CF Assignment #2
Jaya Soujanya Devi G
EMBA, Dayanand Sagar University
N20: Corporate Finance 2 (Sec-B )
Prof. AG krishnan,
Assignment Due Date: 07/04/2021.
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India Pvt Ltd
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Corporate Identity Number (CIN) of the
Company:
Years in existence
Industry details
Competitors
L19201WB1931PLC007261
Since : 1931 ( India)
Footwear and accessories
1. Nike 2. Reebok 3. New Balance 4. Converse
5. Puma 6. Fila 7. Adidas 8. Liberty Shoes 9.
Under Armour 10. Metro Shoes 11. Woodland
12. Red Tape
Sales in the last reported full year
3053.45 Crores
Net profit after taxes in the reported full 329 Crore
year
BATA INDIA LIMITED
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Some important ratios
Mentioned below the box
Balance Sheet size (total of either
assets or liabilities )
Ratio Analysis for BATA INDIA
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Solvency Ratios : Current Ratio: The Company’s current ratio deteriorated and stood at 2.5x during
FY20, from 2.9x during FY19. The current ratio measures the company's ability to
pay short-term and long-term obligations.
Interest Coverage Ratio: The Company’s interest coverage ratio deteriorated and
stood at 5.1x during FY20, The interest coverage ratio of a company states how
easily a company can pay its interest expense on outstanding debt. A higher ratio is
preferable.
Profitability Ratios :Return on Equity (ROE): The ROE for the company declined and down at 17.4%
during FY20, from 18.9% during FY20. The ROE measures the ability of a firm to
generate profits from its shareholders capital in the company.
Return on Capital Employed (ROCE): The ROCE for the company declined and
down at 20.7% during FY20, from 27.6% during FY19. The ROCE measures the
ability of a firm to generate profits from its total capital (shareholder capital plus
debt capital) employed in the company.
Return on Assets (ROA): The ROA of the company declined and down at 12.0%
during FY20, from 13.4% during FY19. The ROA measures how efficiently the
company uses its assets to generate earnings.
Key Ratio Analysis
No. of Mths Year Ending
12 Mar-20*
Current ratio
x
2.5
Debtors’ Days
Days
8
Interest coverage
x
5.1
Debt to equity ratio
x
0.5
BATA INDIA LIMITED
Return on assets
%
12.0
Return on equity
%
17.4
Return on capital employed
%
20.7
BATA INDIA Balance Sheet Analysis
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The company's current liabilities during FY20 stood at Rs 8 billion as
compared to Rs 6 billion in FY19, thereby witnessing an increase of 27.1%.

Long-term debt stood at Rs 10 billion as compared to Rs 0 million during
FY19, a fall of 0.0%.
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Current assets rose 9% and stood at Rs 20 billion, while fixed assets rose
321% and stood at Rs 14 billion in FY20.

Overall, the total assets and liabilities for FY20 stood at Rs 37 billion as
against Rs 25 billion during FY19, thereby witnessing a growth of 51%.
BATA INDIA Balance Sheet as on March 2020
No. of Mths Year Ending
12 Mar-19*
12 Mar-20*
% Change
Net worth
Rs m
17,418
18,939
8.7
Current Liabilities
Rs m
6,297
8,007
27.1
Long-term Debt
Rs m
0
10,354
0.0
Total Liabilities
Rs m
24,741
37,325
50.9
Current assets
Rs m
18,405
20,033
8.8
Fixed Assets
Rs m
3,300
13,893
321.0
Total Assets
Rs m
24,741
37,325
50.9
BATA INDIA Cash Flow Statement 2019-20
BATA INDIA LIMITED
No. of
months
12
12
Year
Ending
Mar19
Mar20
Cash Flow from
Operating Activities
Rs m
3,449
5,817
68.7%
Cash Flow from
Investing Activities
Rs m
-2,777
-1,890
-
Cash Flow from
Financing Activities
Rs m
-631
-4,361
-
Net Cash Flow
Rs m
41
-434
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Particulars
%
Change
Managing Risk
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Decision making
Research & Development
Minimising manufacturing cost
Raising Capital
Effective functioning
Growth and Diversification
Short term and long term goals
Marketing a company / product
Dividend and Interest
1. Managing Risk
ICICI Securities has given a reduce rating to Bata India with a target price of Rs
1100. The share price moved down by 1.04 per cent from its previous close of Rs
1299.15. The stock’s last traded price is Rs 1285.65.
Bata India Ltd. key Products/Revenue Segments include Footwear which contributed
Rs 3051.62 Crore to Sales Value (99.94 % of Total Sales) and Other Operating
Revenue which contributed Rs 1.83 Crore to Sales Value (0.05 % of Total Sales)for
the year ending 31-Mar-2020.
BATA INDIA LIMITED
2 Decision making
In very few sides Bata has lacking, Some of the Management Decision Problem Bata
Facing: Should a new product be introduced: In case of new product Bata is fail to
its competitors Where as their main competitors ‘APEX’ and ‘LOTTO’ regularly
introducing new product Bata introduce new product very rarely. Bata confuse about
should they introduce new product or not.
3 Research & Development
Information used to identify and define opportunities and problems; generate,
refine, and evaluate marketing actions; monitor marketing performance; and
improve understanding of marketing as a process. From my survey i notice that Bata
face some marketing problem as ‘Insufficient promotional activities’. Bata think that
they should go on with more and more retail outlets rather than intense advertising.
As the Bata’s all the promotional activities design by the Retail Marketing Manager,
they don’t have Marketing Manager regionally. Target Market Bata don’t define their
target market as specific as it needed to be. They choose their target market ‘lower
to middle income group as well as the upper segment.
4. Minimising Manufacturing Cost
Major associates of the Company, who are engaged in supplying of maximum level
of raw materials for shoe manufacturing process in all manufacturing units across
India, are located nearby to the respective units. This helps the Company to
minimize its transportation cost and environmental impact.
The Company has adopted a series of energy conservation measures like
continuously replacing conventional tube lights with energy efficient LED lights,
installation of energy efficient Variable Frequency Drive (VFD) motors in conveyors
etc. at its manufacturing units across India. Such energy saving measures led to a
saving of energy cost worth approx. Rs. 8.03 Million during the year under review.
The significant changes in Interest Coverage Ratio has been recorded due to
significant increase in Earnings Before Interest and Taxes (EBIT) with reduction in
finance cost of the Company.
Minimising manufacturing cost
Raising Capital
Effective functioning
Growth and Diversification
Short term and long term goals
Marketing a company / product
Dividend and Interest
BATA INDIA LIMITED
7. Growth and Diversification
Introduction of a transparent Internal Job Postings (IJP) program which helps
facilitate cross functional internal movements of their employees.
BATA created the Talent Xpress program. This is a meritorious program wherein
high potential/ high performing employees in middle level roles are provided with
exposure to different business challenges and get an opportunity to work with
internal SMEs across the Asia Pacific Region.
Diversification
The Company is keen to promote diverse workforce across the organization. On the
occasion of International Women’s Day, this year BATA launched their Balanced
Workforce Strategy (BWS), under the branding of “Wforce”. The WForce initiative
offers a platform to promote and connect with BATA women employees across the
Company. In addition to this launch, we have also tied up with TRRAIN (Trust for
Retailers & Retail Associates of India) to focus on our diversity hiring program at our
store level.
9. Marketing a company / product
The main products in its marketing mix are general category of casual shoes,
formal shoes, sandals, kids' shoes, men and women collection, sports shoes etc.
The product line gets upgraded with time and new fashion in market. Bata has
specially known for its brand value and quality product.
Since its very inception, Bata has had a huge product portfolio in terms of the large
variety of shoes, sandals and accessories that it offers and the consistency they
promise. Millions, who look for no nonsense products, heavily rely upon Bata and
the no frills attached Bata shoes which can be obtained at affordable prices. Owing
to its reputation of supplying good quality shoes (and its history of supplying shoes
to military in the First World War) people expect the same durability from Bata.
Bata has over the years provided well designed products with focus on durability
and price.
10 Dividend and Interest
BATA INDIA LIMITED
BATA INDIA LIMITED