Automobile (Two-Wheeler) A large number of products are available to consumers across various segments in the two-wheeler sector in India. This has gathered pace with the entry of a number of foreign players. A reduced overall product lifecycle has forced players to employ quick product launches. There has been an increase in research and development investments from both government and the private sector. Private sector innovation has been a key determinant of growth in this sector. Banking Indian banks are increasingly focusing on adopting an integrated approach to risk management and have embraced the international banking supervision recommendations of the Basel Il accord. According to the Reserve Bank of India, the majority of Indian banks already meet the capital requirements of Basel Ill. Most have put in place the framework for asset-liability matching and credit and derivatives risk management. Banks are emphasizing diversification of the source of revenue streams to protect themselves from interest rate cycles and their impact on interest income. Indian banks, including public sector banks, are aggressively improving their technology infrastructure to enhance customers' experience and gain competitive advantage. Internet and mobile banking is gaining a rapid foothold. Heavy Engineering Capacity creation in sectors such as infrastructure, power, mining, oil and gas, refinery, steel, automotive, and consumer durables has been driving demand in the capital goods sector. There has been a consistent increase in demand for electrical and construction equipment. Indian companies have a comparative advantage over their peers in terms of manufacturing costs, market knowledge, technology, and creativity. This is a highly organized sector dominated by large players who employ over 4 million skilled and semi-skilled workers. Supportive government policies for this sector have led to higher investments. Pharmaceutical The Indian pharmaceutical market is unique because it is dominated by branded generics, which make up 70-80 per cent of the retail market. India is a major manufacturing hub for generics. With 72 per cent of market share (in terms of revenues), generic drugs form the largest segment of the Indian pharmaceutical sector. Over-the-counter medicines and patented drugs constitute 19 per cent and 9 per cent, respectively, of total market revenues. Local players have enjoyed a dominant position because of their formulation development capabilities and early investments. Price levels are low, driven by intense competition Table 2: Key players in each industry - Key financial data (in million of INR) and main ratios Item A B C D 1 Sales 410,575| 94,821 271,935| 1,536,362 2 Total expenses 394,746 | 85,295 255,929 1,457,915 Raw materials, stores and spares consumption (included in operating 3 expenses) 176,382 | 23,442 184,276 NA Purchases of finished goods (included in 4 operating expenses 7,734 NA 5 Total operating expenses 339,964 | 78,277 237,881 | 1,219,964 6 Reported profit after tax 34,608 | 13,883 21,091 108,912 7 Net fixed assets 46,929 | 35,242 22,433 77,165 8 Inventories 97,976 | 25,112 6,696 NA 9 Sundry debtors and bills receivable 438,029 ( 19,251 10,008 315,492 10 Cash and bank balances 118,729 464 1,175 1,325,496 11 Short term loans and advanccs 113,321 | 23,023 21,318 | 2,217,092 12 Total Assets 845,780 | 142,730 112,166 | 17,945,70 13 Current liabilities and provisions 487,495 29,538 53,277 935,751 Sundry creditors (included in current 14 liabilities) 94,096 | 10,069 22,906 NA 15 Shareholders' funds 330,471 | 100,826 55,999 | 1,182,823 16 Borrowings 2332 9,163 2,843 | 1,831,309 17=365/(1/9) Collection period in days 389.41| 74.10 13.43 74.95 18=365/((3+4)/14) Payment period in days 194.72| 117.89 45.37 NA 19=365/(1/8) Days in inventory in number of times 87.10| 96.67 8.99 NA Fixed assets turnover ratio in number of 20=1/7 times 8.75 2.69 1212 19.91 21=(8+9+10+11)/13 | Current ratio in number of times 1.58 2.30 0.74 14.81 22=6/15 ROE in % 10.47% | 13.77% 37.66% 9.21% 23=6/1 Profit after tax percentage in % 8.43% | 14.64% 7.76% 7.09% 24=1/12 Total assets turnover in number of times 0.49 0.66 242 0.09 25=12/15 Equity multiplier in number of times 2.56 1.42 2.00 15:1 26=23%24*25 ROE check 10.47% | 13.77% 37.66% 9.21% In which respective industry do companies A,B,C,D operate? 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