Kwality Limited Annual Reports, Balance Sheet and Financials

Kwality Limited Balance Sheet (Rs in Lakhs)

Kwality Limited Profit & Loss Statement (Rs in Lakhs)

 Kwality Limited 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 cash flow from operating activities begins with the net profit before tax, which has increased from Rs. 2,557.24 lakhs in 2023 to Rs. 3,109.89 lakhs in 2024. This growth indicates that the company has performed better in terms of profitability in FY 2023-2024. However, to calculate the actual cash generated from operations, the profit before tax is adjusted for non-cash expenses and changes in working capital.

Adjustments for non-cash items:

Depreciation has increased significantly from Rs. 1,495.84 lakhs in 2023 to Rs. 1,955.88 lakhs in 2024. This non-cash expense is added back to the cash flow as it does not impact actual cash outflows.

Other non-cash items increased substantially from Rs. 14.96 lakhs in 2023 to Rs. 699.78 lakhs in 2024, reflecting adjustments for provisions or other items that affect profitability but not cash flow.

Interest & Finance charges of Rs. 1,019.53 lakhs in 2024 (up from Rs. 602.04 lakhs in 2023) are also added back as they represent non-cash charges for the period.

Profit/Loss on sale of assets and Interest on investments are small adjustments, with a minimal impact on the cash flow.

After adjusting for these non-cash items, the operating profit before working capital changes increases to Rs. 6,771.90 lakhs in 2024, compared to Rs. 4,652.35 lakhs in 2023, reflecting an overall improvement in operational efficiency.

Changes in working capital: Working capital changes reflect the movement in short-term assets and liabilities that affect cash flow.

The decrease in trade receivables of Rs. 4,269.14 lakhs in 2024 (compared to a decrease of Rs. 256.39 lakhs in 2023) indicates that the company collected more outstanding payments, resulting in an inflow of cash.

The decrease in inventories of Rs. 273.49 lakhs in 2024 (compared to an increase of Rs. 3,295.44 lakhs in 2023) suggests the company reduced its inventory levels, leading to additional cash inflow.

Adjustments for bank balances and other current assets show inflows of Rs. 60.80 lakhs and Rs. 735.06 lakhs respectively, indicating changes in short-term financial positions.

The increase in trade payables of Rs. 912.47 lakhs in 2024 reflects delayed payments to suppliers, resulting in an inflow of cash.

The increase in financial current liabilities of Rs. 1,550.77 lakhs in 2024 and other liabilities & provisions shows changes in obligations and provisions that have an impact on cash flows.

After adjusting for working capital changes, the company generated Rs. 4,428.28 lakhs in cash from operations in 2024, which is slightly lower than the Rs. 4,753.76 lakhs generated in 2023. The reduction is due to the large decrease in inventories and some other working capital changes. After accounting for income taxes paid (Rs. 130.00 lakhs in 2024 compared to Rs. 615.59 lakhs in 2023), the net cash generated from operating activities was Rs. 4,298.28 lakhs in 2024, slightly higher than Rs. 4,138.17 lakhs in 2023, indicating solid operational performance.

Cash Flow from Investing Activities:

The cash flow from investing activities reflects the company’s investments in long-term assets and other financial instruments.

The purchase of property, plant, and equipment (PPE) was Rs. 2,984.11 lakhs in 2024, down from Rs. 4,767.32 lakhs in 2023. This indicates a reduction in capital expenditures in the current year, possibly due to a slower pace of expansion or investment.

The proceeds from the disposal of property, plant, and equipment were Rs. 411.17 lakhs in 2024, which was higher than Rs. 186.28 lakhs in 2023, reflecting cash inflows from asset disposals.

The interest on fixed deposits (FDR) remained relatively stable at Rs. 12.95 lakhs in 2024, compared to Rs. 12.30 lakhs in 2023.

There was a decrease in other long-term assets, which amounted to Rs. -79.68 lakhs in 2024, compared to Rs. -275.33 lakhs in 2023.

After accounting for these factors, the company spent a net amount of Rs. -2,639.66 lakhs in investing activities in 2024, compared to a higher outflow of Rs. -4,844.08 lakhs in 2023. This reduction in cash outflows suggests that the company may have been more conservative in its investment activities during FY 2023-2024.

Cash Flow from Financing Activities:

The cash flow from financing activities reflects the inflows and outflows related to the company’s financing structure, including borrowings and repayments.

The proceeds from borrowings were Rs. 405.64 lakhs in 2024, compared to Rs. 1,154.84 lakhs in 2023, showing a decline in new borrowings.

The company made repayments of borrowings amounting to Rs. -1,125.89 lakhs in 2024, significantly higher than Rs. -453.40 lakhs in 2023, indicating that it repaid more debt in 2024.

The interest paid increased to Rs. -1,019.53 lakhs in 2024 from Rs. -602.04 lakhs in 2023, reflecting higher interest expenses, which reduced cash flow.

The net cash flow from financing activities was negative, at Rs. -1,739.78 lakhs in 2024, compared to a positive Rs. 99.41 lakhs in 2023. This reversal indicates that the company’s financing activities were not as favorable in 2024, primarily due to higher debt repayments and increased interest costs.

Net Cash Flow and Cash Position:

The net increase in cash and cash equivalents was negative, amounting to Rs. -81.16 lakhs in 2024, compared to a larger decrease of Rs. -606.50 lakhs in 2023. This indicates that the company had a smaller cash outflow in 2024 compared to the previous year, despite negative cash flows from investing and financing activities.

 Financial Ratios of Kwality Limited

Here is a summary of the financial and operational metrics for Kwality Limited for the year 2024 and 2023:

The current ratio measures a company 's ability to pay off its short-term liabilities with its short-term assets. A ratio of 1.6 in 2024, compared to 1.65 in 2023, indicates that the company still maintains more than enough current assets to cover its current liabilities. The slight decrease from 1.65 to 1.6 suggests a minor reduction in the company 's short-term liquidity

The debt equity ratio shows the proportion of debt used in relation to shareholders ' equity, indicating the company 's financial leverage. A ratio of 0.44 in 2024 compared to 0.45 in 2023 reflects a slight decrease in the company 's reliance on debt to finance its operations.

The debt service coverage ratio (DSCR) measures the company 's ability to meet its debt obligations from its operating income. In 2024, the DSCR is 2.8, slightly lower than 2.98 in 2023, showing a small decline in the company’s ability to cover its debt service.

 Return on equity (ROE) is a measure of profitability that compares net income to shareholders ' equity, indicating how effectively the company generates profit from its equity. In 2024, the ROE is 10.61%, an increase from 9.69% in 2023. This improvement suggests that the company has become more efficient at generating profits for its shareholders.

The inventory turnover ratio measures how efficiently a company manages its inventory by calculating how often it is sold and replaced over a period. In 2024, the inventory turnover ratio is 3.73, up from 3.59 in 2023.

The trade receivables turnover ratio measures how efficiently a company collects its receivables. In 2024, the ratio is 3.3, a slight decline from 3.57 in 2023. This reduction suggests that the company is taking a bit longer to collect payments from its customers compared to the previous year.

The trade payables turnover ratio measures how quickly a company pays off its suppliers. In 2024, the ratio is 3.65, up from 3.16 in 2023. This improvement means that the company is taking less time to pay its suppliers, which could be viewed positively in terms of maintaining good supplier relationships.

The working capital turnover ratio reflects how efficiently a company uses its working capital to generate sales. In 2024, the ratio stands at 3.38, up from 3.09 in 2023.

The net profit ratio measures the percentage of revenue that translates into profit, showing how much of every unit of sales is converted into net profit. In 2024, the net profit ratio is 7.69%, which is marginally higher than the 7.68% in 2023.

Return on capital employed (ROCE) is a measure of a company’s profitability and the efficiency with which its capital is employed. In 2024, the ROCE is 15.15%, a decrease from 21.26% in 2023.

The return on investments (ROI) measures the return a company earns on its investments, and it mirrors the ROCE at 15.15% in 2024, down from 21.26% in 2023. This reduction suggests that the company’s investments have yielded a lower return in the current period, possibly due to market conditions or less effective use of capital.