Kirti Investments Limited Annual Report, Balance Sheet and Financials

Kirti Investments Balance Sheet (Rs in Lakhs)

Kirti Investments Profit & Loss Statement (Rs in Lakhs)

 Kirti Investments Consolidated Cash Flow Statement (Rs in Lakhs)

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

Cash Flow from Operating Activities:

The company’s profit before tax for FY 2024 stands at Rs. 484.09 Lakhs, a substantial improvement from the negative Rs. 811.78 Lakhs in FY 2023. This is a positive sign, indicating a recovery from a loss-making position to profitability. However, several non-cash items need to be adjusted to calculate the actual cash generated from operations.

Dividend received (-0.91 Lakhs) and Interest income (-20.66 Lakhs) have a negative impact on cash flow because they represent income items that do not involve actual cash flow from operating activities.

The fair valuation of investments has also led to a negative adjustment of Rs. 4.91 Lakhs in FY 2024 and Rs. 2.87 Lakhs in FY 2023, indicating that market fluctuations impacted the value of investments, though these are non-cash adjustments.

A significant adjustment in FY 2023 is the provision for impairment of Rs. 962.50 Lakhs, which inflated the operating profit but does not impact cash flow.

After adjusting for these items, the Operating Profit before Working Capital Changes stands at Rs. 457.61 Lakhs for FY 2024, a notable improvement from Rs. 144.70 Lakhs in FY 2023.

Next, the working capital changes:

Inventories increased by Rs. 454.27 Lakhs in FY 2024, implying a cash outflow as the company stocked up on inventory.

Loans and advances decreased by Rs. 74.47 Lakhs, representing a cash inflow, as the company likely recovered some loans.

There was a slight increase in sundry debtors by Rs. 5.47 Lakhs, indicating a small rise in receivables.

The trade payables increased by Rs. 0.60 Lakhs, indicating a modest cash inflow from deferring payments to suppliers.

The overall cash generated from operations in FY 2024 is Rs. -71.68 Lakhs, a significant decline from the positive cash flow of Rs. 66.97 Lakhs in FY 2023. This reflects a strained operating environment for the company, despite an improved profit position.

After accounting for direct taxes (Rs. 3.15 Lakhs in FY 2024), the Net Cash Flow from Operating Activities is negative at Rs. -74.82 Lakhs in FY 2024, compared to a positive Rs. 66.80 Lakhs in FY 2023. This suggests that, despite profitability, the company faced working capital and other challenges that resulted in a cash outflow.

Cash Flow from Investing Activities:

In FY 2024, the purchase/sale of investments shows a cash outflow of Rs. 10.00 Lakhs, which represents an investment in assets. However, the company received dividends (Rs. 0.91 Lakhs) and earned interest income (Rs. 20.66 Lakhs), contributing positively to cash flow.

Overall, the Net Cash Flow from Investing Activities for FY 2024 is Rs. 11.57 Lakhs, a notable improvement from Rs. 3.16 Lakhs in FY 2023, suggesting that investing activities were more favorable in the current year.

Cash and Cash Equivalents:

The net decrease in cash and cash equivalents for FY 2024 is Rs. -63.25 Lakhs, compared to an increase of Rs. 69.96 Lakhs in FY 2023. This reflects the negative cash flow from operations despite the positive cash flow from investing activities. As a result, the cash and cash equivalents at the end of FY 2024 is Rs. 39.56 Lakhs, a significant drop from Rs. 102.81 Lakhs at the end of FY 2023.

Financial Ratios of Kirti Investments

Here is a summary of the financial and operational metrics for Kirti Investments for the year 2024 and 2023:

Current Ratio:

The current ratio measures a company 's ability to cover its short-term liabilities with its short-term assets (current assets/current liabilities). In 2024, the current ratio is a high 251.26, which indicates that the company has more than enough current assets to cover its current liabilities. This suggests strong liquidity, meaning the company is in a good position to meet its short-term obligations. In comparison, the current ratio for 2023 was 183.13, which, while still strong, shows a slight improvement in liquidity during 2024. A high current ratio is generally viewed as positive, but it could also indicate that the company is holding excessive amounts of cash or inventory that are not being efficiently utilized.

Return on Equity (ROE):

The return on equity (ROE) ratio reflects a company’s ability to generate profit from its shareholders ' equity. In 2024, the ROE is 43.84%, a strong performance showing that the company generated substantial profits for its equity investors. In contrast, the ROE for 2023 was -64.65%, indicating that the company experienced significant losses relative to its equity base. This dramatic improvement in ROE suggests a turnaround for the company in terms of profitability and is an excellent indicator for investors of the company’s ability to create value from shareholders ' investments.

Trade Receivables Turnover Ratio:

The trade receivables turnover ratio measures how efficiently a company collects its receivables (credit sales). The ratio for 2024 is not provided, but for 2023, it was 8.78, which means that, on average, the company collected its receivables 8.78 times during the year. A higher turnover ratio typically indicates that the company is effectively managing its receivables, collecting payments faster, and maintaining good customer credit management practices. The missing value for 2024 could suggest that either no sales on credit occurred or data for 2024 is not yet available.

Net Capital Turnover Ratio:

The net capital turnover ratio measures how efficiently a company is using its capital to generate revenue, calculated as revenue divided by average net capital (shareholders’ equity + long-term debt). In 2024, this ratio is 0.02, which is lower than the 0.03 ratio in 2023. This suggests that the company is using its capital less efficiently in 2024 compared to the previous year. A ratio of 0.02 means that for every unit of capital, the company is generating only 2% of revenue, which could imply underutilization of capital or a reduction in sales relative to invested capital. Lower ratios are generally concerning, as they suggest inefficiency in converting capital into revenue.

Net Profit Ratio:

The net profit ratio indicates the percentage of revenue that translates into profit after all expenses have been deducted. In 2024, the ratio is an extraordinarily high 1988.21%, which is an impressive turnaround from the -3383.12% in 2023. The negative figure in 2023 suggests the company had significant losses relative to its sales, but the positive 1988.21% in 2024 indicates that the company has turned a significant profit, and nearly every rupee of revenue is being converted into net profit. This is an outstanding performance, suggesting effective cost control, high revenue growth, or other factors that greatly improved profitability.

Return on Capital Employed (ROCE):

The return on capital employed (ROCE) ratio reflects the profitability and efficiency of a company in utilizing its capital to generate earnings before interest and tax (EBIT). In 2024, the ROCE is 36.48%, a very healthy figure, indicating that the company is efficiently using its capital to generate returns. In contrast, the ROCE for 2023 was -95.51%, signaling poor capital utilization and heavy losses. The significant improvement in ROCE from 2023 to 2024 shows that the company has made significant strides in improving profitability and managing its capital efficiently.