DFM Foods Annual Reports & Financials

DFM Foods Limited Balance Sheet (Rs in Lakhs)

DFM Foods Limited Profit & Loss Statement (Rs in Lakhs)

 DFM Foods Limited Consolidated Cash Flow Statement (Rs in Lakhs)

Here is a summary of the Cash Flow Statement for the years 2023 and 2022:

Cash Flow from Operating Activities

Net Profit/Loss after Tax: The company reported a net loss after tax of ₹6,260 lakhs in 2023 and ₹2,476 lakhs in 2022. Despite operating losses, there were several non-cash adjustments that impacted cash flow.

Adjustments: Major adjustments included depreciation and amortization expenses of ₹1,411 lakhs in 2023, consistent with ₹1,439 lakhs in 2022, and finance costs of ₹937 lakhs (up from ₹889 lakhs in 2022), which were added back to calculate operating cash flow.

Additionally, provisions for doubtful debts, slow-moving inventory, and employee stock option expenses (ESOP) increased operational cash flows by adjusting non-cash expenses.

The statement also accounts for gains and losses from disposals and revaluation of assets, which do not directly impact cash but adjust the profit figure for cash flow calculation.

Working Capital Adjustments: Changes in working capital include fluctuations in receivables, payables, and inventories.

Trade payables increased by ₹719 lakhs in 2023, generating additional cash. However, increases in inventories and other current assets resulted in cash outflows.

Net Cash Flow from Operating Activities: After accounting for these adjustments and taxes paid, the company reported a net cash outflow from operations of ₹3,565 lakhs in 2023, contrasting with an inflow of ₹455 lakhs in 2022. The increased cash outflow in 2023 was largely due to higher working capital requirements and sustained operating losses.

Cash Flow from Investing Activities

Capital Expenditures: The company made significant investments in property, plant, and equipment, with capital expenditures of ₹717 lakhs in 2023, lower than the ₹2,532 lakhs spent in 2022. This indicates a reduction in capital-intensive projects compared to the previous year.

Proceeds from Investments and Asset Sales: The company generated cash from the sale of investments (₹1,096 lakhs) and assets held for sale (₹321 lakhs) in 2023, which partially offset capital expenditures. Bank deposits maturing provided a significant inflow of ₹5,076 lakhs in 2023.

Net Cash Flow from Investing Activities: Overall, the company recorded a net cash inflow of ₹5,869 lakhs from investing activities in 2023, a significant improvement from a minor outflow of ₹69 lakhs in 2022. This positive cash flow was primarily due to the maturity of bank deposits and asset sales, which offset capital investments.

Cash Flow from Financing Activities

Debt and Lease Payments: The company repaid non-current borrowings amounting to ₹1,133 lakhs in 2023, up from ₹743 lakhs in 2022. Lease liabilities were also repaid, reflecting a consistent outflow for both years.

Dividend Payments and Finance Costs: Dividend payments decreased drastically to ₹8 lakhs in 2023, down from ₹506 lakhs in 2022. However, finance costs increased, adding to the cash outflow.

Net Cash Flow from Financing Activities: The financing activities resulted in a net outflow of ₹2,505 lakhs in 2023, compared to an inflow of ₹353 lakhs in 2022. The outflow in 2023 is attributed to higher debt repayments and lease obligations, with reduced reliance on new borrowings or financing.

Net Change in Cash and Cash Equivalents

Overall Cash Position: The net cash decrease during 2023 was ₹201 lakhs, resulting in a year-end cash balance of ₹175 lakhs, down from ₹376 lakhs in 2022.

Cash Balance at Start and End of Period: Starting at ₹376 lakhs in 2023, cash and cash equivalents decreased to ₹175 lakhs by year-end, reflecting the cumulative impact of cash flows from operating, investing, and financing activities.

Financial Ratios of DFM Foods Limited

Here is a summary of the financial and operational metrics for DFM Foods Limited for the year 2023 and 2022:

Current Ratio

2023: 0.54

2022: 0.97

The current ratio, which measures a company 's ability to cover its short-term liabilities with short-term assets, has decreased significantly from 0.97 to 0.54. A ratio below 1 indicates that the company may struggle to meet its short-term obligations, suggesting liquidity concerns.

Debt-to-Equity Ratio

2023: 0.82

2022: 0.6

This ratio measures the company’s leverage by comparing total debt to shareholders’ equity. The increase from 0.6 to 0.82 shows a higher reliance on debt financing in 2023. While a moderate increase in debt can leverage growth, excessive reliance on debt can heighten financial risk, especially if earnings are volatile or declining.

Debt Service Coverage Ratio (DSCR)

2023: -1.72

2022: -0.08

A negative DSCR indicates that operating income is insufficient to cover debt obligations, showing a weak position in terms of debt repayment capacity. The significant decline in DSCR in 2023 further highlights financial distress, suggesting the company might face challenges in meeting debt service requirements.

Return on Equity (ROE)

2023: -50.48%

2022: -14.97%

ROE measures the profitability generated on shareholders’ equity. The negative and worsening ROE suggests the company has incurred losses, which is eroding shareholder value. The steep decline indicates significant challenges in generating profit from equity investments.

Inventory Turnover Ratio

2023: 10.36

2022: 11.92

This ratio shows how efficiently the company is managing its inventory. A decline from 11.92 to 10.36 indicates slightly slower inventory turnover, suggesting either a decrease in sales or potential inefficiencies in inventory management.

Trade Receivables Turnover Ratio

2023: 103.51

2022: 105.31

This ratio is relatively stable, showing that the company efficiently collects its receivables. The minor decline is not significant but could reflect slightly slower collection of outstanding receivables.

Trade Payables Turnover Ratio

2023: 6.55

2022: 7.52

A decline in this ratio indicates that the company is taking longer to pay its suppliers. While extending payment terms can help preserve cash, it may also indicate cash flow challenges or strained supplier relationships.

Net Capital Turnover Ratio

2023: -8.66

2022: -123.49

This ratio measures revenue generation relative to working capital. The negative value suggests a deficiency in working capital and indicates that the company may be generating negative revenue or operating at a loss. While the improvement from -123.49 to -8.66 might suggest some mitigation, the persistently negative ratio remains concerning.

Net Profit Ratio

2023: -10.68%

2022: -4.47%

The negative net profit ratio shows that the company incurred losses in both years. The larger negative value in 2023 indicates worsening profitability, reflecting higher expenses relative to revenues or declining sales.

Return on Capital Employed (ROCE)

2023: -29.23%

2022: -9.50%

ROCE assesses the efficiency of capital utilization in generating profit. The negative and declining ROCE further confirms that the company is not earning sufficient returns on its invested capital, indicating inefficiency in resource utilization or insufficient operating income.

Return on Investment (ROI)

2023: -1.83%

2022: 5.50%

ROI indicates the profitability of investments made. The shift from positive in 2022 to negative in 2023 suggests that the company 's investments are now yielding losses rather than returns, further reflecting operational or financial inefficiencies.