GOODYEAR (I) 2018-19 Annual Report Analysis

Mon, 16 Sep

GOODYEAR (I) has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

GOODYEAR (I) Income Statement Analysis

• Operating income during the year fell 88.5% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 18.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 85.7% in FY19 as against 12.1% in FY18.
• Depreciation charges increased by 13.5% and finance costs increased by 4.8% YoY, respectively.
• Other income grew by 2.8% YoY.
• Net profit for the year declined by 21.5% YoY.
• Net profit margins during the year grew from 7.6% in FY18 to 44.5% in FY19.

GOODYEAR (I) Income Statement 2018-19

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Net Sales	Rs m	16,647	1,919	-88.5%
Other income	Rs m	367	377	2.8%
Total Revenues	Rs m	17,013	2,296	-86.5%
Gross profit	Rs m	2,017	1,645	-18.4%
Depreciation	Rs m	362	410	13.5%
Interest	Rs m	29	30	4.8%
Profit before tax	Rs m	1,993	1,581	-20.6%
Tax	Rs m	693	561	-19.1%
Profit after tax	Rs m	1,300	1,021	-21.5%
Gross profit margin	%	12.1	85.7
Effective tax rate	%	34.8	35.5
Net profit margin	%	7.6	44.5

GOODYEAR (I) Balance Sheet Analysis

• The company's current liabilities during FY19 down at Rs 4 billion as compared to Rs 5 billion in FY18, thereby witnessing an decrease of -6.6%.
• Current assets rose 1% and stood at Rs 10 billion, while fixed assets rose 11% and stood at Rs 3 billion in FY19.
• Overall, the total assets and liabilities for FY19 stood at Rs 13 billion as against Rs 13 billion during FY18, thereby witnessing a growth of 3%.

GOODYEAR (I) Balance Sheet as on March 2019

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*	% Change
Networth	Rs m	8,022	8,671	8.1
Current Liabilities	Rs m	4,654	4,348	-6.6
Long-term Debt	Rs m	0	0	0.0
Total Liabilities	Rs m	12,976	13,305	2.5
Current assets	Rs m	9,900	9,951	0.5
Fixed Assets	Rs m	2,724	3,012	10.6
Total Assets	Rs m	12,976	13,305	2.5

GOODYEAR (I) Cash Flow Statement Analysis

• GOODYEAR (I)'s cash flow from operating activities (CFO) during FY19 stood at Rs 566 million on a YoY basis.
• Cash flow from investing activities (CFI) during FY19 stood at Rs -356 million, an improvement of 61.3% on a YoY basis.
• Cash flow from financial activities (CFF) during FY19 stood at Rs -389 million on a YoY basis.
• Overall, net cash flows for the company during FY19 stood at Rs -179 million from the Rs 1 billion net cash flows seen during FY18.

GOODYEAR (I) Cash Flow Statement 2018-19

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-18	Mar-19
Cash Flow from Operating Activities	Rs m	1,823	566	-69.0%
Cash Flow from Investing Activities	Rs m	-220	-356	-
Cash Flow from Financing Activities	Rs m	-373	-389	-
Net Cash Flow	Rs m	1,230	-179	-

Current Valuations for GOODYEAR (I)

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 44.2, an decline from the EPS of Rs 56.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 935.5, stands at 20.8 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.8 times, while the price to sales ratio stands at 12.7 times.
• The company's price to cash flow (P/CF) ratio stood at 15.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Sales per share (Unadj.)	Rs	721.6	83.2
TTM Earnings per share	Rs	56.3	44.2
Diluted earnings per share	Rs	56.3	44.2
Price to Cash Flow	x	13.0	15.1
TTM P/E ratio	x	20.8	20.8
Price / Book Value ratio	x	2.9	2.8
Market Cap	Rs m	21,582	21,582
Dividends per share (Unadj.)	Rs	13.0	13.0

Ratio Analysis for GOODYEAR (I)

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 2.3x during FY19, from 2.1x during FY18. 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 53.2x during FY19, from 70.0x during FY18. 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 11.8% during FY19, from 16.2% during FY19. 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 18.6% during FY19, from 25.2% during FY18. 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 7.9% during FY19, from 10.2% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-18*	12 Mar-19*
Current ratio	x	2.1	2.3
Debtors’ Days	Days	46	463
Interest coverage	x	70.0	53.2
Debt to equity ratio	x	0.0	0.0
Return on assets	%	10.2	7.9
Return on equity	%	16.2	11.8
Return on capital employed	%	25.2	18.6

To see how GOODYEAR (I) has performed over the last 5 years, please visit here.

GOODYEAR (I) Share Price Performance

Over the last one year, GOODYEAR (I) share price has moved down from Rs 997.5 to Rs 935.5, registering a loss of Rs 62.0 or around 6.2%.

Overall, the S&P BSE SENSEX is down 2.4% over the year.

(To know more, check out historical annual results for GOODYEAR (I) and quarterly results for GOODYEAR (I))