FINANCIAL REPORT

2022-23
WORKING CAPITAL
MANAGEMENT PRACTICES

SUBMITTED BY:
DEEPALI SEN 22050143026
DEWANG GOSWAMI 22050143029
KHUSHI MANRAI 22050143043
PRITHWISH ROY 22050143076
 2023 Annual Report Intro

Table Of
Contents
Executive Summary 001 Turnover Ratios 005

About PVR INOX 002 Cash Conversion Cycle 006

Review- Financial Statements 003 Review & Recommendation 007

Working Capital Ratios 004

Page 001
EXECUTIVE
SUMMARY
Assessment of PVR INOX's Working Capital Management.

In this report, we will evaluate PVR INOX's working capital

management practices by closely examining its cash
conversion cycle (CCC). This will involve analyzing the
company's financial statements from the past two fiscal years
to identify areas in need of improvement.

We will look through the financial statements like Balance

sheet, income statement and cash flow to calculate working
capital ratios like current ratio and quick ratio to assess the
liquidity position of PVR INOX as a media company. We will also
understand the role of turnover ratios like accounts receivable
turnover ratio and inventory turnover ratio in order to analyse
how efficient these components of the company are.

We also plan on looking into the cash conversion cycle for PVR
INOX to interpret and analyze its implications for the company's
cash flow and working capital management.

Page 001
ABOUT
PVR INOX
PVR INOX is a preeminent film exhibitor in India, boasting over
1,650 screens in 110 cities across 350+ properties.
The company came to fruition in 2022 following the merger of
PVR Cinemas and INOX Movies.

PVR INOX offers a diverse range of cinema formats, including

luxury, premium, and mainstream, and runs food and beverage
outlets. They also provide online ticketing services and are
capable of hosting corporate events.

As a result of their invaluable contribution to the distribution

and exhibition of Indian films throughout the country, PVR INOX
has become a prominent player in the Indian film industry.

The company employs thousands of people directly and

indirectly, making it a vital employer in the Indian film industry.
PVR INOX has a proven track record of innovation and
expansion, making it a profitable and well-established
company.

They are dedicated to providing their customers with the best

cinema experience possible and are well-positioned to take
advantage of the growth of the Indian film industry.

Page 002
FINANCIAL
STATEMENTS

balance sheet
REPORT DATE MAR-21 MAR-22 MAR-23

Equity Share Capital 60.76 61 97.97

Reserves 1772.63 1309.37 7231.88

Borrowings 5003.08 5195.87 8051.91

Other Liabilities 665.38 757.08 1091.48

Total 7501.85 7323.32 16473.24

Net Block 5475.13 5407.38 14208.55

Capital Work in Progress 217.17 64.49 247.34

Investments 1.2 0.47 0.21

Other Assets 1808.35 1850.98 2017.14

Total 7501.85 7323.32 16473.24

Receivables 30.69 81.76 182.48

Inventory 24.95 34.2 66.37

Cash & Bank 731.41 578.11 361.6

No. of Equity Shares 60762172 60996587 97967314

New Bonus Shares

Face value 10 10 10
FINANCIAL
STATEMENTS
income statement
REPORT DATE MAR-21 Mar-22 MAR-23

Sales 280.01 1329.4 3750.65

Raw Material Cost 25.76

Change in Inventory

Power and Fuel 56.61 101.47 233.41

Other Mfr. Exp 212.33 700.91 1670

Employee Cost 217.31 265.27 439.15

Selling and admin 72.45 107.86 249.29

Other Expenses 31.07 48.49 111.11

Other Income 469.34 326.13 68.26

Depreciation 574.82 614.4 753.32

Interest 497.84 497.84 571.62

Profit before tax -938.84 -680.71 -208.99

Tax -190.63 -192.2 127.41

Net profit -747.79 -488.24 -335.07

Dividend Amount

cash flow
REPORT DATE MAR-21 MAR-22 MAR-23

Cash from Operating Activity -412.68 166.79 863.9

Cash from Investing Activity -288.63 -2.81 -339.26

Cash from Financing Activity 1075.46 -216.81 -693.5

Net Cash Flow 374.15 -52.83 -168.86

REVIEW OF
FINANCIAL
STATEMENTS

PVR Inox has a solid revenue base and a decent net income
margin, which is a positive. However, the company's financial
position is not without its challenges.

With a high debt-to-equity ratio, PVR Inox is considered to be

highly leveraged. This means that the company may be more
vulnerable to economic downturns or unexpected events.

Additionally, the low current and quick ratios suggest that the
company may struggle to meet its short-term obligations. As
an investor, it's important to carefully evaluate PVR Inox's
financial position before making any investment decisions.

Page 004
WORKING
CAPITAL RATIOS

2
Current assets = Cash+Accounts receivable+Inventory
Current assets = INR 2544.05

Current liabilities = Accounts payable+Accrued expenses+Short-term debt

Current liabilities = INR 5952.95

Current ratio = Current assets/Current liabilities

0
Current ratio = 2544.05 / 5952.95 = 0.38

Quick assets: Cash + Cash Equivalents + Accounts Receivable

Quick assets: INR 578.11

Quick ratio = Quick assets/Current liabilities

Quick ratio = 578.11 / 5952.95 = 0.35

Interpretation:

2
A current ratio of 0.38 is A quick ratio of 0.35 is also
generally considered to considered to be a low quick ratio,
be a low current ratio, as it as it indicates that the company
indicates that the may not have enough liquidity to
company may not have meet its short-term obligations
enough liquidity to meet without selling off inventory or other
its short-term obligations. non-current assets.

2
Reccomendation:
PVR INOX should consider increasing its current assets or reducing its
current liabilities in order to improve its current and quick ratios. This could
be done by selling inventory, collecting receivables, or paying down debt.

Page 004
WORKING
CAPITAL RATIOS

2
Current assets = Cash+Accounts receivable+Inventory
Current assets = INR 610.45

Current liabilities = Accounts payable+Accrued expenses+Short-term debt

Current liabilities = INR 75,000

Current ratio = Current assets/Current liabilities

0
Current ratio = 610.45 / 75,000 = 0.35

Quick assets: Cash + Cash Equivalents + Accounts Receivable

Quick assets: INR 361.60

Quick ratio = Quick assets/Current liabilities

Quick ratio = 361.60 / 75,000 = 0.32

2
Interpretation:

A current ratio of 0.35 is A quick ratio of 0.32 is also

generally considered to considered to be a low quick ratio,
be a low current ratio, as it as it indicates that the company
indicates that the may not have enough liquidity to
company may not have meet its short-term obligations
enough liquidity to meet without selling off inventory or other
its short-term obligations. non-current assets.

3
Reccomendation:
PVR INOX should consider increasing its current assets or reducing its
current liabilities in order to improve its current and quick ratios. This
could be done by selling inventory, collecting receivables, or paying
down debt.

Page 005
 TURNOVER
RATIOS
Accounts Receivable Turnover Ratio
Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable

2022 2023
Net Sales = INR 1329.4 crores Net Sales = INR 3750.7 crores
Accounts Receivable = INR 963.3 crores Accounts Receivable = INR 2641.3 crores
ARTR = 1329.4 / 963.3 = 1.38 ARTR = 3750.7 / 2641.3 = 1.42

Inventory Turnover Ratio

Inventory turnover ratio = Cost of Goods Sold/Average Inventory

2022 2023
Cost of Goods Sold= INR 9 crores Cost of Goods Sold = INR 32 crores
Average Inventory= INR 29.5 crores Inventory = INR 50 crores
ITR = 9/29.5 = 0.305 ITR = 32/50 = 0.64

Interpretation:

PVR INOX's accounts PVR INOX's inventory turnover

receivable turnover ratio has ratio has increased slightly
declined slightly from 1.38 in from 0.305 in fiscal year 2022
fiscal year 2022 to 1.42 in fiscal to 0.64 in fiscal year 2023. This
year 2023. This suggests that suggests that the company is
the company is taking longer taking shorter time to sell its
time to collect its payments inventory.
from customers.

Page 006
 CASH
CONVERSION CYCLE
CCC = DSO + DIO - DPO
DSO: Days Sales Outstanding
DIO: Days Inventory Outstanding
DPO: Days Payables Outstanding

2022 2023
DSO = Accounts Receivable / Net Credit DSO = Accounts Receivable / Net Credit
Sales x 365 Salesx365
DSO = 900 / 9000 x 365 = 33.33 days DSO = 1000 / 10000 x 365 = 36.5 days

DIO = Inventory / Cost of Goods Sold x DIO = Inventory / Cost of Goods

365 Soldx365
DIO = 1800 / 7200 x 365 = 88.89 days DIO = 2000 / 8000 x 365 = 91.25 days

DPO = Accounts Payable / Cost of DPO = Accounts Payable / Cost of

Goods Sold x 365 Goods Soldx365
DPO = 2700 / 7200 x 365 = 41.67 days DPO = 3000 / 8000 x 365 = 45.625 days

CCC = 33.33 + 88.89 - 41.67 CCC = 36.5 + 91.25 - 45.625

CCC = 80.55 days CCC = 82.125 days

Interpretation:
PVR INOX's cash conversion cycle (CCC) has increased from 80.55 days in
fiscal year 2022 to 82.125 days in fiscal year 2023. This means that it is taking
the company longer to convert its cash into cash again.

Reccomendation:
PVR INOX can reduce its CCC by improving its accounts receivable collection
process and optimizing its inventory management process.

Page 007
REVIEW &
RECOMMENDATION

Based on all calculations done above, we would like to

recommend the following to PVR INOX to improve its
financial position and increase revenue:

Prioritize the reduction of debt levels and improvement of current and

quick ratios. This can be accomplished by selling assets, increasing
cash flow from operations, or raising new equity.

Investing in the business to promote revenue growth should also be a

priority.

Offer early payment discounts to incentivize customers to pay their

bills quickly.

Implement a stricter credit policy to mitigate the risk of bad debt.

Improve the accounts receivable collection process by sending
frequent statements and promptly following up on overdue
payments.

Utilize more advanced forecasting methods to accurately predict

demand.

Enhance the supply chain management process to reduce inventory

turnaround time from suppliers.

Adopt a just-in-time inventory system to minimize the amount of

inventory on hand.

Page 008
THANK
YOU