Cox & Kings Financial Ratios

DAYANANDA SAGAR COLLEGE OF ENGINEERING
Financial Ratio Analysis
Submitted To:
Mrs. Padma
Faculty Member
Department of MBA-VTU
Submitted By:
Mr.Santosh Hegde
1DS12MBA62
MBA 2nd
Semester

CONTENTS
1. About Cox & Kings
2. Balance Sheet for 2009-2012
3. Profit & Loss Account for 2009-2012
4. Cash Flow Statement for 2009-2012
5. Financial Ratios
Liquidity Ratio
Current Ratio
Quick Ratio
Long Term Solvency Ratio
Debt Equity Ratio
Interest Coverage Ratio
Turnover Ratio
Stock Turnover Ratio
Debtor’s Turnover Ratio
Total Assets Turnover Ratio
Fixed Assets Turnover Ratio
Profitability Ratios
Gross Profit Ratio
Net Profit Ratio
Operating Profit Ratio
Return On Capital Employed
Earnings per Share
Dividend Payout Ratio
6. Conclusion
7. Bibliography

About Cox & Kings Ltd
Cox And Kings is the longest established travel company in the world, its history stretching back
to 1758 when Richard Cox was appointed as regimental agent to the Foot Guards in India under
the command of Lord Ligonier.
By 1878, C&K were agents for most British regiments posted overseas, including the Royal
Cavalry, Artillery and Infantry, as well as the Royal Wagon Train and the Household Brigade.
The Royal Navy was next and in 1912, The Royal Air Force came under its wings.
Between 1750's and 1950's, Cox & Kings was witness to an exciting era in Indian history, and, in
its own way, helped to shape it. In 1947, the British administration departed, but bound by strong
ties to India, Cox & Kings stayed on and flourished. Today, Cox & Kings is a premium brand in
all travel related services in the Indian subcontinent, employing over 5000 trained professionals.
Its India operations are headquartered in Mumbai and have the status of a limited company. It
has over 12 fully owned offices in India across key cities such as New Delhi, Chennai,
Bangalore, Kolkata, Ahmedabad, Kochi, Hyderabad, Pune, Goa, Nagpur and Jaipur.
The worldwide offices are located in UK, USA, Japan, Russia, Singapore and Dubai. It has
associate offices in Germany, Italy, Spain, South Africa, Sweden and Australia.
The principal services offered by the company are:
Destination Management
Outbound Tourism
Business Travel
Incentive & Conference Solutions
Domestic Holidays
NRI
Trade Fairs
Foreign Exchange
Insurance

Balance Sheet Of Cox & Kings ---------------in Rs.Cr.------------------
Particulars Mar’12 Mar’11 Mar’10
12mnths 12mnths 12mnths
Sources Of Funds
Total Share Capital 68.26 68.26 62.92
Equity Share Capital 68.26 68.26 62.92
Share Application Money 0.00 0.00 0.00
Preference Share Capital 0.00 0.00 0.00
Init. Contribution Settler 0.00 0.00 0.00
Pref Share Application Money 0.00 0.00 0.00
Employee Stock Option 0.00 0.00 0.00
Reserves 1,124.11 1,136.25 744.14
Revaluation Reserves 0.00 3.34 3.05
Net worth 1,192.37 1,207.85 810.11
Secured Loans 3,271.27 544.33 294.60
Unsecured Loans 434.90 300.00 209.73
Total Debt 3,706.17 844.33 504.33
Minority Interest 0.00 0.00 0.00
Policy Holders Funds 0.00 0.00 0.00
Group Share in Joint Venture 0.00 18.13 4.75
Total Liabilities 4,898.54 2,070.31 1,319.19
Mar’12 Mar’11 Mar’10
Application Of Funds
Gross Block 5,137.91 401.56 351.22
Less: Accum. Depreciation 560.30 81.94 61.54
Net Block 4,577.61 319.62 289.68
Capital Work in Progress 123.75 64.12 20.45
Investments 304.17 211.23 258.38
Inventories 17.26 7.20 6.56
Sundry Debtors 715.06 407.74 302.04
Cash and Bank Balance 1,053.27 352.45 287.59
Total Current Assets 1,785.59 767.39 596.19
Loans and Advances 858.72 374.13 265.34
Fixed Deposits 0.00 606.51 85.76
Total CA, Loans & Advances 2,644.31 1,748.03 947.29
Deferred Credit 0.00 0.00 0.00
Current Liabilities 2,673.17 259.12 176.95
Provisions 78.13 35.00 34.37
Total CL & Provisions 2,751.30 294.12 211.32
Net Current Assets -106.99 1,453.91 735.97
Group Share in Joint Venture 0.00 19.78 12.65
Miscellaneous Expenses 0.00 1.65 2.08
Total Assets 4,898.54 2,070.31 1,319.21
Contingent Liabilities 149.84 15.02 15.75
Book Value (Rs) 87.34 176.45 128.26

Profit & Loss Account Of Cox & Kings ---------------in Rs.Cr.--------------
Income
Sales Turnover 837.94 495.61 399.66
Excise Duty 0.00 0.00 0.00
Net Sales 837.94 495.61 399.66
Other Income 134.85 37.03 41.52
Stock Adjustments 0.00 0.00 0.00
Total Income 972.79 532.64 441.18
Expenditure
Raw Materials 0.00 0.00 0.00
Power & Fuel Cost 0.00 0.00 0.00
Employee Cost 385.16 129.70 99.48
Other Manufacturing Expenses 0.00 0.00 0.00
Selling and Admin Expenses 0.00 115.35 92.69
Miscellaneous Expenses 285.47 21.54 20.45
Preoperative Exp Capitalized 0.00 0.00 0.00
Total Expenses 670.63 266.59 212.62
Operating Profit 167.31 229.02 187.04
PBDIT 302.16 266.05 228.56
Interest 184.29 54.39 26.97
PBDT 117.87 211.66 201.59
Depreciation 49.13 18.55 15.07
Other Written Off 0.00 0.00 0.00
Profit Before Tax 68.74 193.11 186.52
Extra-ordinary items -2.15 -0.54 0.00
PBT (Post Extra-ord Items) 66.59 192.57 186.52
Tax 39.64 62.63 51.69
Reported Net Profit 26.98 130.59 134.81
Share Of P/L Of Associates -14.62 1.50 0.96
Net P/L After Minority Int & Share Of Associates 74.90 128.97 133.85
Total Value Addition 670.63 266.59 212.63
Preference Dividend 0.00 0.00 0.00
Equity Dividend 13.65 6.83 6.29
Corporate Dividend Tax 2.21 1.11 1.05
Per share data (annualized)
Shares in issue (lakhs) 1,365.28 682.64 629.23
Earnings Per Share (Rs) 1.98 19.13 21.42
Equity Dividend (%) 0.00 0.00 0.00
Book Value (Rs) 87.34 176.45 128.26

Financial Ratios
Use of Financial Ratios:
 Liquidity Position
 Solvency Position
 Operating Efficiency
 Profitability
Limitations of Financial Ratios:
 Calculated from financial statements which are themselves subject to many limitations
 For analysis, many ratios & factors are to be considered
 Calculated ratios require comparison
 Various terms are to be explained for inter-firm comparison
 Price level to be considered while making comparison
 Ratio analysis is based on judgment of the analyst
Cash Flow Of Cox & Kings --------------in Rs.Cr.----------------
Net Profit Before Tax 68.74 193.10 186.51
Net Cash From Operating Activities -136.58 95.05 51.22
Net Cash (used in)/from Investing Activities -2660.39 -81.34 -339.92
Net Cash (used in)/from Financing Activities 2483.64 573.25 591.19
Net (decrease)/increase In Cash and Cash Equivalents -313.33 586.96 302.49
Opening Cash & Cash Equivalents 1327.73 373.85 71.36
Closing Cash & Cash Equivalents 1014.40 960.81 373.85

LIQUIDITY RATIOS / SHORT TERM SOLVENCY RATIOS
Current Ratio: The current ratio is popular financial ratio used to test a company’s liquidity by
deriving the proportion of current assets available to cover current liabilities
Formula:
Analysis: The Standard ratio in this case is 2:1. In the year 2010-2011, the ratio is higher than
2011-2012. It reflects under trading or unemployed or unutilized resources. This is a very bad
sign of management. It indicates a decrease in the working capital of Cox & Kings to pay out its
current obligations as compared to 2010-2011
Cause: In 2010-2011, Current Assets are proportionately higher than the years 2009-2010 &
2011-2012.
0
1
2
3
4
5
6
7
Mar'10 Mar'11 Mar'12
Current Ratio
Current Ratio Of Cox & Kings -------in Rs.Cr.--------
Current Ratio 0.85 5.94 4.48

Quick Ratio / Acid Test Ratio: Quick Ratio is the ratio of quick assets (generally current asset
less inventory) to current liabilities; indicates a company’s ability to satisfy current liabilities
with its most liquid assets
Formula:
Analysis: The standard ratio in this case is 1:1. This means for every Re.1 of Current Liabilities,
there should be Re.1 of Current Assets. This ratio is also used for testing the solvency of the
enterprise. The quick ratio value being higher than 1 indicates that the quick assets are enough to
pay out the quick liabilities. Its value in 2011-2012 has decreased over its value in 2009-2011
indicating a fall in the capacity of the company to pay out the obligations. Since the ratio is 0.95
the company needs to work on its liquidity ratio
Cause: In 2011-2012, the Liquid Assets are proportionately lower than the year 2009-2010 &
2010-2011.
0
1
2
3
4
5
6
7
Qucik Ratio
Quick Ratio Of Cox & Kings -------in Rs.Cr.--------
Quick Ratio 0.95 5.91 4.44

LONG TERM SOLVENCY RATIO
Debt Equity Ratio: Debt to Equity ratio indicates the relationship between the external equities
or outsiders funds and the internal equities or shareholders funds.
Formula:
Analysis: The standard ratio in this case is 0.5:1(Long-Term Debt: Shareholder’s Fund). The
position of the creditors will be uncomfortable if the ratio is higher than this.
0
0.5
1
1.5
2
2.5
3
3.5
Debt Equity Ratio
Debt Equity Ratio Of Cox & Kings -------in Rs.Cr.--------
Debt Equity Ratio 3.11 0.70 0.62

Interest Coverage Ratio: This ratio is used to determine how easily a company can pay interest
on outstanding debt.
Formula:
Analysis: The lower the ratio, the more the company is burdened by debt expenses. The ratio is
decreasing year by year. If the company’s ratio is 1.5 or lower, its ability to meet interest
expenses may be questionable.
Cause: Due to less in earnings.
0
2
4
6
8
Interest Coverage Ratio
Interest Coverage Ratio Of Cox & Kings -------in Rs.Cr.-----
Interest Coverage Ratio 1.54 4.31 6.86

ACTIVITY / TURNOVER RATIOS
Inventory Turnover Ratio / Stock Turnover Ratio: It is the ratio of cost of goods sold to
inventory. This ratio indicates how many times inventory is created and sold during the period. It
indicates whether investment in inventory is efficiently used or not.
Formula:
Analysis: In 2011-2012, the ratio is higher than in the year 2010-2011. It shows a good sign of
the management.
Cause: The turnover on the year 2011-2012, is higher than in the year 2010-2011, 2009-2010.
0
10
20
30
40
50
60
Stock Turnover Ratio
Stock Turnover Ratio Of Cox & Kings -------in Rs.Cr.--------
Stock Turnover Ratio 48.55 32.73 31.58

Debtor’s Turnover Ratio: The ratio reveals the number of days the debtors enjoyed as credit
period allowed to them. It shows how receivables or debtors are converted into cash. It is a test
of the liquidity of the debtors of a firm. This ratio is also analyzed to study the debt collection
policy of an enterprise. A large credit period indicates a very bad collection policy.
Formula:
Analysis: Allowing the customers extended time to pay is essentially providing them free credit.
If customers fail to pay or take their time in paying, it could cost the business in bad debt
expenses or, if the inventory to create the goods or the labor for the services was financed, in
high interest expense - all of which hurts business profits. To improve this ratio, collect from
customers as soon as possible.
1.35
1.4
1.45
1.5
1.55
Debtor's Turnover Ratio
Debtor’s Turnover Ratio Of Cox & Kings -----in Rs.Cr.----
Debtor’s Turnover Ratio 1.49 1.40 1.50

Total Assets Turnover Ratio: This ratio is used for comparing Sales to the total assets of the
business. It also reveals the extent of utilization of the total assets in the business. The ratio
proves the efficiency of the management operational activities. The higher the ratio the larger is
the rate of return on capital invested in total assets.
Formula:
Total Asset Turnover = Sales/Total Assets
Analysis: During 2009-2010 and 2010-2011 the ratio proves the inefficiency of the management
in operational activities. The rate of return on capital investment is not sufficient of the company
in the year 2011-2012.
Cause: Comparing 2009-2010 and 2010-2011, we see that Total Assets (especially Fixed Assets)
is proportionately higher in the year 2009-2010.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Total Asset Turnover Ratio
Total Asset Turnover Ratio Of Cox & Kings -----in Rs.Cr.----
Total Asset Turnover Ratio 0.38 0.27 0.37

Fixed Asset Turnover Ratio: This ratio reveals the relationship between the Fixed Assets and
Proprietors’ fund of concern. It also shows whether the financial planning of a concern is sound
or not or how much of the fixed assets are converted by the Proprietors’ fund. The ratio is
applicable for the purpose of testing the solvency position and efficiency of the management
Formula:
Where,
Fixed Assets = Gross Block – Depreciation + Net Block + Capital Work In Progress
Proprietor’s Fund = Equity Share Capital + Preference Share Capital + Reserves and Surplus
Analysis: There has been a decrease in the value of the ratio in 2011-2012 as compared to 2010-
2011 & 2009-2010. Since the ratio is declining over time, the company has either over invested
in fixed assets or it needs to issue new products to revive its sales.
Cause: Since the efficiency of the firm to generate revenues from investments in fixed assets has
gone down.
0
1
2
3
4
Fixed Assets Ratio
Fixed Assets Ratio Of Cox & Kings -------in Rs.Cr.--------
Fixed Assets Ratio 0.34 3.16 3.51

PROFITABILITY RATIOS
Gross Profit Ratio: The gross profit ratio shows the proportion of profits generated by the sale
of products or services, before selling and administrative expenses. In essence, it reveals the
ability of a business to create sellable products in a cost effective manner.
Formula:
Analysis: The value of the ratio has been decreased for the financial year 2011-2012 compared to
its value in 2009-2010 and 2010-2011 indicating that it has made less profit.
Cause: Decrease in the ratio may be:
Purchase of raw materials at unfavorable rates
Over investment or inefficient use of resources
Excessive competition, compelling to sell at reduced prices
0
10
20
30
40
50
Gross Profit Ratio
Gross Profit Ratio Of Cox & Kings -------in Rs.Cr.--------
Gross Profit Ratio (%) 14.10 42.46 43.02

Net Profit Ratio: The ratio indicates the ratio of the net profit to net sales. The amount left out
of the proprietors’ fund may be known from the ratio. The ratio is very helpful for measuring the
profitability of the business. It is also helpful to measure the operational efficiency of the
management of the concern. The more the ratio, greater is the profitability of the business.
Formula:
Analysis: The ratio of 2011-2012 is less than 20009-2010 and 2010-2012. This means that the
profit position has decreased from the previous years.
Cause: This has happened due to more than proportionate increase in :
Material Price and
Direct expenditure
0
10
20
30
40
Net Profit Ratio
Net Profit Ratio Of Cox & Kings -------in Rs.Cr.--------
Net Profit Ratio (%) 4.14 24.84 32.43

Operating Profit Ratio: This ratio indicates the profitability of current operations. This ratio
does not take into account the company’s capital and tax structure.
Formula:
Analysis: Operating Profit Ratio is supposed to be below 70%. Here the ratio is well below 70%.
This is favorable for the company as it provides larger margin of profit to meet operation
expenses.
8.5
9
9.5
10
10.5
11
Operating Profit Ratio
Operating Profit Ratio Of Cox & Kings -------in Rs.Cr.--------
Operating Profit Ratio (%) 9.43 10.67 10.23

Return on Capital Employed: Return on Capital Employed is a measure of the returns that a
business is achieving from that capital employed, usually expressed in percentage terms. Capital
employed equals a company’s equity plus Non- current liabilities (or Total Assets – Current
Liabilities)
Formula:
Analysis: If the company’s ratio is 20% or more is considered very well. Since the company has
lower value of ROCE which indicates lower profitability.
0
5
10
15
Return on Capital Employed
Return on Capital Employed Of Cox & Kings -----in Rs.Cr.----
Return on Capital Employed (%) 5.80 11.44 14.10

Earnings per Share: The term Earnings per Share represents the portion of the company’s
earnings, net of taxes and preferred stock dividends, that is allocated to each share of common
stock.
Formula:
Analysis: The Earning per Share is the indicator of what the shareholders are earning. Here the
EPS has dropped from 11.24 in 2011 to 5.69 in 2012. A decrease in the EPS value in the year
2011-2012, over the previous year indicates a low earning value for the share holders.
Cause: Due to decrease in total earnings of the company EPS has been decreased
0
5
10
15
Earnings per Share
Earnings per Share Of Cox & Kings --------in Rs.Cr.--------
Earnings per Share 5.69 11.24 7.96

Dividend Payout Ratio: The dividend payout ratio is the amount of dividends paid to
stockholders relative to the amount of total net income of a company. The amount that is not paid
out in dividends to stockholders is held by the company for growth. The amount that is kept by
the company is called retained earnings.
Formula:
Analysis: The Dividend payout value jumped by a margin of around 10% in 2011-2012, as
compared to its previous year value.
Cause: Dividend Payout value has increased due to adoption of liberal dividend policy.
0
5
10
15
20
25
Dividend Payout Ratio
Dividend Payout Ratio Of Cox & Kings --------in Rs.Cr.--------
Dividend Payout Ratio 20.41 10.34 14.65

CONCLUSION
The current short term solvency ratios have fallen drastically the long term solvency ratios are
still well in place. The company is struggling to create a net profit. Though Cox & Kings has a
good operating profit scenario the company seems to fail somehow to produce substantial net
and gross profits.
The company needs to think out their options to take an early control of the degrading situation.
At present the short term solvency seems to be a problem. If the situation is not handled well
then it will not take time to effect on the long term existence of the company.
The Earning per Share of the company seems to have drastically fallen in the year 2011-2012
compared to the year 2010-2011. This can be due to the knowledge of the shareholders about the
depleting short term solvency capacity of the company.
The company needs to focus on improving sales and generating more revenue. They should
improve their current assets situation and reach a level where they can cover their current
liabilities with their current assets.
This can not only improve their short term solvency problems but also create a better conception
in the shareholders’ mind about the company; resulting to increase in the share prices and growth
in the EPS.

BIBLIOGRAPHY
http://www.coxandkings.com
http://www.moneycontrol.com
http://accountingexplained.com
http://www.investopedia.com

Cox & Kings Financial Ratios

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