Was running through the 2007 Ranbaxy balance sheet dated Dec 31st 2007. A few interesting things that stuck me.
The PBT for the year was about 998 crores out of which Rs 443 crores was on account of other income namely foreign exchange gain which is nearly 50%.
The consolidated balance sheet size is about Rs 7274 crores. Out of this Rs 4269 crores is invested in its Netherlands subsidiary which is about 58 % of the balance sheet size. The subsidiary clocked a net profit of about 105 crores. Not exactly the greatest of ROCE.
The Fixed asset base of the consolidated company is about Rs 4204 crores. Out of which Goodwill is about Rs 1929 crores which is nearly 45% of the total fixed asset base.
To be honest I haven’t dwelled too much into understanding the company or can claim any great understanding of the business but prima facie the way the balance sheet is looking at this point of time I m a lil sceptical. Not very comfortable in the way the company is allocating capital.
The PBT for the year was about 998 crores out of which Rs 443 crores was on account of other income namely foreign exchange gain which is nearly 50%.
The consolidated balance sheet size is about Rs 7274 crores. Out of this Rs 4269 crores is invested in its Netherlands subsidiary which is about 58 % of the balance sheet size. The subsidiary clocked a net profit of about 105 crores. Not exactly the greatest of ROCE.
The Fixed asset base of the consolidated company is about Rs 4204 crores. Out of which Goodwill is about Rs 1929 crores which is nearly 45% of the total fixed asset base.
To be honest I haven’t dwelled too much into understanding the company or can claim any great understanding of the business but prima facie the way the balance sheet is looking at this point of time I m a lil sceptical. Not very comfortable in the way the company is allocating capital.
1 comment:
We seem to focus more on growth without understanding whether that growth is coming at the expense of reduced ROE & ROCE.
It is important to see whether the company is deploying capital at more than the cost of capital.
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