Some of us evaluate a vendor before entering into a transaction. Some of us don’t. Many times it is difficult to get any useful information on that vendor. Things work by word of mouth until they go bad. Broadly speaking, vendor onboarding is the process of verifying and assessing a vendor/supplier to suit your organization’s eligibility requirements. Why is it ever done? You would know why, if, you have ever faced a vendor fraud. If you haven’t yet, maybe my recent experience will help you understand.

My story:
I recently shifted to Bombay to set up the next Tofler’s office. I was searching for suppliers that could help transit some stuff. Aggarwal Packers and Movers was definitely an option but was turning out expensive.

So, after looking at alternatives in Google, I nearly finalized a deal with one company. It had an impressive website, quick response time and happy reviews. Before going ahead, I ran up 3 simple checks on the company:

1. Incorporation date: The company was incorporated 2 years back. Now that was a bit of a red flag. Mouthshut had some 1500 reviews on the company. How could there be 1500 reviews in 2 years of starting up? Other similar companies had about 400-500 reviews and they started much earlier.
2. Registration details: Looked at the company’s address, charges, capital, etc – nothing alarming. All details matched with that on the website and as communicated by the company to me.
3. Directors and other directorships:  Then I started looking at directors of the company and their other directorships. This is where the problem appeared. The directors of this logistics vendor had directorships in 50 other companies. Most of the companies were ‘strike off’. Most of them were recently incorporated and then shut down. Of those which were ‘Active’ companies, many of them were non-compliant and hadn’t filed recent financials. This definitely doesn’t say right about the supplier. Questions integrity and fraudulent intention. Wouldn’t you agree? Then the reason for so many mouths shut reviews clicked me – they were all fake and bought reviews! And that’s why they all said good about the company.

The point being
This ofcourse is a small example of how simple checks on a business could help. But my point is that even in such a small transaction, it was helpful. Then why miss it in a bigger transaction? I have often come across suspicious businesses that could be discovered by an apparent look. The problem is that we don’t look at all.

Just start with a basic process – Look at registration details, financial highlights, directors and connected companies. This could go a long way to save trouble in the future.

1. Background check of the founders: Evaluate the experience and educational background of the founders and the core team. Try to get references if you can. Do they have any experience in the problem they are aiming to solve? How much fieldwork they have put into the problem and how much research has been done in finding the solution? And foremost, are the people of character and integrity?
2. Check financials: For early-stage startups, financials would not be available but for others, it is crucial to understand their financials. Even if there are no revenues yet, you may like to get a sense of where is expenditure being done? Does it resonate with their story?
3. Other recent funding rounds and valuation: Check any recent funding rounds in the startup. Please use the funding documents filed with regulatory authorities to evaluate their recent funding rounds and the valuations claimed therein. The startup itself should be able to share those documents or you may get them from MCA or Tofler.
4. Other investors and their other investees: You may want to meet the existing investors or check out other companies in which they are already invested. You can do this for free with the ‘company network’ feature at Tofler. This will give a sense of their investing style and you can evaluate whether it resonates with yours.

I recently came across this term ‘Shinese’ – a word used to refer to long-lasting companies. Interestingly, about 90% of all businesses worldwide that are more than 100 years old are Japanese. They all have fewer than 300 employees. They are also all family-owned businesses. We then studied the research done on these companies to find out what makes them stick longer. Here are some reasons we found that you could also apply to your business:

• Chasing growth cautiously: These businesses keep tight control of their costs and would make the decision to spend only when it is necessary and possible benefits have been thought through. Besides, they rarely borrow to expand and focus on operating cash flows. They believe that growth should be chased only when it can be done comfortably with internal accruals and cash flows. This is, of course, something that young entrepreneurs and startups might not appreciate but the family-owned businesses that are already established would.
• Continuous improvement in the product: These businesses have continuously improved their products or services, while also evolving them with the change in technology and consumer needs. Some of them like bakeries, restaurants focus on conserving the traditions to create their own niche.
• Building a lasting relationship with customers: They put effort into building a long-lasting relationship with the customers. This is their constant focus.
• They are seudo-professionally managed: This is quite interesting! Typically, Japanese business owners bequeath entire companies to their eldest sons. But if business owners don’t trust their sons to lead the company, then they can legally adopt a ‘son’ (often marries into the family) and he goes on to run the business. This is very different from how businesses are succeeded in India, but perhaps Indian business owners can think of other creative and workable ways to ensure that businesses are run by able people.

For a lot of businesses owners, preparing annual financial statements is a compliance formality to be fulfilled. Typically, this is how it goes – The senior accountant works with the auditors and replies to the queries. The accounts and the audit team prepares and finalises the financial statements. The business owners sit with the auditors in the last meeting to finalize the statements and sign them. And then it is over.

You do not read the financial statements to understand what they say. You might be looking at MIS reports, cash and working capital management but don’t review your own financial statements. This is an opportunity that you miss.

Analyzing financials provides a unique window into your business which can’t be substituted by MIS reports etc. They give you a bird’s eye view of all the functions of your business, from where you can dive into what you think needs attention. You can review the operational efficiency of your business from a financial angle, funding sources, operational and financial leverage, profitability and many other areas.

Besides, they also provide a common ground of comparison with other companies in your industry.  This comparison with the other similar companies or your competitors can provide crucial insights into your business performance, that no other internally generated MIS report can.

We all are vaguely aware of the concept of vendor assessment. However, customer assessment is a lesser-known concept. Because who cares to know more about a customer? He is business and one never lets go of the business, right? However, bad debts and default on payments are common problems. In this article, we talk about two essential things that you should check about your customer, every year, to re-evaluate your relationship with them. Ofcourse, you would know a lot just by working with them and through references. But would you be able to tell in time when things start moving downwards?

1. Financial growth and margins: Always check growth/decline in operating revenues of your customers in the last financial year. Then, compare it with other similar companies in the industry. Are the revenues declining? Is it a company-specific decline or is the whole industry facing a difficult time? Also, look at gross margins and net profit margins. Are they narrowing for the company or the industry? Looking at these things would at least warn you of any difficult times ahead and prepare accordingly.
2. Days payable outstanding ratio: This is an important indicator but few people take note of this ratio. It indicates the average number of days a company takes to make payments to its vendors. If your client has days payable outstanding of 45 days, then that’s the average time in which to expect the payment from him. You should check this ratio every year. If it is increasing, then that’s a sign of warning. When trouble starts, the first thing that gets affected is the days payable outstanding ratio.

In continuation with our financial statement analysis series, we looked at the ratio analysis and two key ratios used for analysis in the last article. In this article we explore the other two key ratios that are used, viz., activity ratio and the solvency ratio.

Activity Ratio

These ratios indicate the relative efficiency of the company based on use of its assets present on balance sheet, and are frequent to determine and quantify whether the company’s management’s efforts are enough in generating revenues and cash.

This is the fundamental of any company; trying to turn the produced goods of into and revenue, so the investors can get the understanding of production efficiency by using ratios like asset-turnover ratio and inventory turnover ratio.

These ratios are most useful when the management of a company needs to compare the company with its competitors or the whole industry to measure whether the company’s functioning in a favorable manner or not.

Some of the ratios are:

1. Inventory Turnover Ratio: Typically, it details how much inventory is sold over a period of time. Usually, a higher ratio is preferred and indicates that more sales are being generated by using less amount of inventory. However, sometimes a very high inventory ratio could result in lost sales. This is always important to compare this ratio with the industry benchmark to assess the successful management of inventory.

Formula: Inventory Turnover Ratio= Sales/Inventory

2. Receivables Turnover Ratio: It indicates the efficiency of the company to manage the credit it issues to customers in the form of collection of cash from customers buying goods or services on credit. It creates the relationship between the average debtors and the credit sales made over a period of time.

Formula: Receivables Turnover Ratio= Net Credit Sales/Average Accounts receivables

3. Average Collection Period: It indicates the approximate amount of time that it takes in collection of credit it issued to customers. It also indicates the ability of management to collect and sustain the inflow of cash in the company.

Formula: Average Collection Period= (Days X Average amount of accounts receivables)/Net credit sales

4. Average Payment Period: It again helps to indicate the short-term liquidity of the company and used to know in how many days does the company pay its outstanding dues to suppliers. It calculated from dividing net credit purchase over a period by average payable amount of suppliers over that same period.

Formula: Average Payment Period= Total net credit purchases/Average account payable

5. Asset Turnover Ratio: It is a ratio used to measure the operating effectiveness and efficiency of the company to generate net sales from total amount of assets held by the firm. Higher asset turnover ratio is better for the company.

Total Assets: It includes fixed assets (net of depreciation) and current assets

Formula: Fixed Asset Turnover Ratio= Net Sales/Total Asset

6. Working Capital Turnover Ratio: It indicates the efficiency of management of company to generate the net revenue by using the invested working capital in the company. It could be used by analysts to compare the data within the company to know about the trend or with the industry benchmark to know improve or deteriorate in ratio.

Formula: Working Capital Turnover Ratio= Sale/Working Capital

Where working capital is difference between current assets and current liabilities.

7. Fixed Asset Turnover Ratio: It is a ratio used to measure the operating effectiveness and efficiency of the company to generate net sales from fixed asset investment, namely property, plant and equipment, net of depreciation. Higher fixed asset turnover ratio is better for the company.

Formula: Fixed Asset Turnover Ratio= Net Sales/Net Fixed Assets

Solvency Ratio

Solvency refers to the ability of the company to pay its long-term debt on time. It indicates the company’s financial strength and sufficient flow of cash to meet paying off its debt and other obligation. It relates the net income after tax but before debt with all the liabilities of the company. However, this ratio is an extensive measure of solvency because it emphasis on the calculation of cash flow rather than on net income by including depreciation to assess the companies capacity to stay solvent.

Evaluating cash flow rather than net income is a better thing because it may happen that the companies incurring large amount of depreciation for their assets but have low level of actual profitability. On the other hand, measuring the company’s solvency by considering all its liabilities rather than debt alone, since it may be possible that the company have low debt but poor cash management of its account payable.

Using these ratios, a company should be compared with its competitors in the same industry for a better result.

Some ratios are given below:

1. Debt-Equity Ratio: It indicates the level of leverage of the company, calculated by the dividing company’s total debt by its shareholder’s fund (equity capital + reserve and surplus). It indicates that how much of the company’s total assets are financed by debt in comparison with the amount of shareholder’s equity.

Formula: Debt Equity Ratio= Total Debts/Shareholder’s Equity

2. Time Interest Earned Ratio: It indicates the coverage of debt interest obligation from the company’s earnings before interest and tax. It also shows the company’s ability to generate and sustain sufficient pretax and interest earnings. The downfall of ratio may result in bankruptcy. It is also known as interest coverage ratio.

Formula: Time Interest Earned Ratio= Earnings before interest and tax/Total Debt

3. Proprietary Ratio: It determines the realization percentage of common stockholders in assets of the company in the event of liquidation. It indicates the security about the common stockholder’s equity.

Stockholder’s Equity: Sum of common stock, additional paid in capital and retained earnings

Formula: Return on Common Stockholders Equity Ratio= Total Stockholder’s Equity/Total Assets

4. Fixed Asset to Equity Ratio: It indicates the amount of equity invested by the company in fixed assets. It could also be seen as the solvency of shareholder’s funds against fixed assets. This ratio could help or hurt the company’s efforts to attract additional investors. This ratio is relatively more frequent is use, since every investors do have more concerned about the principal amount of investment made by him rather than with the earnings on his investment.

Net Fixed Assets: Fixed assets net of depreciation (Gross Value – Dep. = Net Block)

Formula: Fixed Asset to Equity Ratio= Net Fixed Assets/Shareholder’s Equity

5. Current Asset to Equity Ratio: It indicates the amount of shareholder’s equity that’s invested in current assets.

Formula: Current Asset to Equity Ratio= Current Assets/Shareholder’s Equity

6. Capital Gearing Ratio: It stages the degree to which a company’s activities are funded by the shareholder’s and how much through borrower’s fund. It also helps to quantify the degree of financial leverage in the company. A high leverage could be more troubling to make downside effect on the business cycle of the company because the company has to pay its interest liabilities irrespective of low revenues, but if done right, it could leverage profitability to higher than before.

Formula: Capital Gearing Ratio= (Long term debt + Short term debt + Bank overdraft)/Shareholder’s Equity

Conclusion                                                                                                                                           

• Ratio analysis is the most common and popular tool used for comparing and analyzing a company’s performance to a peer or with its own performance from an earlier period. It allows analysts and investors to make a better understanding of a company’s working, and take better-judged decisions. It not only helps to analyze each corner of financial statements but also judge the financial trend of a company in the coming years.
• Having said that, it is more difficult to find an adequate standard for comparison; to monitor any improvement or deterioration in the ratio in the next period.
• If there is sustainable difference between companies by size, style of management and service or product, comparison will be more difficult.
• There is no definite process set for performing ratio analysis, an analyst should perform it by his/her own knowledge and expertise; therefore, we can say, it should not be a definite answer of performance of enterprise.

For Annual Reports, Balance Sheets, Profit & Loss, Company Research Reports, directors and other financial information on ALL Indian Companies, head over to www.tofler.in – Business Research Platform.

Author– Harsh is a CA final aspirant with a Bachelor degree in Law. Nothing makes Harsh happier than writing on his field that can enhance his readers’ domain know-how. He loves to play with numbers and learn new things.

Editor –  Anchal, co-founder at Tofler, is a CA, CS and has more than 5 years experience in company analysis. She likes to explore and track companies, their performance and senior management.

Ratio analysis is one of the most widely used technique for analyzing financial statements. In this article we explore what ratio analysis is, its categories and two of the key ratios to look at- liquidity and profitability.

Ratio Analysis

Ratio analysis is a technical and quantitative analysis of a company’s financial statements that is used by several investors to obtain key indications about performance of the firm in several areas.

It is a tool that’s used for making comparisons across the companies within one industry or across the sector for the same company. The financial decisions of the investor are highly affected by these ratios. It facilitates the comparison of different sized firms, too. These can also be used in trend analysis to check the areas where the performance has improved or deteriorated over time.

Liquidity ratio                                                                                                       

It is a tool to measure the adequacy of current assets, and helps to evaluate the ability of businesses to pay its short-term debt. These ratios measure the short-term solvency of the business such as maintaining sufficient current and liquid assets to pay its short-term debts is considered to have a strong solvency.

Financial Institutions and suppliers of goods or services (on credit) are often checking these ratios to estimate the solvency of the business, to check that the assets of the business are sufficient to pay its current obligations. Commercial banks and supplier might not be willing to offer loans to businesses with weak short-term solvency.

Liquid ratios are not true measures of the liquidity of the business because they only tell about the quantity of the liquid assets and not about its quality. Therefore, these should be used with care, and for a better interpretation and analysis, these should be used in combination with the activity ratios (later discussed).

Important liquid ratios are given below:

1. Current Ratio: Also known as working capital ratio, this ratio is based on items from balance sheet and it tries to compare the current and liquid assets (cash, cash equivalent, debtor) with the current obligations that are payable within a short period of time, usually a year. This ratio tells about the short-term solvency, ability to meet the current obligations of the business.

Formula: Current Ratio= Current assets/Current liabilities

2. Quick Ratio: It is one of the most important ratios to test the ability of business to meet its short-term obligations on time. It shows a relationship between the liquid asset and current liabilities present in the business.

Liquid assets: Total Current assets minus inventories and prepaid expenses.

Formula: Quick Ratio =  Liquid assets/Current liabilities

3. Absolute Liquid Ratio: This ratio only considers the cash and cash equivalents for measuring the ultra- short-term liquidity of the business.

Absolute liquid Asset: Liquid assets minus accounts receivable (including bills receivables).

Formula: Absolute liquid ratio= Absolute liquid assets/Current liabilities

4. Current Cash Debt Coverage Ratio: This ratio shows a relationship between net operating cash generated over a particular period to average current liabilities (opening current liabilities + closing current liabilities)/2

It indicates the ability of the business unit to pay its current liabilities using cash generated from day-to-day business operations.

Formula: Current cash debt coverage ratio= Net cash provided by operating activities/Average current liabilities

Profitability Ratio                                                                                               

Profit is the key objective of all businesses. To survive and thrive, all businesses need a consistent and sufficient amount of profit over a period of time with improvements moving ahead.

These ratios help in determining the efficiency of business to use its resources in generating profit and increasing shareholder value. Almost all the parties related to a business use profitability ratios for valuation purposes and understanding the success or failure of business operations against its competitors.

A strong profitability trend ensures high dividend income and appreciation in the value of common stock holders. Management needs to ensure sufficient profit is generated to pay the dividend or to reinvest a portion in the business to increase the work capacity and improve the overall financial prospects of the business in the near future. Strong profitability also ensures the creditors and outside provider of financing safety regarding their fund and income as well as smoother running of the business.

Important profitable ratios are given below:

1. Net Profit ratio: It is a ratio between net profit after tax and net sales (denominator). The purpose of this ratio is to evaluate the profits from its primary operating activities. Higher net profit ratio indicates the efficient management of the affairs of business with better control on cost.

Net profit: Gross profit minus non-operating revenues and expenses (or Total revenue less total expense during the period    

Formula: Net profit ratio= Net profit after tax/Net sales

2. Gross Profit Ratio: It is also known as ‘Gross Margin’ ratio. This ratio is used to assess the company’s financial health by diagnose the money left after accounting adjustments of Cost of Goods Sold (COGS), the core expenditure for day to day production. It disclosed the capacity of company to pay additional expenses and future savings.

Formula: Gross Profit ratio= (Revenue – COGS)/Revenue

3. Price Earnings Ratio: This is the most useful and frequently used ratio for investors, to judge the share price of the company – whether it is overvalued or undervalued in the market. This ratio enables the investor to know about his earning on per rupee of investment in the share price of a company.

Formula: Price Earnings Ratio= Market Price/Earnings per share

4. Operating Ratio: This ratio defines the operating efficiency of the management of the company; managing to reduce the expenses and generate profit of the company while revenues are decreasing. The smaller ratio is better for the company. Investors should be aware that this ratio does not include finance cost.

Formula: Operating Ratio= Operating Expense/Net Sales

5. Expense Ratio: This ratio defines the measure of costs for an investment company to operate a mutual fund. An asset management company is concerned with the operating cost and other cost incidental thereto of a mutual fund, those are taken out of a fund’s asset. It is also known as ‘management expense ratio’.

Formula: Expense ratio= Administrative and Operating Expenses/Average of Fund’s Asset

6. Dividend Yield Ratio: It comprises the per share dividend income for an investor. By using this metric, investor can analyze the return on his investment in form of dividend income compared to price paid by him/her in the market. This could be a better tool to compare two different investments on the basis of their dividend generating capacity, like equity or mutual fund.

Formula: Dividend Yield= Annual Dividend Per Share/Market  Price per Share

7. Dividend Payout Ratio: It presents the percentage of net income a company is paying in the form of dividend to its shareholders. The ratio also describes the financial strength of the company and prospects for maintaining or improving its dividend payout in future. High payout ratio may not be a better indication about a company, due to the fact that the company is using less percentage of net income to reinvest in company growth. A company may decide to retain more in order to invest for business expansion in the coming period

Formula: Dividend Payout Ratio= Annual Dividend paid/Earnings per Share

8. Return on Capital Employed Ratio: This ratio indicates the operating effectiveness of the company and how efficient the company is in using its capital employed in order to generate the earnings and increase the value of shareholders’ stake. Higher the ratio, better it is for the company. It is a popular ratio used to compare two different companies under the same industry or performance of the same company for two different periods to analyze the increase or decrease in return.

Earnings before Interest and Tax: Revenue less COGS and operating expenses

Capital Employed: Total Assets less Current Liabilities

Formula: Return on Capital Employed= Earnings before interest and tax/Capital Employed

9. Earnings Per Share: It is a portion of company’s profit after dividend allocated to equity shares: allocated to the outstanding share of common stock per share. It is more accurate to use weighted average number of shares outstanding over the term, because the number of shares outstanding can different over time. It also includes ‘Diluted EPS’. Diluted EPS expands on the basic EPS by considering the expected conversions of shares of convertible or warrants outstanding in the outstanding number of shares. EPS is also the most important metric to determine the share price, by used in price-earnings ratio.

Formula: EPS= Earnings attributable to common stock/Weighted average number of outstanding common share

10. Return on Equity Ratio: This is another tool to quantify the efficiency of company in generating profits, except it only considers the equity portion of capital invested by the shareholders. It could also be used in comparison between two companies having same size of equity capital on the basis of highest ROE.

Formula: ROE= Net Income/Shareholder’s Equity

11. Return on Common Stockholders Equity Ratio: It determines the realization percentage of earnings generated by the company for common stockholders.

Stockholder’s Equity: Sum of common stock, additional paid in capital and retained earnings

Formula: Return on Common Stockholders Equity Ratio= (Net Income – Preferential dividend)/Average common stockholders’ equity

In the next part, we will look at the two other important ratios- activity and solvency.

For Annual Reports, Balance Sheets, Profit & Loss, Company Research Reports, directors and other financial information on ALL Indian Companies, head over to www.tofler.in – Business Research Platform.

Author– Harsh is a CA final aspirant with a Bachelor degree in Law. Nothing makes Harsh happier than writing on his field that can enhance his readers’ domain know-how. He loves to play with numbers and learn new things.

Editor –  Anchal, co-founder at Tofler, is a CA, CS and has more than 5 years experience in company analysis. She likes to explore and track companies, their performance and senior management.

In a country obsessed with cricket, Indian Premier League, IPL has managed to offer the perfect mix of cricket and entertainment. It is among the top 50 sports league across the globe in terms of revenue and the 6^th most watched sports league globally. Needless to say it has become a great money making proposition for the BCCI and the participating franchisees. But how much money does IPL make? In this article we look at the richest cricket league in the  .

About IPL financial performance

As per the latest available financials published by the BCCI, [tweetability]the seventh season of the IPL held in April- May 2014 generated income of INR 999.6 crores for the BCCI[/tweetability] as against INR 1194.7 crores the previous year. In the same period, the surplus from IPL stood at INR 127 crores. Indeed the BCCI has recorded significant revenue jump since the inception of the IPL.

The first season of IPL held in April- May 2008, generated a surplus of INR 15 crores for the BCCI. The second season that was shifted to South Africa resulted in a deficit of INR 42 crores. But since the third season held in 2010, the IPL has consistently generated surplus in north of INR 100 crores. In fact the surplus alone stood at INR 335 crores for the 6^th season of the IPL.

The IPL Teams

The current version of the IPL has 8 participating teams, 2 of which- Gujarat Lions and Rising Pune Suprgiants played their first season in the IPL. Of the remaining teams, Sunrisers Hyderabad have played in 3 previous seasons, while the other 5 teams have been part of the league since inception. Following is the list of teams in the current IPL and their respective owners:

How the teams make money

[tweetability]The majority of the revenue comes in the form of central rights– the share in the IPL revenue- that the BCCI pays to the teams[/tweetability]. Apart from this, teams also have sponsorship income on completion of the terms of the sponsorship agreements which is based upon contractual amounts previously established with sponsors. Income from the sale of tickets are also reported on the income statement of the companies. Other sources include income from trading players with the other franchises and merchandise sales. The winning teams also realize revenue from the prize money from winning the IPL. [tweetability]KKR which won the IPL 7 took home INR 39 crores as the prize money[/tweetability].

IPL for the franchises

A look at the financial performance of the teams would show that IPL has turned out to be a fruitful venture for them. The consistent teams of the IPL have been raking in the moolah for the promoters. The infographic captures their financial performance. Interestingly, only KKR and KXIP were in the green as far as profits were concerned in FY 2014-15.

The team which has consistently been able to generate profits for the franchisee has been KKR. KKR’s revenues showed an impressive jump to INR 169 crore for the year ending March 2015 against INR 129 crore the year before. [tweetability]While KKR is the most profitable among all the cricket franchisees, it has also managed to keep the company in the green over the last four years[/tweetability]. KKR might have benefited time and again due to its association with Bollywwod stars like Shahrukh Khan and Juhi Chawla. The six-week tournament that ended in May 2014 had seen KKR emerge as the champions for the second time. KKR has a following of 14.3 million on Facebook.

RCB on the other hand have had a rough ride in the IPL. The star studded team has not managed to generate big bucks for the franchisee. The income remained flat around the INR 90 crores mark.  [tweetability]RCB reported revenue of INR 94 crores in FY 2014-15[/tweetability] against INR 93 crores in the previous fiscal. Their losses soared to INR 30 crores in the same period. The biggest expense for the team was the player fees, which was INR 67 crores in the period.

Delhi Daredevils also saw their revenue decline after they finished at the bottom in IPL 2014. Their revenue fell from INR 159 crores in FY 2013-14 to INR 117 crores in FY 2014-15. The company also reported a loss of INR 20 crores in the period after being in the green the previous year. The profit in FY 2013-14 stood at INR 7 crores. Incidentally, in 2013 also DD were at the bottom of the points table.

While not all the franchisees have been able to become profitable, there is no doubt on the money making ability of the IPL. Add to that the fact that IPL also goes beyond revenue for the promoters. [tweetability]The right to operate the franchises provides them with a platform to build corporate and brand image as a pan India company[/tweetability].

For Annual Reports, Balance Sheets, Profit & Loss, Company Research Reports, directors and other financial information on ALL Indian Companies, head over to www.tofler.in – Business Research Platform.

Author– Vishal, a Sci-fi enthusiast, engineer and an MBA, combines his eye for numbers with a natural flair for storytelling to churn out Tofler’s blogs.

Tofler makes no claim of ownership or affiliation with any trademark / logo (REGISTERED OR UNREGISTERED) used in this article. Trademarks or logos, if any, published on this page belong to their respective owners.

Carzonrent, which owns and operates radio taxi service Easy Cabs, has reported revenue of INR 263 crores in FY 14-15. Easy Cabs which operates in Delhi, Bangalore, Hyderabad and Mumbai, contributed 19% to the company’s revenue. Interestingly, the company made INR 175 crores from renting cars alone.

Financial Performance of Carzonrent

The company reported revenue of INR 263 crores in FY 14-15, a decline of 11% over the previous year’s INR 295 crores. This decline is however, due to the company selling off its Operating Lease segment for INR 80 crores. This also resulted in the company’s profits jumping from INR 6 crores in FY14 to INR 58 crores in FY15.

67% of the revenue came from the car rental services and 19% from taxi services. Following is a break-up of the revenue from operations:

The expenses for the company stood at INR 271 crores, which mainly consisted of the ‘Vehicle running expenses’ at INR 117 crores and employee expenses at INR 27 crores.

About Carzonrent

Carzonrent operates car rental, self-drive (“Myles”) and radio taxi (“Easy Cabs”) services across India. Starting out in 2000, it is among the oldest players and the market leaders in the segment. The company started with car leasing and entered into taxi segment with Easy Cabs in 2006 and self-driven segment in 2014 with Myles. It has its own dedicated fleet of 6500 cars to provide the services. It has raised INR 55 crores from Sequoia (in 2006) and BTS India (in 2011).

Other players in the car rental segment include Zoomcar, JustRide, Savaari among other smaller players and the unorganized operators as well. In the taxi segment it faces stiff competition from the heavily funded players like Ola, Uber and Meru Cabs for a share of the INR 50,000 crore industry.

What distinguishes Carzonrent from its peers is its strengths in terms of corporate and retail customer base, airport presence, partnerships with airlines and hotels, chauffeur drive and self-drive services, own dedicated fleet of cars, visible and recognized brands and  innovative technology platforms.

The ground transportation industry has been attracting big players with heavily-funded pockets. Carzonrent has bet big on its self-drive/ car sharing service “Myles”, and plans to expand the operations to 100 cities across India with a fleet of 5000 cars. It also acquired Bangalore based ride sharing startup Ridingo in April 2015.

For Annual Reports, Balance Sheets, Profit & Loss, Company Research Reports, directors and other financial information on ALL Indian Companies, head over to www.tofler.in – Business Research Platform.

Author– Vishal, a Sci-fi enthusiast, engineer by mistake and writer by choice, combines his eye for numbers with a natural flair for storytelling to churn out Tofler’s blogs.

Editor –  Anchal, co-founder at Tofler, is a CA, CS and has more than 5 years experience in company analysis. She likes to explore and track companies, their performance and senior management.

Tofler makes no claim of ownership or affiliation with any trademark / logo (REGISTERED OR UNREGISTERED) used in this article. Trademarks or logos, if any, published on this page belong to their respective owners.

Naaptol saw a 2.3 times rise in its revenue for the FY 14-15 as its revenue grew to INR 289 crores. The company is currently the third largest player in the digital commerce platform market with presence across TV, web and mobile.

Financial Performance of Naaptol

Naaptol reported a revenue of INR 289 crores against a loss of INR 43 crores. Last year’s revenue and PAT figures stood at INR 128 crores and INR 57 crores, respectively. This was revenue growth of 125% in the period.

Two largest expenses for the company were media and logistics expenses. The media expenses for the company stood at INR 148 crores while logistics expenses at INR 103 crores. Here is a breakup of the major expenses:

About Naaptol

Naaptol is owned and operated by Naaptol Online Shopping Pvt. Ltd. Founded by Manu Agarwal in 2008, it is a comparison based social shopping portal and is available through website, mobile app and TV channel Naaptol Blue. It competes in its segment with players like Shop CJ Live, Homeshop 18, DEN-Snapdeal TVShop among others. While Naaptol Blue is a Hindi language channel, it also has vernacular presence with separate channels in Tamil, Malyalam, Telugu and Kannada. Over the years the company has transformed from a price comparison site to be present across multiple channels.

The company has secured a total funding of INR 665 crores from various investors including Mitsui & Co., NEA FVCI Ltd.  and Canaan Partners. The latest round of funding was secured in October 2015 for INR 343 crores from Mitsui & Co.

The company competes closely with veteran players like Homeshop 18 and Shop CJ Alive, which have been operational for 10 and 8 years, respectively and new players like DEN-Snapdeal TV Shop (incorporated in February 2014) and Best Deal TV (incorporated in December 2014). Compared to Naaptol, FY 14-15 revenue figures for Homeshop 18 and Shop CJ Alive stood at INR 444 crores and INR 561 crores, respectively. The three companies hold a market share of about 85% in TV home shopping market.

In the Indian context, though internet penetration is increasing rapidly, TV as a medium still has a wider reach across India. According to Broadcast Audience Research Council, the estimated television audience stands at 153 million homes. The TV shopping market is mainly driven by the housewives. The industry is expected to reach INR 50,000 crores by 2020 and has attracted players like Snapdeal to have their presence in the medium.

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Author– Vishal, a Sci-fi enthusiast, engineer by mistake and writer by choice, combines his eye for numbers with a natural flair for storytelling to churn out Tofler’s blogs.

Editor –  Anchal, co-founder at Tofler, is a CA, CS and has more than 5 years experience in company analysis. She likes to explore and track companies, their performance and senior management.

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