Eaton Fluid Power Annual Reports, Balance Sheet and Financials

Danfoss Systems Limited Balance Sheet (Rs in Millions)

Danfoss Systems Limited Profit & Loss Statement (Rs in Millions)

 Danfoss Systems Limited Cash Flow Statement (Rs in Millions)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities

Profit Before Tax: The company generated a profit of ₹290.75 million in FY 2024 compared to ₹169.26 million in FY 2023, showcasing improved profitability.

Adjustments:

Depreciation and amortization increased to ₹106.7 million, reflecting the cost of using fixed assets.

A write-back of ₹9.54 million in doubtful debts improved cash flows, while no such reversal occurred in FY 2023.

Finance costs decreased to ₹56.33 million in FY 2024 from ₹76.11 million in FY 2023, indicating reduced borrowing costs or better debt management.

Interest income of ₹0.62 million slightly offset operating cash flows.

Working Capital Changes:

A significant reduction in trade receivables (₹130.77 million) improved cash inflows, suggesting better collections.

Inventory levels decreased by ₹49.45 million, freeing up cash.

Other assets contributed negatively with a cash outflow of ₹77.59 million, indicating higher prepayments or advances.

Trade payables increased by ₹62.49 million, improving cash availability.

Net Operating Cash Flow: Post-tax payments of ₹73.08 million, net cash generated from operating activities was ₹460.58 million, slightly lower than the ₹478.22 million in FY 2023.

Cash Flow from Investing Activities

Capital Expenditure: Significant investment of ₹90.89 million was made in property, plant, and equipment, which reduced cash reserves.

Proceeds from Asset Sales: The company earned ₹3.43 million from selling fixed assets, a slight increase compared to ₹0.25 million in FY 2023.

Interest Income: Interest of ₹0.62 million provided a minor cash inflow.

Net Cash Flow from Investing: This segment reflected a net cash outflow of ₹86.84 million, an improvement compared to the ₹150.85 million outflow in FY 2023, due to reduced capital spending.

Cash Flow from Financing Activities

Lease Liabilities: The company paid ₹5.97 million towards lease liabilities, a slight increase from ₹2.84 million in FY 2023.

Interest Payments: Interest paid reduced to ₹49.69 million from ₹79.24 million, consistent with the reduced finance costs.

Borrowings:

Proceeds of ₹330 million were raised from current borrowings, boosting cash flow.

₹622.5 million was repaid on long-term borrowings to related parties, representing a significant outflow.

Net Cash Flow from Financing: A net outflow of ₹373.71 million occurred, slightly higher than ₹367.69 million in FY 2023, driven by high debt repayments.

Net Increase/Decrease in Cash

After combining all activities, the net change in cash was marginally positive at ₹0.03 million for FY 2024, a sharp improvement from the negative ₹40.32 million in FY 2023.

Cash at Year-End: Cash and cash equivalents remained stable at ₹3.53 million as of March 31, 2024.

Financial Ratios of Danfoss Systems Limited

 Here is a summary of the financial and operational metrics for Danfoss Systems Limited for the years 2024 and 2023:

Current Ratio (1.12 in 2024 vs. 1.29 in 2023)

The current ratio has decreased, indicating that the company 's ability to cover its short-term liabilities with its short-term assets has slightly weakened. A ratio of 1.12 still suggests sufficient coverage, but the drop indicates tighter liquidity management.

Debt-Equity Ratio (0.32 in 2024 vs. 0.79 in 2023)

The debt-equity ratio has significantly improved, reflecting a substantial reduction in leverage. A lower ratio indicates reduced reliance on debt, enhancing financial stability and creditworthiness.

Debt Service Coverage Ratio (0.45 in 2024 vs. 0.64 in 2023)

The decline in the debt service coverage ratio suggests that the company’s ability to cover its debt obligations with its operating income has weakened, potentially due to higher debt repayments or lower cash flows.

Return on Equity (22.45% in 2024 vs. 13.90% in 2023)

The return on equity has increased significantly, reflecting higher returns for shareholders in 2024. This improvement aligns with the company’s higher net profit and reduced reliance on debt.

Inventory Turnover Ratio (4.6 in 2024 vs. 4 in 2023)

An improvement in the inventory turnover ratio suggests better inventory management in 2024. This reflects faster movement of inventory, leading to better cash flow and reduced holding costs.

Trade Receivables Turnover Ratio (5.38 in 2024 vs. 4.61 in 2023)

The increase in the trade receivables turnover ratio indicates better credit and collection practices. Faster collection of receivables contributes positively to cash flow and reduces credit risk.

Trade Payables Turnover Ratio (3.71 in 2024 vs. 3.55 in 2023)

The slight increase in the trade payables turnover ratio suggests that the company is settling its obligations to suppliers faster. This may reflect good supplier relationships but could limit opportunities for longer credit terms.

Net Capital Turnover Ratio (25.81 in 2024 vs. 11.09 in 2023)

A sharp increase in the net capital turnover ratio indicates significant improvement in how efficiently the company is using its working capital to generate revenue.

Net Profit Ratio (4.18% in 2024 vs. 2.30% in 2023)

The net profit margin nearly doubled in 2024, reflecting better cost management and increased profitability, likely due to higher operational efficiency and reduced financing costs.

Return on Capital Employed (24.93% in 2024 vs. 17% in 2023)

The increase in the return on capital employed indicates improved efficiency in using capital to generate earnings, reflecting the company’s strong operational performance in 2024.

Dividend History

Danfoss Systems Limited Recent Financial Performance

Dividend per Share: The specific dividend per share figure for 2024 and 2023 is not provided. Dividend per share represents the portion of a company 's earnings that is distributed to shareholders in the form of dividends. A higher dividend per share may indicate that the company is sharing more of its profits with shareholders.

Retained Earnings: Retained earnings for 2024 amounted to Rs 884.05 Millions, while in 2023, they were Rs. 640.37 Millions. Retained earnings represent the portion of a company 's profits that is reinvested in the business rather than distributed as dividends. An increase in retained earnings suggests that the company has retained more of its profits for reinvestment or future growth.

To provide a more comprehensive analysis, it would be necessary to consider additional financial metrics such as revenue, net profit, assets, liabilities, and cash flows. Additionally, an analysis of trends over multiple years and a comparison to industry benchmarks and competitors would help in assessing the company 's financial health and performance